Lowering Your Costs: How to Take Advantage of Direct Purchase Plans
by Maria Crawford Scott
In today’s lean and mean stock market environment, there is a real appeal to stocks that provide a stream of dividend income that can be purchased at a relatively low cost even if you are investing very modest sums of money.
Direct purchase plans allow you to do just that. The plans are a form of dividend reinvestment plan that allow you to go straight to the source—the company itself—for all share purchases, including your initial shares.
In this article
- A Broker Bypass
- Where to Get Information
- ADR Direct Purchase Plans
- Direct Purchase Plan Options
- The Costs
- A Note About Taxes
- Putting the Plans in Context
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Best of all, direct purchase plans are easily accessible and manageable through on-line accounts with the plan administrators, a select group that currently consists of four major firms.
Currently, a little over 400 companies offer direct purchase plans, with minimum initial investments ranging from as low as $50 to as high as $1,000, although $200 to $250 is the most typical minimum range.
In addition, a growing number of foreign company stocks now have direct purchase plans available through their ADR (American depositary receipts) programs.
To read more, please become an AAII Registered User or CLICK HERE.
Discussion
This is a great list to have, thank you. I agree though with the last comment in the article, this is not reason enough to purchase a company's stock.
The world has always been changing quickly but it feels more difficult in this day and age to feel confident in the long term prospects of any one company, which is how I would like to use this approach, investing a set amount each month.
I do appreciate this list for further research.
posted over 2 years ago by John from Colorado
