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Posted by
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$1,000 into DRIP for child - which company?
Posted by Boh on 7/10/14 at 10:49 am00
For my kid, I am looking to invest $1,000 directly into a company with a good track record of paying dividends. Which would you pick? Some that I am considering are:
General Electric
Johnson & Johnson
Coca-Cola
Verizon
AT&T
Colgate
Exxon
Chevron
Procter & Gamble
Doing dividend reinvestment, it seems like a good idea to just buy some shares today and just hold it for 20-25 years for when children graduate college. Has anyone done this for their kids?
General Electric
Johnson & Johnson
Coca-Cola
Verizon
AT&T
Colgate
Exxon
Chevron
Procter & Gamble
Doing dividend reinvestment, it seems like a good idea to just buy some shares today and just hold it for 20-25 years for when children graduate college. Has anyone done this for their kids?
re: $1,000 into DRIP for child - which company?Posted by LSURussian on 7/10/14 at 11:00 am to Boh
quote:
AT&T
re: $1,000 into DRIP for child - which company?Posted by Hoyt on 7/10/14 at 11:08 am to LSURussian
Altria (MO)
/Thread
/Thread
re: $1,000 into DRIP for child - which company?Posted by LSURussian on 7/10/14 at 11:24 am to yellowfin
quote:Disney is a good stock but for a DRIP, its dividend is pretty low.
I let mine pick..
With $1,000 he could only buy 11 shares which means it would take almost 10 years before he would have accumulated enough dividends to buy one full share.
quote:
How old is the kid? I let mine pick....his disney stock is doing very well
It does seem like a good idea to let them pick, and could be a teaching lesson about investing, which they should get used to early. I don't think mine can pick - not even 3 yet
But I do want a company that the kids can understand - that's why the big ones seem like a good idea to keep them interested.
This post was edited on 7/10 at 11:28 am
re: $1,000 into DRIP for child - which company?Posted by Boh on 7/10/14 at 11:28 am to LSURussian
quote:
Disney is a good stock but for a DRIP, its dividend is pretty low. With $1,000 he could only buy 11 shares which means it would take almost 10 years before he would have accumulated enough dividends to buy one full share.
That's what I need to look into, is how long before I'd be getting an extra share each quarter on dividend reinvestment. The GE stock initially peaked my interest. $1,000 could get 37 shares right now. The dividend is about 3%.
That AT&T stock looks legit for this though. Could buy 28 shares today, and with a 5% yield I'd be getting about 1 share per year for now.
This post was edited on 7/10 at 11:31 am
re: $1,000 into DRIP for child - which company?Posted by OnTheBrink on 7/10/14 at 11:29 am to yellowfin
Same here, my son wanted Microsoft (big gamer) and my little girl wanted Hershey (big Chockie Milk drinker). Both are doing well.
re: $1,000 into DRIP for child - which company?Posted by Feed Me Popeyes on 7/10/14 at 11:59 am to Boh
given that you're lookin 20-25 years, of those I'd choose KO (followed by JNJ and PG).
CL is too overpriced for consideration. Tech is totally unpredictable for your time horizon. I love XOM and CVX, but not as first choices (again, for your specified purposes). GE cut dividends as little as 6 years ago
CL is too overpriced for consideration. Tech is totally unpredictable for your time horizon. I love XOM and CVX, but not as first choices (again, for your specified purposes). GE cut dividends as little as 6 years ago
This post was edited on 7/10 at 12:16 pm
re: $1,000 into DRIP for child - which company?Posted by kennypowers816 on 7/10/14 at 12:12 pm to Boh
Why not diversify a little bit and buy a mutual fund or ETF?
For example... VYM has 8 of the 9 companies listed in its largest 15 holdings.
For example... VYM has 8 of the 9 companies listed in its largest 15 holdings.
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re: $1,000 into DRIP for child - which company?Posted by Boh on 7/10/14 at 12:42 pm to kennypowers816
edit duplicate post
This post was edited on 7/10 at 12:49 pm
re: $1,000 into DRIP for child - which company?Posted by Boh on 7/10/14 at 12:48 pm to kennypowers816
quote:
Why not diversify a little bit and buy a mutual fund or ETF?
I thought about that as well. I personally don't know enough about the pros/cons of doing the direct stock purchase with dividend reinvestment vs. a dividend/index ETF. Both seem to have very low fees, if any.
Large cap stocks that have a track record of increasing dividends each year over the last 15-20 years just sound very promising to me, and with dollar cost averaging the appreciation over the long term seems like it would pay off. If I'm off base here please let me know; a good etf such as VYM could provide the same results I'm looking for. Long-term dividend reinvestment is what sounded appealing to me when I started researching some of the best companies for it.
quote:
but sometimes for kids the fact they can actually see they own stock in a company they know and like can keep them interested and learning.
This is a very good point, and I think an important factor. If my parents would've told me as a little kid watching Jungle Book that I owned part of Baloo and Mowgli I would have been excited as hell, and it definitely would've peaked my interest in investing at a young age.
Telling your kid that you own a bunch of different companies that some guy in an office in New York manages just doesn't have the same ring to it.
That being said my parents did neither, and not only did I have to learn on my own, but my mom looks at me with wide eyes when I tell her I invest in stocks.
re: $1,000 into DRIP for child - which company?Posted by Ace Midnight on 7/10/14 at 1:21 pm to Feed Me Popeyes
quote:
given that you're lookin 20-25 years, of those I'd choose KO
50+ years without missing a dividend - like a Swiss Watch.
The brand that defines brands and is irreplaceable in the market. He won't get rich, but he will get paid - on the regular.
Yes, the idea of being able to tell my kids that they own Coke, McDonald's, Visa, etc. seems like it would mean more to them.
But in all honesty, for my purposes I'm looking for a consistent return on investment for them. Having direct purchase of stocks would just be a bonus to get them interested in it, which would help them out when they are getting ready to enter the workforce.
But in all honesty, for my purposes I'm looking for a consistent return on investment for them. Having direct purchase of stocks would just be a bonus to get them interested in it, which would help them out when they are getting ready to enter the workforce.
re: $1,000 into DRIP for child - which company?Posted by yellowfin on 7/10/14 at 1:42 pm to Ace Midnight
KO is another stock in his portfolio
re: $1,000 into DRIP for child - which company?Posted by Ace Midnight on 7/10/14 at 1:58 pm to yellowfin
quote:
KO is another stock in his portfolio
To quote Warren Buffet:
"I plan to hold KO - well - forever."
This post was edited on 7/10 at 1:59 pm
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