Following up on the post “Financial Success Is Possible” recently, I received the following inquiry:
Q: How much does it cost exactly?
A: It varies by company and plan, but here are the exact numbers for the three stocks mentioned in that post.
Colgate Palmolive (CL): Transfer agent: Computershare. Minimum new investment: $500.00. There are some fees to setup the account ($10.00) and there is a $2.00 fee for each one-time investment, plus five cents per share.
Coca-Cola (KO): Transfer agent: Computershare. Minimum new investment: $500.00. There are no fees to setup the account, and there is a $5.00 fee for each one-time investment, plus five cents per share.
Johnson & Johnson (JNJ): to purchase through the transfer agent, you must already own at least one share. There are several ways to proceed. Get your first share another way.
– You can use an organization such as First Share. There is a small fee for an annual membership. (Before joining, check if the stock you are interested in is available.) You could join for one year to get your one share of numerous companies. I used First Share to get my first share of Johnson & Johnson.
– Use a low or zero-commission broker. Fidelity is one such large, established broker. It charges no fees to purchase U.S.-based stock. Minimum to open an account is $2,500.00. At that minimum, with current prices, you could purchase approximately 17 shares of Johnson & Johnson, that would pay about $17.17 per quarter, or $68.68 per year. There is no additional charge for dividend reinvestment at Fidelity.
There are other low or no-cost brokers. Not all brokers allow for dividend reinvestment. Before you choose a broker, be sure to check all fees and expenses. While there may be no fees for purchasing U.S.-based stock, there are undoubtedly fees and expenses for other operations.
Regardless of how you obtain your first share, be sure to indicate “dividend reinvestment” at the transfer agent or at the broker.
There are also organizations designed to give you the opportunity to gift one (or more) framed shares in numerous companies to a recipient. While nice, there are additional charges associated with such a gift above and beyond the cost of the share.
Needless to say, other companies have other minimums and different fees. As I am not a financial advisor, I cannot recommend one or another particular stock or company. However, I highly recommend sticking with large, established, stable companies that have been paying dividends for many decades.
Q. When you write about dividend investing, you say to choose companies that have been paying dividends for “many decades.” Why “many decades?”
Q: Where do I find companies that have paid and increased dividends consistently over time?
How did you get started? Have you started? Let me know here.
The illustration of a comet is from 1587 by an unknown author in a hand-lettered book entitled Kometenbuch (Comet Book), subtitled (in translation) “Comets and their General and Particular Meanings, According to Ptolomeé, Albumasar, Haly, Aliquind and other Astrologers.” It is currently in Universitätsbibliothek Kassel (Kassel University Library, Kassel Germany). License: Attribution-ShareAlike 4.0 International (CC BY-SA 4.0).
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