DRIP Happenings

Call To Action

The number of Canadian corporations offering dividend reinvestment and share purchase plans is dwindling. At the same time more and more Canadian trusts are offering them. In fact, I've had to rewrite a portion of this article because Telus has just announced they are converting to a trust structure. The number of Canadian trusts with distribution reinvestment and unit purchase plans now outnumber corporation plans by about three to one. My Google alerts shows one or two new U.S. plans appearing on a weekly basis.
It would seem the only way more Canadian corporations will offer plans is if enough investors request them. As such I'm asking all ShareClubs and individuals to complete the letter included with this article, address one to Investor Relations department for each company shown and submit them. I'm also suggesting that everyone focus on only a few corporations at a time for maximum concentration of effort. As Ken's letter is the motivation for this article I suggest we start with these companies: Canadian Pacific Railway, Canadian National Railway, Finning International, Petro-Canada, Shell Canada, Saputo.

For ease and simplicity, a downloadable pdf which contains a letter to each company is supplied. All you will need to do is save the pdf to your desktop or another location of your choice and print the pdf letters and sign. Whether letters are done individually or as a groups of signatures, the important thing is to do it.

Robert Gibb (OperaBob), gibb_robert@hotmail.com

Successful DRIP Experiences

Below are two successful DRIP stories. If you'd like to share your experience with DRIPs please send to Dale Ennis at Canadian MoneySaver.

"In 1985, my daughter was born and I began to receive a monthly family allowance cheque from both federal and provincial governments. I deposited these cheques each month in a separate bank account for her. In 1992, her balance had grown to $4,185.00 from these monthly cheques alone. I then transferred one share of BCE Inc. into her name (having already obtained a Social Insurance Number), thereby opening her very own DRIP account with BCE. I subsequently transferred the balance from her bank account.

Every time the balance in her bank account grew to a few hundred dollars, I would purchase new shares through the Share Purchase Plan with the money. All dividends were being reinvested as well.

Due to my financial situation in earlier years, I was entitled to the maximum amounts from both governments. So the magic of compounding had a great start. Presently, I qualify for very little as I work full time but the direct deposit of these amounts still goes to her account and accumulates slowly.

Please note that I never added any extra money to this account. There were no allowances, no gifts, no lump sums of any kind.

Today, my daughter has 390 shares and at a recent all-time share price high of $76.30 amounts to $29,757.00! This money is legally hers and is taxable in her hands, an added bonus of income splitting!

By the time she is ready for university, I believe she will have the money she needs to pursue her dreams.

I don't think this money could have grown to this amount through any other investment, and certainly not as easily!" L. A., Montreal, QC

J.L. of Kitchener discusses his holdings during our 3-year bear market: "I presently deal with 10 dividend-paying companies. Since May 1999, I have averaged 11%, to January 13, 2003. Best of all, no MER."