Stocks — DRIPS

Radio Transcript, 60 seconds, for use during week of October 1.

This is an Invest Wisely minute brought to you by Iowa State University Extension.

If you are investing for a financial goal many years in the future, you may want to consider a company that has a dividend reinvestment plan, also known as a DRIP.  This means you receive no cash dividend income, because you will be reinvesting those dividends to purchase additional shares of stock.  And you can buy more shares with extra cash you want to invest.

Drips are an easy and less expensive way to purchase additional shares of stock, because you aren’t paying any brokerage fees.

But remember, this will only work for you if you really don’t need the dividend income  in the near future.

Invest Wisely comes from Iowa State University Extension through a grant from the Investor Protection Trust providing investor education on the web at investorprotection.org.