Investing Through a Dividend Reinvestment Plan: DRIP Your Way Rich

Imagine a bucket, filling with water from a leak under your sink. Seemingly tiny and unassuming, you leave the bucket to catch the tiny drips which fall. Over time the drips collect, and add to the water already collected. In a weeks time, without watching or thinking, your bucket is full. "But how? It was only a tiny, tiny leak... how did it fill my bucket so quickly?" The bucket in this analogy is your investment fund, the drips are your cash, and the water collected is your riches, even your millions.

What is a DRIP?

A DRIP or DRP is dividend Reinvestment Plan, which basically lets you buy stock in a company without paying any money to buy it. You may be saying "How is that possible? You need money to invest." and you would be partly right. A DRIP is a plan companies that are publicly traded offer to anyone who owns at least 1 share or "stock" of their company. After you buy that stock, if it is a large company that offers dividends, you can ask for a drip, which will take or your dividends on your stock and use it to buy more stock without you lifting a finger. This, my friends is fearless, painless, investing advice to getting rich, and living comfortably.

How is this able to make me rich?

Investing a small amount like $500 dollars in a drip and leaving it, say, 10 or 40 years will make you comfortable, but if you add some money from every paycheck to your portfolio, you will be rich. Okay, now don't tune your face up, "I don't have 25 years to wait for my money. I want to be rich now." I understand that so just stay with me. You need to first set up an account with an online stock broker, such as Sharebuilder. I personally use them and they have small fees, and it's super easy to start a DRIP there.

After you set up your account, you need to think of some companies that you believe will be around for quite some time. This is not picking the next "hot" company or whatever your mom's friends said he heard from his boss. This about picking a business which will be around, and consistently make you money and make you rich without worry.