Comments on: To DRIP, or not to DRIP, that is the question…

By: writing2reality

writing2reality — Thu, 06 Nov 2014 14:16:03 +0000

Jon, I don’t think there is anything wrong with combining your new capital with dividends received. When I started my DG portfolio, capital available for allocation was a bit sparse, so it didn’t make sense to collect the dividends before reinvesting them. Now that I will likely be contributing regularly, I will probably reconsider my the direct reinvestment that is currently going on.

Best of luck on your journey!

By: Jon Carpenter

Jon Carpenter — Thu, 06 Nov 2014 13:10:37 +0000

I’ve been going back and forth on this a lot in my head becuase I still have a rather smal portfolio. My current approach is (since I’m making a new purchase of about $1000 a every otehr month, I take whatever dividends came in and add it to that pile of cash for the purchase. So if during that two month period I made $20 in dividends, I now look to buy $1020 worth of a stock. I figure since I was already going to pay a commission, my dividends can get a free ride in on the next purchase, and wil be used to buy a stock at the price of my choosing based on value, instead of a potentialy inflated price.

By: writing2reality

writing2reality — Fri, 25 Jul 2014 17:55:46 +0000

I am getting closer to the point where I will be turning my own DRIPs off as well. I should be in a position shortly to regularly commit additional capital to my DG portfolio, and this should allow me to take advantage of those dividends coming in to supplement the additional capital for purchases.

Thanks for stopping by!

By: Sparky

Sparky — Thu, 24 Apr 2014 09:52:13 +0000

I’ve turned off some of my drips. If the PE is too high and I’m buying partial shares at too high of a price, I’ll have the money placed in my sweep account. I’ll be able to accumulate the extra money tax free, since it’s in my Roth, and make purchases when the cost basis is lower, or I’ll use the money to purchase another drip stock I couldn’t otherwise buy because of the dollar limit on Roth contributions. I’m eventually hoping to save enough $ in a taxable account to build my drip, but that may have to wait until I’m working part-time in retirement in a few years, since I’m focused on paying off my mortgage.

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Average Joe's Saturday Read-Along - The Free Financial Advisor — Sat, 02 Mar 2013 13:22:23 +0000

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By: writing2reality

writing2reality — Wed, 27 Feb 2013 19:21:00 +0000

Thanks for commenting YI! I agree that purchasing directly through a DSPP can be a nice benefit to those who have small, or even large, amounts to invest. As you have said, they are ideal for those who have little to no interest in trading options or futures, and want a low cost means of investment.

By: YI_Blog

YI_Blog — Wed, 27 Feb 2013 19:08:24 +0000

An excellent point to note about DRIPs, some of the best offer Direct Stock Purchase Plans. These allow you to buy stock without the aid of the broker. Most of the fees with them are one-time and only reoccur when a sale is placed on your holdings. Even better, some of them are completely free to invest and make small contributions (Eaton, CSX, The Limited, etc.) until a sale occurs. These can work incredibly well for those intimidated by the overall market and more advanced trading techniques such as those involving options and futures. However, they do work incredibly well with those investments. I have put together some excellent resources for getting started on these on my blog I would invite you to check out.

By: writing2reality

writing2reality — Mon, 25 Feb 2013 18:48:33 +0000

Thanks for commenting Mr. 1500! I completely agree that as of now that is the way to go. Certainly down the road it might be something to reconsider, but I have no plans to change things at this time.

By: Mr. 1500

Mr. 1500 — Mon, 25 Feb 2013 18:27:29 +0000

Like the previous commentor, I’m in it for the long term as well. I’ll leave my DRIPS turned on until I get close to retirement and want the passive income of have a better use for the money.

By: writing2reality

writing2reality — Sat, 23 Feb 2013 04:24:14 +0000

Thanks for commenting BBBI! I totally agree that dividend reinvestment is the way to go. However, it was curious to me to see some people who don’t, which led me to ponder (and write) about the DRIP and the decision to implement one.