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Savvy investors understand that the miracle of compounding accelerates total return, the longer the time frame, the better. I don’t think there’s a better gift for a graduating grandchild or other loved one than a gift of a portfolio of dividend-paying stocks including enrollment in the company’s dividend reinvestment plan. Assuming that the graduate can fund the portfolio, even with small amounts to start, the portfolio will compound to produce real wealth over the long term. How much wealth? Millions of dollars, as I’ll demonstrate.
Instead of giving a gift of money that the young person is likely to spend frivolously, a gift of a five-stock portfolio held in dividend reinvestment plans, is likely to stay in place and grow over the years. Your total cost to set up such a portfolio, depending on the price of the stock that you select, is somewhere around $500. What’s more, there’s a two-fold advantage to this gift. Not only will it provide a long-term financial benefit to the graduate, it will give him or her a first-hand experience with a logical approach to investing.
By “saving” in the stock of the companies in a portfolio of DRIPs, your young investor has the opportunity to build wealth by participating in the growth of the economy in the most efficient manner possible, and, if you can afford to take this gift one step further, by making additional gifts to fund the portfolio over the four years that the graduate is attending college, the results will be astounding. By the time you are ready to present your college. . .
|MP 63 Industrials (52)||100.00||1159.45||1059.45|
|Dow Jones Industrials||3754.09||18456.35||391.63|
As you begin your journey into investing directly through DRIPs, you'll want to refer to this site for the latest information about the operations of the plans as well as for assistance to help you get started.
We are constantly updating the site with new information, so you may want to make it one of your "favorites."
Search for DRIPs gives you basic information about every company that offers direct investing. Subscribers can screen based on industry, dividend yields, fees, and many other important criteria.
You can read capsule reviews of companies that offer plans. And you can use the investing strategies we've uncovered to maximize the advantages of DRIP investing.
You can use this site to enter orders for DRIP enrollments.
The enrollment service provided here transfers shares in the customer's name (which is a requirement to join a DRIP).
In general, traditional brokers will buy shares for customers and hold them in "street name" (the broker's name).
The results of making regular investments into a diversified group of companies through the company DRIP have proved to be superior over every time period for the past 25 years.
With the ability to diversify and invest periodically (without fees), small individual investors can have a better chance of success than large institutional investors.
We've discovered that, in general, the uncertainty of markets makes it more rewarding to
Time Your Investments ...Not the Market!
sign up to get Moneypaper’s twice-monthly Stock Special-
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