They are seldom recommended by brokers due to the low rate of commissions received. However, these
reinvestment plans can be very powerful long-term investments. Studies have shown that DRIP’s are one of
the best strategies on Wall Street.

They are inexpensive and easy to start. New investors to the stock market should definitely consider a DRIP Plan.

Companies like Toyota, Royal Canadian Bank, Sony, Bank of America, General Electric and many other Blue Chip
Stocks can be purchased through your DRIP Plan, with as little as 1 share in most cases.

These long-term plans are great for beginners as well as veterans. Check them out.

Best of Luck

In the beginning you LEARN HOW:
A] the stock market works.

B] to invest in many, many various ways.

C] to properly trade

D] many other concepts and aspects.

Beginning or novice ['newbies"] investors and traders ALWAYS make mistakes. In fact, throughout a person’s avocation or hobby to do trading, he/she will make mistakes.

In the very beginning, you READ AND LEARN about the market and how it works:
Read “Investing for Dummies”
As you are reading and doing research about the investments you are interested in, sometimes you’ll come across a financial or investment term you never heard before.

You can usually find excellent, easy-to-understand definitions of many financial and investment terms by going to Investopedia’s dictionary.

http://investopedia.com is a free site. It’s recognized by Y! A as a “Featured Knowledge Partner”.

It probably won’t be long when you’ll feel you’re ready to invest your hard-earned money. Before taking that step, you really should do research about what you are investing in. It also has a free, paper trading platform. You can set up a virtual account and almost trade as though you were trading with real money.

http://finance.yahoo.com is also recognized by Y! A as a “Featured Knowledge Partner”
END E-MAIL #1
The thought processes are:
1] to have more successful trades than failing trades.
2] to minimize the losses of those losing trades.
3] “To live to trade another day.” Having enough money in the trading account to return to the market.

ALL this is accomplished by a few true expressions used on Wall Street:
Some trading expressions come to mind:
A] “On Wall Street there aren’t any gifts.”
No one gives anyone else anything – not even stock tips.

B] BUlls [BUyers] earn money.
BEars [SEllers] earn money.
Pigs get fat.
Hogs [Greedy Traders] get slaughtered. They lose the money in their trading accounts.

C] “Trees don’t grow to Heaven. Neither do stocks or any other investments.”
In other words: What goes up, MUST come down!

D] “Plan your trade. THEN trade your plan!”
Have a trading plan with rules for that plan for each strategy.

$____ may not be enough for you to get started. I want everyone to know I DO NOT own any portion of this man’s estate, nor am I associated with him or any one else connected with him in any way. I am not part of the publishing company or an agent or anything else. This man does not know me from Adam AND I don’t know him. I know of him and the wonderful book he wrote. THIS IS NOT SPAM.
You should buy a copy of this book:
“The Richest Man in Babylon” by George S. Classon. You can get the book on http://amazon.com
Its very easy to read. Its very easy to follow. You can write in it. You can make notes in it. All you have to do is to read five [5] pages – Let’s count
1 – 2 – 3 – 4 – 5 pages of this book – or any book – each and every day.
OR You can leave it sit on the shelf, on a table or on the floor and let it collect dust.

Thanks for asking your Q! I enjoyed answering it!

VTY,
Ron Berue
Yes, that is my real last name!

There is great insite on how to invest, how to locate a trusted cpa and what you should avoid investing in for children.

Good luck!

Stock: A piece of a company. If one person owns all the stock, then they are the sole owner of the company.

Dividend: A slice of the profits, split among everyone who owns the profitable company’s stock. Normally, this is between 2 and 25 cents per share per three months, paid in cash.

Bonds: A loan. Since a company can’t get a large enough loan at a single bank for what they need, they print bonds instead. When you buy a bond, you are loaning the company money, with the promise of getting it back plus interest.

Mutual fund: A large collection of stocks.

IRA: Individual Retirement Account. Set up by Congress a few years ago, it allows you to put money in, deduct it from your taxes, and then withdraw it when you retire.

Roth IRA: A newer type of IRA, invented by Senator Roth. You put the money in, you can’t deduct it from this year’s taxes, but when you withdraw the money at retirement, you take it out tax-free. You can only put earned money into a Roth, not gifts. (The money you put in has to show up on your own 1040 tax form as income)

The basic process is:
1. Open an online brokerage account through your local bank branch.

2. Transfer some cash in. $100 or less should do it.

3. Select a “drip / spp” stock. There’s a list of them in the book.

A stock certificate is a piece of paper that says you own a small portion of a company.

When the company makes a profit, they can give each (stock) owner a “dividend” as either cash, cheque, or more stock.

By choosing stocks that pay dividends in the form of more (partial) stocks, you benefit from compound interest. This is “Dividend Re-Investment Plan” – drip.

By choosing a stock that is “spp” as well, you can automatically contribute additional cash every month or quarter.

4. Purchase 1 stock of a drip & spp company using the online brokerage account. Might cost $30 to do the trade, plus price of stock.

5. Convert the stock from electronic to paper – might cost $50.

6. Whatever company stock you own, look up their ‘transfer agent’ in the investor section of their web page. Write to the transfer agent and tell them you want to enroll in drip /spp. They might ask you to send in paper certificate.

7. Whenever you feel like it, contribute a few more dollars to your drip / spp.

8. Sit back and watch the money grow over time.

http://beginnersinvest.about.com/c/ht/01/07/How_Buy_Single_Share0994115582.htm