<<I'll try to give some specifics but it still might be a little vague because I'm an IRA greenhorn. What if I were to Drip $50 a month into Campbell's and $50 a month into Johnson and Johnson vs. $100 a month into a high risk IRA since I have a good 35 years until retirement. If this example is still incomprehensible could you give an example of where a DRIP might be more beneficial and one where an IRA would be the better choice. Thanks.>>Sometimes it's easier to make two or three simple decisionsthan one complicated one. Whether to invest in an IRAand what to invest in are two seperate issues.Since your an IRA greenhorn I'd suggest you learn more about IRAs before making the decision.Instead of comparing the DRIP investment in Cambell'sand Johnson and Johnson with an IRA in investment X,compare the DRIP in Cambell's etc. to an IRA in a discountbrokerage invested in Cambell's etc. *This is simpler. The stocks will have the same gross rate of return in the DRIP and IRA. The difference in net ROR (what you keep) is from different transaction costs and tax treatment.You'll probably find that the IRA is better than the DRIP.Both Cambell's Soup and Johnson and Johnson pay dividends. These will be taxed as regular income each year in the DRIP, while compounding tax free in the IRA. The IRA is also better unless you plan to hold all your stock for the full 35 years (lethargy beyond sloth, IMHO. **)If you decide that stocks in an IRA are better than stocks ina DRIP you can then compare stocks in the IRA with investment X in an IRA. Again this is simpler than theoriginal question because there is only a single difference.If you decide that the stocks in the DRIPs are better, ask the same question of investment X: "Is it better owned inan IRA or a taxable account." If X is better owned in a taxableaccount, you again have a simpler problem. If X is better inan IRA and the stocks in the DRIP, well ... fall back on the total return, but you've learnt a lot about IRAs, DRIPs, taxes and costs so you're no longer a greenhorn.* It may be very expensive to invest $100 per month in stocksat a discount broker, but you can accumulate a lump sum in a money market fund (or Vanguard S&P 500) for 12-18 months, then invest. Over 35 years a one year delay does not make much difference, it's smaller than the fee and tax differences.** This is a Warren Buffet joke folks, I'm not insulting anyone.
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