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Howdy,

I am new to the idea of DRiP investing and have questions regarding the plan of attack. Should I use a discount broker, Moneypaper, or any of the other available services to begin? Or, to save some money and eventually realize a larger gain, should I buy direct from the company offering the DRiP? Please let me know some pros and cons of both methods.
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If you look through the archives you'll read all of the pros/cons concerning discount broker/MoneyPaper. Distilled, it is: Discount Broker - cheaper/more frustrating to deal with, MoneyPaper - more expensive/you can speak with a real person.

If you are just getting started, I would recommend MoneyPaper, as they will hold your hand and show you how it works, and you will receive their guide (valuable information). When you see how easy it is you may decide to save the money. Your call.

george
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AR1374,
welcome to the DRIP boards!  The question you asked is probably the one that has had the most time devoted to it.  Chances are that you are going to get a flood of responses, so let me be one of the first in the impending tidal wave.  The answer really depends on you!  Many people (including myself as well as the official Fool DRIP Port) utilize the services of the Moneypaper.  The whole process is very simple.  
1.  You join their organization (you even get a discount because you are a Fool).
2.  Select the company you wish to own, follow the process (which includes sending them the cost of the stock based on a recent high + a 10% cushion, and a $15 commission).
3.  Wait for a confirmation from Temper of the Times (the people that do the actual transacting).
4.  And then you will hear from the company directly or through their Transfer Agent.  They will even send you a self-addressed envelope for Optional Cash Purchases (OCPs).
Very simple.  Actually, I'm not even certain that you have to join Moneypaper (Dave Fish will probably answer this a bit more clearly), but I do know that as a member you do get lower commission charges ($15 v. $20).  And, if the stock sells for less than what you included in your purchase price, they send you the difference.

Other Fools have opted to go the discount broker route.  Equally economical, it just requires a bit more legwork on your part.  You are the one that has to purchase the share (make absolute certain that it is registered in YOUR name, not a street name.  This is critical!).  Then you must contact the Transfer Agent and alert them to the fact that you are a shareholder and would like to have your dividends re-invested.  If you choose this route, make sure that the discount broker does not charge you to register the shares in your name (I believe SureTrade and Ameritrade do not charge.  Stay away from Datek, at least as far as DRIPs go because they charge you $50 to register the shares.  Ouch!).

Whichever route you choose, the Fools will be right here to help you with any questions that you might have!

Welcome aboard and best of luck to you!  Let us know how it works for you!

Fool On!

racerboy
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Oops! Let's try this again without the crazy formatting!
Sorry! :-)

AR1374,
welcome to the DRIP boards! The question you asked is probably the one that has had the most time devoted to it. Chances are that you are going to get a flood of responses, so let me be one of the first in the impending tidal wave. The answer really depends on you! Many people (including myself as well as the official Fool DRIP Port) utilize the services of the Moneypaper. The whole process is very simple.
1. You join their organization (you even get a discount because you are a Fool).
2. Select the company you wish to own, follow the process (which includes sending them the cost of the stock based on a recent high + a 10% cushion, and a $15 commission).
3. Wait for a confirmation from Temper of the Times (the people that do the actual transacting).
4. And then you will hear from the company directly or through their Transfer Agent. They will even send you a self-addressed envelope for Optional Cash Purchases (OCPs).
Very simple. Actually, I'm not even certain that you have to join Moneypaper (Dave Fish will probably answer this a bit more clearly), but I do know that as a member you do get lower commission charges ($15 v. $20). And, if the stock sells for less than what you included in your purchase price, they send you the difference.

Other Fools have opted to go the discount broker route. Equally economical, it just requires a bit more legwork on your part. You are the one that has to purchase the share (make absolute certain that it is registered in YOUR name, not a street name. This is critical!). Then you must contact the Transfer Agent and alert them to the fact that you are a shareholder and would like to have your dividends re-invested. If you choose this route, make sure that the discount broker does not charge you to register the shares in your name (I believe SureTrade and Ameritrade do not charge. Stay away from Datek, at least as far as DRIPs go because they charge you $50 to register the shares. Ouch!).

Whichever route you choose, the Fools will be right here to help you with any questions that you might have!

Welcome aboard and best of luck to you! Let us know how it works for you!

Fool On!

racerboy
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AR1374,
The other thing I forgot to mention was that if you are interested in a company that allows DIRECT purchase (such as XON), then that would probably be the best (and most economical route to go).

Exxon has a minimum of a $250 initial purchase, but after that you can invest as little as $10 a week! They are my favorite DRIP! You can even set up your DRIP with them as a Roth IRA! How can you beat a company like that?

Way bullish on XON

racerboy :-)
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ar1374,

I think you can equate the pros and cons to that of buying fuel at the gas station. One is self serve and cheaper, the other full serve and costs a bit more.

Both methods of dripping require patience, however. Keep in mund that it's a slow process getting strated for the most part.

Oh, and Welcome to The Fool!

Foolishly,

Vince, A Fool
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Vince,
I love the analogy of a self-serve v. full-serve gas station!

I only wish I had thought of it first!!! ;-)

racerboy :-)
(at least Tony didn't think of it before me!)
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Thank You guys for being so nice to a new fool!!!!!
I've posted messages on other boards and didn't get much response at all, but you guys (ya'll here in Texas)on the DRiP boards have helped me a great deal. So, keep up the good work and don't forget about us newcomers.

Aaron

P.S. Racerboy, XON will be my first buy. Moneypaper will come next. Thank You!!!!!!!
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Aaron,

>>>>P.S. Racerboy, XON will be my first buy. Moneypaper will come next. Thank You!!!!!!!<<<<

Racerboy's right about Exxon. It's a great plan, and in theory, the direct-enrollment companies are the best way to join a DRP. But be careful because a lot of companies have launched direct-enrollment plans in the last couple of years, only to attach steep fees. So while a given company may ley investors enroll with a $250 or $500 initial purchase, they typically charge a $10 enrollment and then $5 on each and every cash investment thereafter. As you begin considering companies for DRPing, then, you may want to pay careful attention to any fees...which can take a big bite out of your return.

dave fish/moneypaper
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