Money Never Retires

The great thing about money invested wisely for retirement? It keeps working even after you stop. Wondering how to maximize your funds for your retirement? This week Jeff Fleming reviews dividend reinvesment plans and the basic principles of financial planning.

Dear Jeff:
Do you recommend investing through dividend reinvestment plans?

Thank you, Rhoda

Jeff Says:
Dividend reinvestment plans (commonly referred to as DRIPs) are offered by publicly traded companies to allow shareholders to purchase additional shares of the company with the dividend it pays, instead of the company sending the shareholder a check. The shareholder can even buy fractional shares, which avoids the necessity of having to accumulate enough money to purchase a whole number of shares at once.

This means that your money gets to work for you right away. Oh, did I mention that additional shares could be bought without a fee or commission? In fact, many companies allow individuals to make additional purchases with as little as $10, again without fees or commissions.

Planning for Retirement Do you have a solid financial plan for your retirement? Yes, I want to be secure in the future. No, I haven't had time. or just check the results.

DRIPs create a win-win situation. The company benefits from the additional working capital it receives from long-term investors. The investors benefit from reduced costs and the opportunity to purchase shares of large companies on a systematic basis and without waiting until they have a lump sum of cash to invest.

For a more detailed discussion of DRIPs, visit DRIP Central, a complete online guide to investing.

Don't Let Your Money Retire

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