High Dividend Stocks and Dividend Reinvestment Plans

There is a way to purchase high dividend stocks without having to open up a brokerage account or paying high commissions on those purchases - dividend reinvestment plans.

Dividend reinvestment plans, or DRIPs as they are often called, are ways and investor can reinvest their cash dividends by purchasing additional shares or fractional shares on the dividend payment date. Most brokerage accounts do not allow you to do this. The power of compounding your dividends year after year can be staggering. Consider this:



The chart paints a pretty amazing picture - reinvesting dividends provides investors with a much high return on their high dividend stocks than not reinvesting them. That is why I choose to invest in stocks that pay dividends.