Ask any homeowner or any plumber and they will confirm the damage that a little drip can do to a home.
But there is another drip that’s used for good and not for destruction. It’s called a D.R.I.P. It’s an acronym for Dividend Re-Investment Plan.
Here’s how it works: some stock companies not only go up or down in value but they also pay a portion of the profits back to each shareholder in the form of dividends. You can take that dividend check and spend it or invest it somewhere else.
Or, you can tell that stock company to re-invest those dividends payments back into the company to buy more shares. The more shares you acquire, the bigger dividend checks you receive, that will buy more shares.
You’ve just created a compounding effect on your money that builds like a rolling snowball.
Albert Einstein is attributed with saying:
“Compound interest is the 8th wonder of the world. Those that understand it, earn it. Those that don’t understand it, pay it”.
I use a company called GiveAshare.com to issue single shares of stocks as gifts for births, birthdays, and weddings. Then I show the recipient how to use that single share to understand the financial game.
A D.R.I.P. combined with other investments like a 529 college savings plan is an excellent way to grow a young persons financial future. While both investments are earners, the D.R.I.P. will issue a physical check that helps drive home that investments pay you.
Always accept that 1st dividend check, then re-invest all other dividend checks to let it compound.
If you go to GiveAshare.com you will see a huge variety of companies to choose from. I use the company so often that I have my own discount code. To receive a discount at purchase, use code: MonkSays
-Monk
We spend 12 – 20 years in school learning about every subject, except for money. Then we spend the rest of our lives trying to figure out how to make money or how to grow the money we have.
My approach to financial literacy is to teach it in a way that makes the complexities of finance so simple that your investing actions become instinctive.
To the youth, young adults, and the mothers who raise them,
Financial Literacy: Monk Says… Learn the Game
#FinancialLiteracy
#FinancialFreedom
#DividendReinvestmentPlan
#DRIP
#GiveAshare
#AlbertEinstein
#MonkSays