Collecting More Stock on Autopilot with DRIP Stock Investing
Then, DRIP investing may be the tool you need.
Do you want to reinvest your dividends without having to think about it?
DRIP is an acronym for Dividend Reinvestment Plan. It is an arrangement where dividends are automatically reinvested into more shares.
Thus, a DRIP plan makes it easier and, at times, cheaper to reinvest dividends.
Before you join a DRIP plan, it’s good to understand how it works,
its benefits and drawbacks, and how you can join.
What is DRIP Stock Investing?
When you buy dividend stocks, companies pay you periodically for holding their shares. A dividend is a way for the company to say thank you for investing in us.
In a DRIP plan, instead of receiving that small dividend check at the end of every financial period,
the company reinvests the dividend payout and buys more shares in a DRIP plan.
How Does DRIP Stock Investing Work?
A DRIP plan offers investors an opportunity to reinvest their cash dividend and purchase the company shares.
However, they will need to buy the shares directly from the company.
Since the shares come from the company’s reserve, these aren’t offered through the stock exchange.
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