DRIP – DRIP – #32

In an era where smartphone apps have pretty much eliminated brokers, investing by or for young people has gone the way of the buggy whip. The reason I am writing this BLOG, is to make managers aware of an investment strategy that they should share with their employees to allow them to start funding a future education, retirement or provide funds as needed. I am sure that most people don’t know that DRIP’s exist – the four letters stand for dividend-reinvestment plan, however, there are millions of people participating and millions of accounts out there. There are 700-800 companies with plans; some aren’t as attractive because of high dollar requirements to participate, but others have no fees and you can get in for $10 or $50. It started me in stock ownership at a very young age and the result is a nice number of shares that increase every quarter as I read the statement with great interest and pride.

DRIP’s serve as a nice opportunity to introduce young people and new investors to the market, and allow each of them to invest in specific stocks that lead the markets and put them in complete charge of something they know, can follow, and own. Beats a faceless fund or ETF run by one individual and a very complex startup and maintenance in terms of having to purchase higher price stocks in order to add to the investment. There aren’t many places you can invest $50 and start investing in something they know, add in small amounts as the individuals get access to some money as gifts etc.. A great way to teach young people about markets, stocks and accountability.

Please have your human resources department investigate this approach and put on a presentation that will allow employees a low-cost approach to managing their and dependents investments. Drip-Drip!!