Direct investment plans or DRIP’s make investing so easy even kids can do it! Since these investment plan allows you to start investing at a young age this is a great investment for your kids that helps you to build your wealth over time. With a commitment to investing at a young age this can mean great returns for you or your kids as they get older. This return happens due to the passing of time, as your investment grows and gains interest, you get to sit back and reap the benefits of that return. This idea is based-off compounding and can be a very good choice to look into while researching places to invest your money if your young or if you are looking to invest money for your kids. Allow me to explain a bit on how DRIP’s work.
With the simple use of compounding interest, you can take something as small as $100 and invest it at a young age allowing that initial investment to grow into $11,000. This can happen without even throwing more money into the initial investment, just sitting back and watching your money grow before your eyes. Now you would be correct in assuming that you would have to allow some substantial time to pass to have your investment grow like this. However, what if instead of just investing a one-time amount of $100, you continually added to that investment? For example if you were to start with $2,500 and annually add the same amount every year from the youthful age of 18 until the tender age of 65. You would have made a $60,000 investment and also would have made about $2.6 million!
That is a lot of money, but for many of us $2,500 may be too much to put away each year towards an investment. That’s fine, the point is that investing at a young age and allowing money to build over time means easy money for you no matter what the amount is. The only two things needed on your part is an initial investment, and of course patience to watch that investment grow overtime. This is where DRIPs come into play, DRIPs allow you be a part of the stock market without having to use a stockbroker. DRIPs are simply stocks that allow you to make direct deposits into them. It is easy to find which stocks have a DRIP program as well. All you need to do is visit various websites to find what stocks provide a DRIP’s program. An example of one of these websites is at directinvesting.com and all that you need to do is go into the “Search for DRIPs area” and go from there determining what stock or program best fits your plans. Not all stocks are created equal and they all have different dividends, products, etc. So you must choose what is right for you, and do your research.
The other thing you will need to do is to register for a DRIP account. This is free and you can do this all online following the different links to do it. If you can invest from the company of your own home, without the need of a stockbroker, and have the ability to invest and know that whatever you put into the investment can grow just with time, I’m telling you right now it’s worth looking into. If you choose to go this route you may just find yourself sitting on a nice little nest egg for later on in the future. Shoot, why not do it so your future can look a little brighter right?