No-Fee DRIPs VS. Brokers
What's the least expensive and most efficient way to build wealth in the stock market?
| Temper Enrollment Service | E*Trade | ShareBuilder | |
|---|---|---|---|
| Minimum To Open | $0 | $1,000 | $0 |
| Ownership Fee | $50 ($25 for subscribers) | $40 | $75 |
| Auto DRIP Enrollment | Yes! | No! | Yes |
| Cost Per Trade | $0!* | $12.99 | $4 |
* Assuming you are investing in a company that has a no-fee DRIP.
A Fee that Happens Only Once!
How many times have you invested time and money into something that seemed like a “great deal”, only to be slammed with hidden fees buried in the fine print? Not with the Temper Enrollment Service! For a one-time $50 fee ($25 for Moneypaper subscribers) we start your relationship with one of over 1000 different companies. Once the first transfer is complete, Temper Enrollment Service never asks you for another dime…..EVER! Make as many purchase orders as you want for that company and never pay another fee to Temper.
The pseudo DRIP company (ShareBuilder) offers you low fees as long as you commit to trading each company 12 times a year. Temper Enrollment Service does not depend on your paying continuing fees. It transfers share(s) to your name and opens an account for you on the books of the company. When you order directly through the company, you’re in control of how often you invest.
If the company doesn't charge fees you can invest as often as you please completely free of any transaction cost.
Fees Can Really Add Up
At first glance, investing with an online brokerage house seems like a low-cost way to start and maintain a portfolio. But, as you can see in the calculator below, even small amounts add up over time.
The Moneypaper recommends having a well-diversified portfolio of at least 10 stocks in 10 different industries. If you were to follow that advice, adding funds once a month per company, you would end up making 120 trades a year. If you consider having to pay that fee for 10 or 20 years or more, that "low-cost" trading opportunity can be viewed for what it really is--a prohibitively expensive way to invest.
Getting enrolled requires a one time cost of $50 to make your initial purchase. After that, you can invest regularly in a no-fee DRIP and pay absolutely nothing. Project that out over 5, 10 or 20 years or more and it becomes very clear why investing through no-fee or low-fee DRIPs is a wise choice for investors.