Dividend Reinvestment Programs: Investing for Beginners

Educating high school students in the real life application of investing provides for a life long education in financial security. Unfortunately, many high school curriculms do not include investment as a part of the education curriculmn. For students not attending college, the opportunity to learn the very basic of financial decisions is commonly missed. AS parents, teaching high school students about Dividend Reinvestment Programs, DRIPs, may provide a foundation for financial freedom.

With as little as $10, high school students can learn the value of investing. With most brokerage firms not offering single share purchasing options, under a company's DRIP program, students can purchase one share of stock, have dividends reinvested and watch the growth of that $10 over many years.

Dividend reinvestment programs, DRIP, offer advantages in additional to automatic dividend reimbursement. Of these, once of the most significant advantage is the ability to purchase the share, directly from the company, with no fees and, in some cases, at a discounted price.

Teaching these saem high school students to invest wisely is the key to financial freedom. Commonly, once particiatping in a DRIP program, the teenage investor will monitor and watch the share prices more closely. The teen may then become more interested in finaicial investing programs on television and, in turn, may begin to sow interest in investing into other types of portfolio programs. Most commonly, these same children, who show interest in share value, will begin to invest in mutual funds as college students.

In addition to providing basic information regarding DRIP funds, parents should encoruage the teen to join a teen associated investment club. Websites such as www.fool.com, offer teenagers with advice and guidance in investing and suggestions for beginning their own investment clubs. Also, showing a teenager the brilliance of compounding interest is a significant factor in ensuring the teen understands the impact of their spending each day.