I want to buy stock with DRIP option, can i put the gain into my IRA, or the gain will be in the company?

Question

thanks for answer my prior question. Which investment u think will be the best for me rite now, i am 21 years old, full time student, full time job. Thanks

Answer 1

The DRIP puts your any and all gains back into your stock in the company. Thats where the words "direct RE-INvestment program" comes from.

If you want your gains from any stock then you must not sign up for ANY DRIP's. You will need to go with companies that send you a check for your gain amount and then you turn around and put it in your IRA.

I am happy to hear you are caring about your finances at your age. Try to max out your IRA each year. If you have a ROTH or a traditional, you can do $4,000 combined between the two, unless they change the law shortly. A simple IRA you can do $10,000 but I think they will or already have raised that.

Have you checked out companies that you can buy directly from the company without a broker ? IF not, search here on the web for " direct stock purchase plans". Also, if you are brave enough and do your homework, open an online trading account with someone like "scott trade". It costs you nothing to open one up, it has learing tools right with in the sight, and if you do purchase or sell you simply pay $7 with NO commissions on what you gained. I started my son investing at the age of 13 and there is no turning back. He is now 21 and more in his asset column than most 50 year olds.

You are going to be just fine simply by starting early... keep up the good work, never let up on contributing to your retirement and life will be grand !!

: )