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7 answers

Well, no. The CLOSEST you can get to buying stock on your own is to buy stock from the company directly, direct investing, and the company has its own brokers whom it uses to facilitate this. Everybody wants his buck, you know!

These direct investment plans are called Dividend Re-investment Plans (DRiPs). The company, every quarter, will take the dividends your stocks produce and re-invest them directly into buying MORE stocks sans charging you TOO much, i.e. just pennies on-the-dollar. Some companies may not charge you at all to reinvest your dividends! You would need to look that up on the web site to learn if the company even bothers with charging fees for reinvesting dividends.

There are drawbacks to DRiPing if you are looking to become a day-trader because you won't have direct access to your stock immediately after you purchase it, unlike the online traders. It will take some time to transfer the stock to you in a form that you can use to day trade, should that appeal to you. Certificates MAY be a pain in the neck and cost money to transfer for the online trading groups that day traders tend to utilize. Day trading has never appealed to me. Today, some reporter on ONE station was telling me that buy and hold may not work anymore! Bah! This reporter has NO idea how BnH works! Let ME explain how this is meant to work.

If you have some money sitting somewhere, you can invest it directly into a company, like Phillip Morris (MO), that pays relatively-high dividends, for example. The cost of reinvesting the dividends, every quarter, is low, relatively speaking. No idea how you feel about "sin" stocks, but these companies tend to offer those above-average dividend yields to attract and retain investors.

DRiP investing, generally, appeals to someone who wants to invest in a company for a long-term, a life-time - if you will, and there is a desire to minimize the costs associated with this investment. Later in life, if he still owns the stock, like the Big MO, he can turn OFF the dividend re-investment and have the company mail the check to him directly or deposit it into his banking account. This becomes additional cash income on a quarterly basis rather than additional stock. He will be taxed on it nonetheless as well. There's no escaping the taxman! *grin*

Again, this sort of investing doesn't appeal to everyone. If you know anyone who works as a stock broker, he/she won't like this idea because the charges are SO low. The margins are small when using a DRiP to invest. So this idea doesn't appeal to most brokers, in general. So he/she may be rather reserved about explaining it to you.

You won't need $25,000 to set up a DRiP account with most companies, like people below are trying to explain to you! My FIRST purchase back in '97 via a DRiP through a company in which my parents owned stock, as well, was a tiny amount of $1000! It didn't need to be THIS high, either! So you can ignore people who are claiming that you need an inordinately HIGH amount of money to get this started. Nor will you need your parents' help either. Don't let THAT scare you away!

There are companies, like General Electric, where you can invest as little as $10/week in the company. General Electric, in general, will do almost ANYTHING to get you started and retain you as an investor. You can find this sort of information on MOST company web sites.

Well at least the web site for a company that OFFERS dividends!

IMO, GE is one of the most investor-friendly big companies there is! This claim is due to them requiring only $10/week to open a DRiP account! From my experience, most companies demand a minimum investment of $50/month, which isn't THAT much more than $10/week if you do the math, but $10/week is almost NOTHING!!! Any Gomer can afford THAT!

What is so appealing about DRiP plans to investors like I am is that you can get the certificates after you've reached a certain number of shares - a block (100 shares) is a convenient goal. If you are MORE affluent, you can set your bar higher and invest actively until you reach, say, two blocks, five blocks, or ten blocks, even, which is 1000 shares of stock! You can then take this certificate for your block(s) of shares to the bank and use it as collateral against a loan. Once you reach your goal, you STOP investing in THAT company, take the certificate to a bank, and start using those shares to secure any loans you may need at the time, or just let the bank keep the certificate(s) in ITS vault.

So, after you have your certificate for however many blocks you have bought, you can tell the company to KEEP investing your dividends to purchase more stock. You have STOPPED purchasing the stock actively. Now, the company buys it for you every quarter with the dividends. You have your original certificate, and the company will still purchase stock for you every quarter! Sounds like a SWEET deal to me!

Granted, this is NOT as exciting as online trading. So no one is going to bother explaining it to you since there is nothing in it for him/her to do so, i.e. only the companies make a marginal profit with DRiPs and they can write this off as a cost of doing business! So everyone wins! Ameritrade, or what have you, isn't going to get a penny from this. So they sure aren't going to PAY someone else to tell you about it, for example.

Since you are using your stocks to secure the loan, the bank isn't going to charge you a HUGE interest rate on the loan. You will get lower interest rates as well as see an improvement on your credit rating.

This is a more appealing method for securing a loan if it is available to you. Yes, you pay taxes on the dividends you earn, but the dividends go to you! If, on the other hand, you were to use cash to secure a loan, the bank keeps the dividends that the cash generates while you are paying the back the money that you borrowed! Bah! This is one of the reasons why using stock to secure a loan is more appealing.

There are some MINOR drawbacks, of course. For example, the bank is not likely to utilize the TOTAL value of the stock for the loan. Due to the transient nature of the market, the bank, likely, is to allow you access only to 75-80% of the value of the stock. This is just a little CYA on the part of the bank so that if the market takes a dive while it is holding the stock, you don't give the bank the finger and stop paying the loan due to you owing more than the stock is worth.

Oh! There is another minor issue with this. The bank may not want you using the money from this loan to buy MORE stock! You may be asked to sign an affidavit claiming as much so that the bank, again, has its @ss covered should the market turn against your stocks.

Other loans like signature loans have HIGHER interest rates because they are not secured by anything other than your credit rating. Your credit rating will shoot through the ROOF if you follow this idea of using a stock-secured loan, explained above! You may have banks sending you ALL sorts of notices in the mail telling you WHY you need to borrow THEIR money! *laughter*

Oh! One other thing! You can set up DRiP accounts as Roth IRAs too! If you do this, then the taxes become less of an issue - almost a non-issue if you set it up right!
However, you would need to consult someone MORE knowledgeable than I, like a licensed money manager, about this issue to get valid answers! The option is available to you nonetheless.

Another issue associated with DRiPs popped into my head. You MAY want to be careful about which companies you purchase. You CAN buy the Dow 30, if you like, and your fund's performance will mimic the Dow. You can buy the largest stocks of the S&P if you think they will be doing well. It's up to you.

Just be sure you understand the company's business a little before you jump into its boat.

2007-10-23 02:54:01 · answer #1 · answered by ? 6 · 1 0

1

2016-12-24 04:05:32 · answer #2 · answered by Anonymous · 0 0

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You can't literally go purchase stocks yourself without a broker. The broker must find buyers and sellers for you. However, you don't necessarily need to pay alot of brokerage fees. There are several options for you. You need to first decide whether or not you want an online brokerage such as etrade, Fidelity, Vanguard, etc. With these, you will deal with lower fees but you have to do more of the legwork yourself. If you know a little about what you are doing, this may be a good way to go. On the other hand, you can choose to meet with an actual broker or financial planner. If you choose to go this way, be sure to pick someone who you like and connect with. Choose someone who you trust and has the heart of a teacher. Be sure to not invest in anything that you don't completely understand. If you find a good person, the advantages are that they can understand your personal retirement goals, investment objectives, and risk tolerance. The fees are higher but it can be worth it. For instance, would you rather pay a .5% fee on 10% returns or a 2% fee on 14% returns? Consider more than just the fees. I personally have chosen to use the online brokerage firms becuause I have done quite a bit of research and have thought through my investment goals. Best of luck to you! Hope this helps!

2016-04-04 04:45:18 · answer #3 · answered by Anonymous · 0 0

How To Buy Stocks Yourself

2016-12-18 03:37:06 · answer #4 · answered by Anonymous · 0 0

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2016-02-16 19:14:40 · answer #5 · answered by Anonymous · 0 0

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2015-01-25 04:06:26 · answer #6 · answered by Anonymous · 0 0

there is online site you can buy stock for 10 dollars a trade. there is also D.R.I.P. stocks which you can buy stock directly from the company.

DRIP= Dividend Re-Investment Plan

2007-10-23 03:06:14 · answer #7 · answered by specail ed 3 · 0 1

YES... you can set up an account with an online service like E-Trade or Scottrade... but you need a minimum of $25,000 to set up the account and you need good credit.

2007-10-23 02:54:31 · answer #8 · answered by Anonymous · 0 1

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