Money will not necessary drip miserably for you if you effectively know how to invest in DRIPs. This is a short acronym for Dividend Reinvestment Plans. DRIPs are good in the sense that they take advantage of the concept of compounding by immediately reinvesting the client’s dividends instead of waiting for action after every quarter, as some companies giving dividends are prone to doing. The minimal costs are also a welcome benefit, as compared to other investment instruments that require a lot of cash to use. Here are the steps that will help you invest in DRIPs.
- Dividend Shopping. The very first thing you need to do when you are investing in DRIPs is to do some company research for your dividend shopping. Just because your investment initially is small does not mean you don’t have to find the best. You might find it useful to browse for DRIPs of your choice in the Drip Wizard Search Engine. They will clue you in with the existing DRIPs of different industries. The same evaluation strategy for other financial instruments works for evaluating the goodness of a company for investment: performance, growth and stock prices. The top dividend list given by websites such as Dividends Value can also help you.
- Simulation of Returns. The Drip Calculator is an online tool that will really help you simulate the returns you can expect. You just need to plug in all the necessary values. Other means of simulating returns include evaluating all your DRIPs as a whole. The simulation of returns will allow you to have visions of what your investments will turn into in the near or far future. While it’s true that this is not a foolproof way of predicting everything, knowing your general direction and possible outcomes are still the best way to make cool and calculated risks that will bring you best returns for your money. No matter how little the money you have invested, it can generate the best returns for you if you pursue them all with the proper timing.
- DRIP Related Events. Websites such as Drip Investing and Moneypaper’s Direct Investing allow you to attend events and meet people with similar goals in succeeding in DRIP investments. Make sure you are able to attend these events and enrich your knowledge and people base who are into the same thing.
- DRIP Software. Once you have narrowed down your preferred companies and are made ready to invest and maintain your stocks, you can keep track of your progress by means of using a consolidated Drip Software such as the one provided by DRIP Wizard. You might want to do away with this and manage everything manually at the beginning to really get a hand at the whole mechanism that makes DRIPs work. But as soon as you learn the ropes and get the hang of things, you will find these tools handy in helping you manage everything efficiently.
Enjoy investing in your DRIPs and you will find that later on, they will
love you back fiercely in the form of ensured financial returns.