Re: Are DRIPs worth it?

From: Derrick Cole <dccole@mindspring.com>
Subject: Re: Are DRIPs worth it?
Date: Thu, 27 Aug 1998 21:03:43 -0400

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</lurk>

I used DRIPs to start from literally nothing (read as $0).  Through periodic,
consistent investing of small amounts (i.e., <= $50) at no "cost" (I strategically
chose DRIPs with no measurable commissions), I was able to amass enough equity to do
exactly as you describe - I've since consolidated my DRIPs into a single discount
brokerage account with free dividend reinvestment, and can "enjoy" the improved
liquidity, single statement, etc.

Over the couple of years the above took to accomplish, I improved my cash flow such
that I'm now able to make larger periodic investments (i.e, > $1500) into that one
account, so the commission paid is (by percentage) still negligible.

>From my position, DRIPs indeed remain a viable means by which to begin investing,
with most/all your investment dollars working for you day one, and not requiring a
loan to get started (to begin investing directly with a broker might require $2000
or more up front).

My $.02,
Derrick

Ira Krakow wrote:

> With the dramatic decrease in trading commissions (Brown and Company charges
> $5 for a market order, a number of other charge less than $10, even
> Schwab.com at $29.95 isn't too bad), why bother with DRIPs?
>
> If you have an online brokerage account, you get instant liquidity, you can
> in many cases reinvest dividends, and you don't have as much paperwork as
> with DRIPs.  I'm starting to believe that DRIPs aren't really worth it any more.
>
> Comments?
>
> Ira
>
> -

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