Invest in a Dividend Reinvestment Plan (DRIP)

May 2008

DRIPs are investment plans that allow individuals to buy shares directly from a company and to reinvest dividends from these shares automatically, circumventing broker fees and commissions. While enrolling in and maintaining a dividend reinvestment plan is not free, these plans allow individuals to start investing with little money.

Here's how to get started quickly:

1. Choose a company with a dividend reinvestment plan at Directinvesting.com.

2. Avoid DRIPs that charge setup fees, administrative fees or commissions.

3. DRIPs often require you to be a shareholder to participate. In that case, buy one share through a discount broker, then register the stock in your name.

4. For a fee of up to $50 per company, you can start a DRIP through the Temper Enrollment Service at Directinvesting.com.

ALSO: See our picks for investing in DRIPs for 2007 through 2008.

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