Black Money Business Jobs : Investing Through Drips

Akilah

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Aug 11, 2003
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Scheduling Coordinator for large Health System
Companies offer DRPs as a way for their shareholders to buy stock directly from the company (usually through a transfer agent) in very small to large amounts, and usually on a monthly basis if desired. These plans get their name from the fact that they also reinvest dividends paid, using these dividends to purchase more stock. Thus the name "Dividend Reinvestment Plan." The specifics of whether or not you have to reinvest the dividends depends on the plan.

Advantages of DRPs

You don't need a large amount of money to start. Usually owning one share is all that is required to enroll in a DRP.

DRPs are a cost-effective way for Fools to put stock dividends to better use -- purchasing more shares of the company -- than simply spending the money or having it sit in a money market account. Most DRPs allow dividends to be reinvested at no fee.

Most companies allow investors to purchase additional shares through a Dividend Reinvestment Plan for nominal fees -- or often no fee at all. These stock purchase provisions, sometimes called Stock Purchase Plans (SPPs) or Optional Cash Purchase Plans (OCPs), allow an investor to send in as little as $10 to $50 at a time to purchase additional stock.

About 100 companies have DRPs that allow investors to purchase stock at a discount to the current market price. These discounts can range anywhere from one to ten percent.

DRPs "force" investors to buy stock on a regular basis and hold on to that stock. As a result, investors adopt a long-term horizon and often invest small amounts of money on a regular basis -- money that they usually don't even miss. Nearly 200 companies also offer the option to make periodic DRP investments through automatic debits from bank accounts.

http://www.fool.com/school/drips.htm

http://www.sec.gov/answers/drip.htmhttp://www.equiserve.com/
 
Direct Stock Purchase Plans

panafrica said:
I've never heard of this before, thanks for sharing sister Akilah.

You are most welcome brutha PanAfrica !

The following are some of the lower cost direct stock
purchase initial investment plans
and phone numbers where their investment divisions
can be contacted - keep in mind the initial investment cost is not the
same as the minimum continued investments, which are usually much
lower. For example, Bob Evans' initial stock investment is $100.00 but
the minimum voluntary cash payment is like $50.00 to purchase more
shares or fractions of shares. The payments may be sent via check,
money order, or by automatic monthly fund transfers from your bank
or credit union etc...

Stock (initial invest)..................Phone ..................Symbol

Bob Evans Farms ($100)..............800/272-7675.........BOBE

Boston Properties ($100).............888/485-2389.........BXP

Capitol Auto REIT ($100).............877/208-9533.........CARS

CH Energy Group ($100)..............888/280-3848.........CHG

Dollar General ($50)....................888/266-6785..........DG

Walgreen ($50)..........................888/368-7346.........WAG

TrustCo Bank NY ($25)................518/381-3601.........TRST
 

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