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Boy am I a DRIP

in DRIP, Stock Market


You can waste a lot of water leaving a dripping tap, but if you allow the dividends from your stocks to DRIP, you are building wealth? Wild eh?

What’s a drip (nice picture from flickr eh?), well the i is added in kind of, but it is Dividend Reinvestment Plan, is what the TLA (three letter acronym) means. Typically a stock, or mutual fund (I think) will offer this to their shareholders. You sign up for this and instead of getting your Dividends as cold hard cash, you get it as Stock in the company, and typically the stock purchase has no brokerage fees (which is always nice).

Some investing houses also offer a “virtual drip” where they reinvest the money for you in the stock (without brokerage fee).

Why DRIP Now?

Now I had forgotten about this method of investing, but thanks to the Moneysaver web site, I have remembered and am now about to sign up for DRPs for the bank stocks that I already own.

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