DRIP Investing is the best kind for most people. It is simply investing in quality companies that have consistently given dividends AND increased their dividends over the years. The best way to do it for an individual to save broker’s fees is by joining a DRIP group. Okay now you are really curious. D R I P = Dividend Reinvestment Plans – There is a list of companies in Canada and the U.S. who give dividends consistently. The best ones also have SPP. Oh! Oh! More acronyms… S P P = Share Purchase Plan.
What do they mean? DRIP – DRIP companies, after you are enrolled, let you use your dividends to automatically purchase more shares. That is what the DRIP paperwork is all about. SPP means you can buy additional shares or fractions of shares by sending in a cheque for the purchase desired.
Briefly you join a share club or forum where members offer shares of these DRIP & SPP plans to get you started. Once you have your first share for which you typically pay the price on a particular agreed-upon day plus $10 for the member’s expenses to do the paperwork and driving necessary to transfer one of his stocks of a particular company and ONE PAPER SHARE. After you have the paper share you can find out in the the group’s archives where you need to request the DRIP & SPP forms from. Usually you just download them, fill them in and send them to the requested address along with your Stock Certificate Number and possibly a check for some amount you want to start investing in that particular company that you ‘bought’. It does not have to be a large amount. Usually you can start with $25 or more.
Once your paperwork is checked, recorded and filed for the company by their stock handling company, you will be informed of your account number, how to access info online and any other pertinent details including how much stock you own now after the check was used to purchase more shares. The shares do not have to be in whole units. You may own 1.36 shares say of BCE which is Bell Canada Enterprises.
For more information see this link http://www.dripprimer.ca/
- Ottawa Share Club
- Toronto DRP Group
- Winnipeg DRIP Group
- Calgary DRIP Group
- Vancouver DRIP Group
- Thunder Bay – Northwest Ontario DRIP group
- Barrie, Ont. Share Club
Your financial adventure has just begun….