January 25, 2012

Direct Stock Purchase Plans

Most of the biggest companies are also the best performing stocks.  While I'd rather see small investors dollar cost average into a diversified index fund, there are some people who insist on buying individual stocks and there is one solid advantage, virtually no fees at all.

One very under reported way to accumulate shares of your favorite company, $50 or $100 at a time is through Direct Stock Purchase Plans or DRIP's which is simply buying stock directly from the company itself.  Actually you will be getting the shares through what is called a transfer agent who physically handles stock shares.  No middleman.  No brokerage account.  You get your statement from the company.

DRIP actually stands for dividend reinvestment program which is exactly what happens to your dividends automatically, they buy more shares directly from the company.

This is a great way for investors to avoid the brokerage firms which is why you will never hear this from your stockbroker or financial adviser.

Almost every company in the S&P 500 has a DRIP program, Google for the toll free number, call for shareholder services and get started, you can do it online as well for some.

Let me know if you need some help, money coaching available or send me an email.  Happy to help!


  1. I've been using drip's for years, great way to reinvest into great companies.

    1. Billy,
      Congrats, one of the smartest things an investor can do is take matters into their own hands!