The great financial site FMF had an interesting posting about the downside of Dividend ReInvestment Plans (DRIPs). Although there are not many downsides, DRIPs are still a good idea.
And I quote:
Generally, I think they are a good deal if you’re interested in one stock in particular as they decrease costs in acquiring the stock. However, you must be willing to deal with extra paperwork as each DRIP will be its own account (as far as I know) versus being able to hold many stocks in one brokerage account.
I have never seen that with my holdings that have DRiP "turned on." It sounds like a royal pain in the tuchos if that is the case. I'm not sure if this is a regulatory thing in the states. It could also be their trading account owners screwing around. This would drive me crazy as well. It also means that the power of the DRiP gets lost in this type of setup. The DRiP adds more stock and makes future dividends larger. Seems odd.
And this is my 500th Posting too!!!!!
Previous Reflections
- Retiring and enjoying twenty-one years of writing on Saint Patrick's Day.
- Twenty Years of this? Really, hard to believe.
- Nineteen Years Ago, This Started Take a trip down memory lane and reflect on the past 19 years. Join me as I revisit my early works and share valuable lessons learned along the way.
- Reflections on 15 Years My reflections on the past 15 years of writing on this and other blogs. It has been an interesting few years. #Blogging #Writting
- Still Financially Crazy after 13 Years
- Saint Patrick and Many Years of Financial Writing Not only was it Saint Patrick day. It was also the anniversary of me starting this important personal finance thome. (ok, poetic license on that).
- Ten Years and Still Going. After ten years of writing here, what have I learned? Not that much, really, but it has been fun, and that is the main reason.
- Eight Years Later (and a Happy St. Patty’s Too) Celebrate the 8th anniversary of my blog with me. Join me on this journey that started 8 years ago, and discover the evolution of my writing and thoughts.
- Post 500 was in 2007, only 2 years in, that is a lot of writing.
Congrats on 500!!!!
What I meant to say in the post is that (as far as I know) each DRiP has to be set up directly with the company and thus each is its own account. So if you have five DRip stocks, you have five accounts — versus having one brokerage account to hold all five stocks.
Five accounts versus one — one is easier to manage. 😉
Interesting because with my account, I call in and they set up the DRiP and manage that part of things (however, they keep forgetting to add the companies I ask to join, so I have to call a few times).
I like DRiPs for now, call me in 20 years 😉 –C8j