DRIP Investing, Step by Step

NAIC's Low Cost Investment Plan

Other methods of acquiring a first share are much more cumbersome than buying directly from the DRIP company, but the rigamarole that investors must endure to set up a DRIP is a small price to pay for the long-term dividends the DRIP will pay!

One of the least expensive ways to buy one share is through the National Association of Investors Corporation (NAIC). NAIC is a not-for-profit organization comprised of both investment clubs and individual investors, and provides a program of investment education for both novice and experienced investors. Membership is $79 a year, and includes a subscription to Better Investing magazine; discounts on software; and eligibility to participate in the Low Cost Investment Plan.

The Low Cost Investment Plan allows individuals to purchase a single share in each of over 140 companies for only a one-time $7 setup fee, in addition to the share price. Companies participating in the Low Cost Plan include AFLAC, AT&T, Chase Manhattan, Colgate-Palmolive, Dow Chemical, ITT Corporation, Kellogg Co., Maytag Corp., RPM, Inc., Texaco, Inc. Wendy's International, and over one hundred more. After acquiring a single share through the Low Cost Plan, investors are automatically registered in the company's dividend reinvestment plan.

While the number of companies that currently participate in the Low Cost Plan is limited, the Plan's low setup fee more than makes up for the short list. To be fair to NAIC, they have added many more companies in recent years and the Plan continues to grow. Also, establishing a DRIP through the Low Cost Plan can take eight weeks or longer.

National Association of Investors Corporation
P.O. Box 220
Royal Oak, MI 48067

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