Skip to main content
No. of Recommendations: 1
I did transfer everything away from Computershare and I do not invest any money in any DRIP plan with Computershare.

Unless I totally mis-understood what the Vanguard person told me you cannot buy a portion of a share in your Vanguard account. You have to buy at least a whole share and from what I understood there is a fee for that transaction. The dividends are re-invested at no cost that part is true.

What I am saying true DRIP investing is sending in any amount of money you have spare in a certain time period and buying however much of a share or shares that money will cover.

For example Kellogg's is around the mid 70's. If I send 50.00 that is not enough to buy a whole share but the money is used to buy a partial share. If I send in 100.00 it buys 1 plus some percentage of a share. That is the benefit of a true DRIP plan. The idea behind the DRIP was the company was providing a way for the small investor to purchase there stock at low to no cost. Over time companies have decided to out source the DRIP plans and won't pay for any part of it.

Kellogg's is one of the few companies that picks up most of the costs of DRIPing into Kellogg shares. There are some companies that have their agent running the DRIP charge for everything and contribute nothing to the cost of the DRIP transaction(s). There are some companies that have 15.00 cost just to set up the account, $5.00 check cashing fee, 3% cost for the transaction. Others like Kellogg picks up all those costs. So in the long run true the dividend from Kellogg is not as high as some but then as you slowly acquire their stock the cost was much less. So in a way it is a win win over other companies and their DRIP programs.

DRIP's were designed for the small investor who does not have a large chunk of cash to buy whole shares and pay transactions fees. But the idea is fading and the cost of participating in the DRIP for the small investor now is more expensive.
Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
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.