Many people don't realize that a number of well-known companies offer DRIPs or Dividend Reinvestment Plans. Here's how investing with DRIPs works. First, you need to get a list of the companies that offer DRIPs. When you have saved enough to purchase a share, the DRIP plan buys it for you. An investor must agree to reinvest dividends, the money you earn on each share.
Dividends are per-share payments to shareholders, usually paid four times a year.
DRIP shareholders' dividends go to buy more stock. There are many advantages to beginning to invest at an early age. Not only will your money be working for you for years to come, but investing when young helps people become familiar and knowledgeable about money. DRIP accounts are an advantage for any age investor who has long-term accumulation goals. With DRIPs, you are not inclined to pull out part of your invested savings because doing so may close your account or dramatically slow the buildup of funds.