No. of Recommendations: 2
To establish a DRIP you simply have to contact your broker or the stock issuer. I know that with TD Ameritrade you can have your account set so that all positions in dividend stocks are automatically enrolled in DRIPs. That is useful if you don't want to have to contact them every time you buy a dividend stock.

You might want to think about how much you are paying in fees by spreading a relatively small amount of money over so many stocks.

While people like to say that you can "set it and forget it", I don't find that to be true. My advice would be to send your $400 per month to your broker and have it held in a money market account (there is no fee for that) and use it to accumulate shares of your stocks when they dip. Lower your average cost per share when possible.

Keep in mind that except with a Roth IRA (which is not subject to taxes on gains) in the United States you will have to pay 15% tax on dividend income whether you sell the stock or not. It's a good practice to keep track of how many shares you purchased and at what prices as well as how many shares you received via DRIP and at what prices.

Some discount brokers charge more or less than others, but the level of service received is often commensurate with what you are paying for. I like TD Ameritrade because of their excellent Think Or Swim trading platform (desktop as well as phone app) and the availability of educational resources such as their daily "Swim Lessons" and their webcasts and live educational events that you can often take advantage of for free if you are an account holder. The customer service is also excellent IMO.

Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.