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How to start DRIP Investing for kids. What is a Dividend Reinvesting Plan?

4,303 views · Published 20 November 2017 · 10:28 · Indexed 6 November 2026

Channel: Canadian Real Estate Channel · 2017 · Education

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Not sure what a drip is?
DRIP Investing stands for Dividend Reinvesting Plan.

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I've always loved dividend investing, and DRIP investing is a great way to get into investing in dividend stocks.
 
To learn more about drip investing check out - 
http://www.dripprimer.ca/

From DRIP Primer:

DRIP is an acronym for Dividend ReInvestment Plan.   

    Canadian companies that are traded on the Toronto Stock Exchange (TSX), can decide to use the money they earn as profits to pay their shareholders.  This payment is called a Dividend.  Obviously, not all companies make money, and as such not all companies pay dividends.  Likewise, just because a company is profitable doesn't mean it will pay a dividend.  

    Let us pretend you own 100 shares of XYZ Company and a dividend is declared of $0.25 per share, so you would be paid $25.00.  Dividends are normally paid quarterly, so you get $25 every 3 month unless the company raises, lowers or stops their dividend payments. 

   Now what to do with that cash?!  Well, some Canadian companies offer to its shareholders the option of reinvesting that dividend payment by buying more shares in the company. Instead of receiving a cheque, you would receive more stock in that company.  This is called a DRIP. 
  A slight difference is with Income Trusts (Royalty Trusts, Real Estate Income Trusts, etc...) is that they pay what's called a Distribution and is most often monthly.  Distribution Reinvestment Plans exist just the same as regular DRIPs and the term is used interchangeably.

    DRIPs are very beneficial to shareholders since they offer many great features.  The biggest being Fractional Share Purchases of your dividend payment.  

  Example:
$25.00 in Dividends,  Share Price of $43.90, your DRIP would buy 0.569 Shares

To purchase your first share - checkout this community - 
http://www.dripinvesting.org/



Matt McKeever 
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Matt McKeever is a CPA, CA and Real Estate Entrepreneur in London, Ontario. On this YouTube Channel Matt will walk the viewer through how to invest in real estate using such strategies as the BRRRR method while also documenting his personal experience as a real estate investor. Matt began investing in real estate at age 25 by purchasing a student rental near Fanshawe College. In 2016 he's acquired over 25 units.

As well on this channel Matt will share his personal monthly spending and discuss the strategies and tactics needed to reach financial independence (retire early) at a young age. We’ll discuss such topics as safe withdrawal rates, how to build passive income streams and how to reduce your personal consumption.

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