DRIPs are one of the best methods of investment. Investors can use DRIPs as a push to increase his/her personal wealth. Brokerage fees or commissions are not obligatory when it comes to investing in DRIPs. DRIPs often offer the repurchasing of shares at a discounted price. Over the long period of time DRIP is a successful strategy for investors.
|How do you qualify for DRIP?|
Any person who is a registered shareholder of the company can join in DRIP plan. The companies also offer circulars or prospectus to outline features of the plan.
Most of the companies permit to buy additional shares under DRIP without incurring additional brokerage charges. This is known as Optional Cash Purchase Plan (OCP). On the confirmation of purchase the following:
When shares are purchased under DRIP, the stockholder is eligible for active participation as in receiving reports in form of earnings, call report, etc.
A table to show stock dividend rnvestment plan to see how a stock investment grows when dividends are reinvested to buy additional shares.
|Initial Investment Amount:||$1000|
|Expected % Increase of investment: (annual)||20%|
|No of years to invest :||10|
|Current or expected Yield:||5%|
|Extra annual deposits by you:||Yes|
|If Yes: Tax Rate||5%|
|Year||Principal Balance||Yearly Dividends||Annual Contribution||Portfolio growth via Appreciation||Tax paid on Dividend||Net Dividend Reinvested||Increase Balance||Year End total Balance|