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I personally think it's a great deal that they only charge for direct buys and sells of shares. (Not the "DRiP"py part.)

Exactly! I didn't mean to insinuate that they would charge you to reinvest dividends, I'd avoid any plan that does like the plague. I'm worried about the purchase commissions themselves, especially when first starting a DRIP. While it may be quicker and easier to set up a synthetic DRIP for kids, it also can lead to their getting ripped off.

For example, if one of them chooses Intel, they'd be paying BuyandHold $2.99 for each purchase of shares, when they could purchase shares for free through the INTC DRIP. In order to keep their fees below 2%, they would have to invest $150 per OCP. I can't afford to send in $150 per month, especially considering I wouldn't have to if I went with the regular DRIP plan.

The main drawing point of a DRIP is the ability to send in a lot of small investments over a long period of time in order to take advantage of dollar cost averaging and compounding. Fees avoided now would lead to tens of thousands of dollars in the long run.

BuyandHold is useful, as I've said before. But I don't think it should be the first choice for buying into DRIPs, unless you wish to DRIP companies like MSFT. Starting a regular DRIP of INTC costs about the same as starting a BuyandHold account ($20 + price of one share), buy by going the regular DRIP route you A) don't have to pay a commission EVER AGAIN (if you send them checks directly) and B) don't HAVE TO make 5 purchases a year. I know most people would make over 5 purchases a year, but being forced to make purchases doesn't sit right.

The "DRIPy" part is only half of the equation, the Direct Stock Purchase (DSP) part is the other half, and it is even more important as you are starting out. If you begin with a small amount of capital, your dividends will be very small (I made less than $0.50 this month in dividends). If I would have had to pay $2.99 per OCP, I would be in VERY sad shape. But by avoiding the fees my miniscule dividends actually meant something to my portfolio. Over time they will mean more and more, but it's still nice to have SOME net positive movement thanks to dividends.

I know you probably know all of this already, but people new to DRIPs might not. Since this board is (presumably) about how "poor people" can invest, I just want to make sure there is no confusion about the difference between DRIPs and Synthetic DRIPs. Both have advantages, both have disadvanatages.

Fool on!

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