Jon Degan, 33
Shares in Enbridge, Telus, CIBC, Scotiabank, Fortis, Manulife, TransAlta, H&R REIT and RioCan REIT.
About nine years ago, Jon Degan traded in his mutual funds for stocks with rising dividends and dividend reinvestment plans (DRIPs). He's become something of an expert in Canadian DRIPs and has authored a guide, posted online at dripprimer.ca.
How he invests
Company-sponsored DRIPs offer commission-free, automatic reinvestment of dividends at discounts of up to 5 per cent off market prices - even for fractional shares. Mr. Degan also likes that many DRIPs come with share purchase plans (SPPs). They let investors buy commission-free shares directly from the company on a monthly or quarterly basis.
"DRIPs and SPPs make direct investing in great Canadian companies easy, low cost and understandable to the average citizen," Mr. Degan says.
"I don't claim DRIPs and SPPs are the only solution, but for someone who may only have $100 to $200 every month to invest in stocks, they should be considered."
"With a young family, my level of funds to invest varies widely and I don't have a lot of free time to watch markets. So my DRIPs keep reinvesting - down to the thousandth of a share - even if I forget about them. They also let me ignore daily price swings, and focus on recurring purchases and the power of compounding that arises from reinvesting dividends."
He has done very well with his Enbridge DRIP, established nine years ago. "I've seen the dividend double and my reinvestments through the DRIP have built more than a quarter of my position."
It was trying to trade stocks, and finding that his emotions got in the way.
"If you aren't saving or investing, start immediately even if it's small."
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