After reading The Dividend Playbook I realized the virtue of continuously reinvesting the dividends my family receive. I used to think "let me accumulate pools of dividend cash and then let me decide what to buy with the money when the price is right".
The best reasons for enrolling in Dividend Re-Investment Programs for me are:
1. We do not need the cash for these dividends now.
2. The DRIPs allow the repurchase of shares at zero commission.
3. Dollar-Cost averaging principles of accumulation are favorable vs market timing.
4. Compounded rates of return are possible through increasing the number of dividend paying shares.
Now that I am enrolled in DRIPs I am more inclined to seek out companies that pay stable and RISING dividends. I'm on the right track.
Eventually that is my goal too...I have a family of stocks that I am interested in and want to do intial purchases for all of them. Once I have bought all the stocks that I like I intend to add money towards them yearly and hope to use them as an income stream when I "retire". I have heard so much bad stuff about choosing that and of course the taxes and dca. But I am not going to let that deter me. I have a ways to go before I do that, but I definitely would like to hear more about your DRIPS.
The Dividends that have reinvested into more stock started coming in March. Some benefits:
A. The average costs of the stocks reinvested were less than their current market prices.
B. No trading commissions on DRIPs.
C. The additional stock provided an increased dollar value of dividends for the next pay date. The magic of compounding!
A. Getting the DRIPs recorded to my brokerage account took about a week longer than if I received simply cash.
B. Getting cash into my accounts to buy a NEW company stock will require cash from an outside source since I would no longer access dividend cash for this purpose.
Overall, I am a fan of DRIPs, and I wish I started doing it sooner.