Anyone here involved in any DRIP plans? I've considered getting into one. I hold a relatively small position in a company that has one. Do I still pay taxes on those dividends the same as I do now? I know I avoid the broker fee.

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Posted by CHSBears

Baton Rouge

Member since Aug 2007

779 posts

Posted on 4/12/13 at 11:34 am to BayouBengal

Yes on the taxes, will still receive a 1099-Div for the amount.

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Posted by BayouBengal

Member since Nov 2003

28275 posts

Posted on 4/12/13 at 1:37 pm to CHSBears

Thanks. Doesn't really make much of a difference as my position is small but still something to consider.

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Posted by ThaBigFella

baton rouge

Member since Apr 2006

2043 posts

Posted on 4/12/13 at 1:59 pm to BayouBengal

It's the best way to build wealth over time bayou bengal. When I was a teen, in the 90s my uncle gave me $5000 in Coke,Exxon,Altria to name a few, all were on DRIP's and today that $5000 in $46,000 give or take....last few days have been awesome to altria and phillip morris....anyways I pay tax on dividends received every year, its not a big deal unless you're bringing in $10k+ of dividends in which case take the dividends as cash and re-invest the remainder outside your tax obligation

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Posted by Zach

Gizmonic Institute

Member since May 2005

112469 posts

Posted on 4/12/13 at 3:58 pm to BayouBengal

I've been doing DRIP for a long time. I do have a mutual fund that is managed. But my 5 DRIP stocks have outperformed the mutual by double and I don't pay a broker fee.

I started with blue chips. Some don't allow direct purchase. In the 1990s I was advised to buy Dot Coms. I did not. The guy who advised me lost a bundle. Do some research.

Think of it as a savings account that actually makes money. Just put it in and forget it.

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