Thursday, March 29, 2007

DRIPs a Good Idea for College Students?

When you think of the things you might have purchased or do purchase as a college student beer, music (unlikely), food, and housing probably come to mind. Safe to say DRIPs don't come to mind for many people, if they know what one is at all (a dividend reinvestment program which generally allows fractional share ownership).

How about DRIPs as a smart investment for college students? I don't know about you when you were in college, but I didn't have expendable income to be throwing around investing. Look at the staggering average amount of student loan debt people come out of undergrad with these days or the costs or any professional school. If you can afford that kind of tuition and still have money in the bank then maybe this is a good idea for you.

I remain unconvinced that this is a practical solution, mostly because the article suggests that you start with $200, then make payments of around $50 a month. For the average college kid - who isn't still living off mom & dad's credit cards if we can clarify here - $50 a month is a good chunk of change. True it might only be the equivalent to a cable payment or cell phone bill, but if you are making minimum wage and not working full-time substantial none the less. Let me know what you think.

Wikipedia - DRIPs

Source article at Forbes