So I'm 21 now and if everything pans out alright then I'll probably have a future of some kind. I realize while I'm in school it might be a little to early to start thinking about retirement but from everything I've heard, the earlier you start saving, the better.
I've scoured the web and read several books about the best ways to save for retirement and I found a really unconventional method that I think would be an excellent strategy for me. It's called Dividend Re-investment and Share Purchase Plans. Most companies that are openly traded on the stock market pay out dividends to all share holders. These dividends are small amounts of money for every share you own and are paid out quarterly or monthly. It's important to mention that not all companies pay out dividends and that some don't pay them out regularly, often missing a month or quarter. However, there are a number of companies that have paid out dividends consistently for over 50 years! Even better, some of these companies have raised their dividends every year!
Some of these companies offer dividend re-investment and share purchase plans. If you enroll in this plan then instead of receiving a dividend cheque, your money is used to buy more shares in the company. Also, you can send a cheque in to buy more shares whenever you feel like it. This is called DRiPping or DRiP investing. The idea is that by sending money in every month or quarter and re-investing your dividends, by the time your ready to retire the dividends being paid out will be enough to live off of. Then you can cancel your Dividend Re-investment Plan and just get the cheques sent to your house.
If you want to read more about DRiP investing head to
DRiPInvesting.org and read some of the articles and talk to people on the message boards.
Later on in the week I'll go over this some more.
Mood: Meh...