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Hello,

I am thinking of investing in DRIP-like fashion and am wondering if anyone has advice about using the Moneypaper/Temper service vs. Sharebuilder. I can see that Sharebuilder is not actually an investment in DRiPs but lets you invest in a DRiP-like way, and it seems to cost a lot less than actually enrolling in plans using Temper (I'm not a subscriber so it's even more expensive).

If all I want is to invest in quality stock over time without forking over an initial huge lump sum, is Sharebuilder just fine? Or is it somehow better to enroll in the actual DRiP itself?

Thanks!

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If all I want is to invest in quality stock over time without forking over an initial huge lump sum, is Sharebuilder just fine? Or is it somehow better to enroll in the actual
DRiP itself?


There has been discussion about this in the past, so if you go back through the archives of this board, you will find many messages dealing with this topic. Also, there are a few articles on this in the DRIP section of the MF site dealing with this. Basically, the discussion always comes back to the same place -- it depends. If you pick a company that has a fee free drip, you are better off using moneypaper to invest. Yes, there will be a larger up front cost, but there will not be a fee everytime you make an additional investment like you would have with sharebuilder. On the other hand, if the company you are looking at has fees for their DRIP, sharebuilder may be the better option.

One question I have always had about Sharebuilder (and Buy & Hold) is what are the fees associated with selling shares and taking money out of your account and putting it back into your checking account? I've looked at both sharebuilder.com and buyandhold.com, but haven't really found this info. Both allow me to easily take money out of my checking account, but is it just as easy to move money back in? Yes, I am a long term investor, but I do need to take a large back end cost (if it exists) into consideration when deciding which route to pursue. Hopefully somebody more familiar with sharebuilder (and buyandhold) can clear this up for me.

- Rich
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In the DRIP Archives, I found this excellent article by George Smyth:

http://www.fool.com/dripport/2001/dripport010109.htm

I had also seen once a comparison of three representative stocks and how using a company-sponsored DRP, pseudo-drip (like Sharebuilder) or a regular discount broker affected the returns. Unfortunately, I can't find that now. If anyone out there can give us a link to it, I'd appreciate it! (Should have printed or bookmarked it the first time I saw it)

Best of luck in your investing!
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Oops, forgot to mention: I would highly advise you to watch the $10 specials on Moneypaper - I've bought the last four (JNJ, KMB, PFE and MO). They are currently focusing on fee-free or low-fee DRP programs, which makes the specials even better!
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I had also seen once a comparison of three representative stocks and how using a company-sponsored DRP, pseudo-drip (like Sharebuilder) or a regular discount broker affected the returns.

I'm wondering if you might be thinking of these articles:
http://www.fool.com/dripport/2000/dripport000208.htm,
http://www.fool.com/dripport/2000/dripport000215.htm, and
http://www.fool.com/dripport/2000/dripport000222.htm.

Cheers -

george
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One question I have always had about Sharebuilder (and Buy & Hold) is what are the fees associated with selling shares and taking money out of your account and putting it back into your checking account?

The fee for selling is about $20. I think that this is a little high, but then again, if you are making regular purchases over the course of a decade or so, then it is of considerably less consequence.

Cheers -

george
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Many thanks! The third post was the one I wanted to share:

http://www.fool.com/dripport/2000/dripport000222.htm.

This was especially insightful information for me. Right now, my account in Sharebuilder is set up to purchase only stocks of companies that don't provide DRPs. Once again, since I'm a VERY small-time investor, the once a month, all-you-can eat at SB works fine for me this way.
Meanwhile, I'm grabbing at the $10 specials in Moneypaper for fee-free and low-fee DRPs, and will probably have my DRP port filled within the next three months (courtesy of Dave Fish and the wonderful folks at MP).
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As my colleagues have said, there has been much debate on this board about these DRIP type brokerages. I even stirred the pot a bit recently with a trilogy of posts about the subject. I suggest you check the recent posts from the "Your own Drip" trilogy and their corresponding replies. Namely "Your own Drip, Your own DRIP-part II, and Your own DRIP- the Trilogy." They should help a wee bit.

Brian
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Hi everybody,

I am currently also considering Sharebuilder for investments.
Although in a ROTH IRA form, which they offer for free and their $3 a trade or $8 a month option for filling it up with all the goodies out there, from Mutual fund to DRIP and stocks.

From what I read so far in this thread and the archives, I believe SB is a good choice for me and what I would like to do.
What I am still wondering about is that they are offering a free Roth IRA, but if they do, I'll take it ;p

Since I do not pay taxes on the content in the ROTH, I should be able to get dividends free as well.
Can someone answer this: Would I have to pay the $20 for each withdrawl?

Overall, this sounds way to good to be true.
Can someone please tell me whether I fell victim to some flaw in my theory here?
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Thanks everyone -- all good info, I found out exactly what I needed to know!!
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