DRIP Investing

What is drip investing?

DRIP stands for direct reinvestment plan. DRIPs automatically reinvest any dividends that you've earned. Reinvesting dividends is convenient, wise, and automatic. DRIPs are usually applied to direct investment plans, mutual funds, and index funds.

DRIPs force you to invest well by regularly investing and by automatically reinvesting what you've earned. Its even better if its in an index fund.

I currently have all but almost 100% of my investments on DRIPs in index funds and it makes my investing life simple, easy, and worry free.

How do I enroll in a direct reinvestment plan?

This is very much like direct stock plans if you're looking to enroll in a single company's drip plan - search the internet or call them.

For example, lets say I want to enroll in a DRIP with Walmart. I did a google search for "walmart dividend reinvestment plan." It took me to the same link (new window) as above and found 'For information, please contact Computershare by calling (800) 438-6278 and select option 3 on the automated system or go directly to Computershare’s Investment Plans page and select "Buy Now." You may receive the plan documentation by mail at your home or make an online investment.'

My current way of utilizing the DRIP involves owning index funds and setting them to automatically reinvest any dividends. I use Vanguard and this was done with an easy change to a setting.

return from drip investing to stock market for beginners

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