TUESDAY, MAY 11, 2010
Full DRiP: A new beginning
I have been blogging about the benefits of DRiPing along with the different ways of DRiPing for the past week and I have just been initiated to the 'Full DRiP'! I have been doing synthetic DRiPing for years now but 'Full DRiP' is a new venture to me.
All you need to do is get one share! Nothing else. The fee on getting the first share is actually low if you do it part of the groups. You don't need to request a share certificate at all. I have done it 2 ways to acquire my first share in 3 companies.
Buy or exchange through another investor
I have bough my first share of Bank of Montreal (BMO) through another investor. All I did was ask on the 'Share Exchange' forum (See the DRiP investing resource center) to acquire my first share for the cost of the share + 10$ appreciation fee. The steps are simple:
- Register on the forums
- Post on the Share Exchange
- Get in touch with whomever is selling a share
- Pay the person (share price + 10$ for mail cost and thank you)
- Wait a number of weeks for all the registration to happen
I am currently waiting to receiving confirmation from Computershare on my Bank of Montreal (BMO) share purchase/transfer.
Buy through a group purchase
Buying through a group purchase is when you cannot acquire shares from anyone when you want it. You can initiate the group purchase or simply participate in one. They fill really fast though, so you don't want to think too long if you are interested. The group purchase is usually up to 10 people. The organizer will do the following:
- Buy 10 shares + transaction fee
- Request a share certificate (cost differs by discount brokers)
- Fill out all the necessary forms for registration (group organizer and everyone else)
- Register with Computershare or CIBC Mellon
- Wait a number of weeks for all the registration to happen
I am currently waiting for my first share with Telus (T) and Enbridge (ENB).
It's that easy!
It was really easy and not expensive at all when you participate in the exchange. The 'underground' DRiP groups are really good at exchanging and helping others. It goes a long way in reducing the entry cost. Once I am setup, I can decide when I do the optional cash purchase (OCP) and how much I invest (some companies have a minimum). Because of the lead time in getting setup, I decided to get setup with a group of shares all at once just to have them ready.
Will a financial advisor ever promote such investment? I doubt because they make absolutely no money. There are no fees to earn.
Financial Literacy
Getting my kids setup with DRiP this way is part of my financial teaching for them. Once I have my share, I can easily set them up. They will have years to see compound growth in action!
Happy DRiPing!
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