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Author: TMFJeff Big funky green star, 20000 posts Top Recommended Fools Old School Fool CAPS All Star SC1 Red Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 36496  
Subject: Drip Investing FAQ, part 2 Date: 2/5/1999 5:01 PM
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Okay. The FAQ should ask and answer typical questions related to Drip investing and to (especially for this board) the Drip Portfolio. (Drip Portfolio questions are secondary, though, of course. The main thing that we all should want this FAQ to do is help newer Fools with the basic Drip investing questions. This will help the board, as well, because it will keep it free of the same oft-repeated questions.) Anyway, I know that many of you will think of many things that Vince, Brian and I wouldn't think of on our own.

I'll start with one example of a question and answer that we'll use on the FAQ.

Q. What are dividend reinvestment plans, or DRPs?

A. DRPs (or Drips as we call them) are investment plans sponsored by over 800 public companies that allow shareholders to buy stock directly from the company in amounts ranging from as little as $10 per month to as much as $15,000 (or more!) per month. The plans are usually commission free (in fact, the Drip Port tries to invest only in commission-free plans), or have minimal fees. You can invest in most plans every month if you wish. Meanwhile, you have the option of having all of your dividend payments reinvested into more shares of stock, usually for free as well.

These plans carry many others advantages, including the ability to buy in small amounts time and again, the ability to dollar-cost-average into your stocks, and, let's not overlook the fact that they alll but FORCE us save money regularly. The fact is, most people in this country don't have bankloads of money stashed away; they must save money with each paycheck if they hope to build lasting wealth for whatever benefit. But saving money in a savings account isn't enough. It needs to be invested. DRPs are the perfect investment for the Fool with a little knowledge.
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