Friday, October 11, 2013

Compounding has Begun


I am very new to dividend investing and to investing in general, so I hope you, the readers, follow me on this amazing journey which will have a lot of ups and downs along the way. This is a very exiting time for me. I just brought my first share while only using the dividends I received the previous months.

That's right. I did not use any of my capital to buy more shares of a company. The money that I invested, which you can see in the Trade - Buy tags, are all working for me to receive more money in the form of dividends.

My brokerage account is with Scottrade. They have this program called "Flexible Reinvestment Program". This allows the user to pool all there dividends that they received from the portfolio in one lump sum. What I like about this program than the traditional DRIP, is that I get to pick and choose the company that I want to buy with the dividends I received. This allow me to purchase company's that I feel that are under value and have a high potential for future growth.

Today I received enough divided to make my first purchase.

I brought shares of BP

1 share @ $42.24

 This now gives me 29 shares of BP

 This increase my 12-month forward dividend by $2.16 a total of $876.88.

 I updated my Portfolio to reflect the change.

What have you been buying with your dividends or just using DRIP?


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12 comments:

  1. jdavis4982October 11, 2013 at 7:06 PM

    I use Scottrade too! I like the FRIP Program myself. Congrats on adding to a solid position BP. I own some shares myself. I am going to use My FRIP to establish a position in CSX this month and continue until I have 40 shares. Great blog so far. I will continue to follow.

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    Replies
    1. FFDividendOctober 11, 2013 at 9:16 PM

      Thanks for the comment. I love the FRIP program it helps to optimize the dividends we receive.

      Delete
  2. Dividend SWAN InvestorOctober 13, 2013 at 12:37 AM

    I use Etrade and have been looking at the Scottrade FRIP plan. I do like being able to pick your own security to reinvest the dividends in. I am just using DRIP plans and am happy with being able to accumulate fractional shares.

    I have quite a few monthly dividend payers in my portfolio so as long as the companies are able to maintain the dividend and/or raise the dividend it continues to compound nicely. I wonder if the FRIP will stay unique to Scottrade or the program and features will evolve into other brokerages. I may consider the program in the future, but also wouldn't rule out having an account ith DRIP and another account taking dividend checks if I ever had enough capital to allow it.

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    Replies
    1. FFdividendOctober 13, 2013 at 9:11 AM

      I think that's one of the downside with the FRIP. Not being able to by fractional shares means new investors would have to wait a while before they can see the greatness of compounding.

      Thanks Dividend SWAN for stopping by and commenting.

      Delete
  3. Retire Before DadOctober 13, 2013 at 1:37 PM

    FF,

    I hadn't heard of the Scottrade program. To my knowledge, TD Ameritrade does not do that. I stick with the traditional DRIP at Computershare. Congratulations on the compounding. Feels good, doesn't it? Keep it up, the money will keep flowing in.

    -RBD

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    Replies
    1. FFdividendOctober 13, 2013 at 2:59 PM

      Great blog you have. I am going to start to follow.

      Thanks , it does feel good. Next year is going to be big. Can't wait to have a full year of doing this and see the progress.

      Thanks for commenting.

      Delete
  4. All About InterestOctober 15, 2013 at 10:13 AM

    This FRIP plan seems awesome when you are just starting to build your portfolio. If I had known about one when I started DG investing I would have been very interested. I'm fortunate enough now that I have enough dividend income monthly plus capital contributions that I just choose what I want to buy in 2k+ chunks to avoid large fees.

    Good luck, you are certainly buying some great companies.

    ReplyDelete
    Replies
    1. FFdividendOctober 15, 2013 at 11:28 AM

      Thanks. I really like the FRIP program. It allowed me to add more share to an undervalue company.

      Thanks for commenting and taking time to read my post. :)

      Delete
  5. MartinOctober 17, 2013 at 1:09 AM

    I like FRIP a lot. I think it is a smart idea. I have Scottrade account as well as TD Ameritrade. I've been with TD since 2006 and have great deals from them. Recently I also opened an account with Motif Investing. They have a great idea of investing too.

    ReplyDelete
    Replies
    1. FFdividendOctober 18, 2013 at 9:38 AM

      Yea FRIP is great. I have to check out Motif Investing. Thanks.

      Delete
  6. MartinNovember 16, 2013 at 1:22 PM

    In my Scottrade account I only have 3 shares (AGNC, FGP & PSEC) and using all of their dividends to buy PSEC shares only. Once I have enough I will switch and continue buying FGP for example or AGNC, etc. I like FRIP a lot.

    ReplyDelete
  7. UnknownJuly 13, 2016 at 2:58 AM

    Asian shares within reach of 2016 peak as risk appetite improves and the investors risk appetite damaged by uncertainty from Brexit.

    Epic Research

    ReplyDelete

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