Companies that pay dividends to their shareholders more than likely offer a Divdend Reinvestment Plan, called a DRIP for short. With a Dividend Reinvestment Plan, dividends that you receieve from a companies stock are used to buy more of that companies stock. This is an automatic process, so everytime the company pays a dividend, stock is automatically bought using your dividends as capital.

     With dividend reinvestment plans, you don't need a brokerage account to get started, your dividends are automatically reinvested for you for free, and your money will grow year after year. Not only that, some companies allow the reinvested dividends to buy discounted stock. When the dividends are reinvested, the company may give you a 2-5% discount on the stocks market price. This means more stock, and more dividends for you!

     There are two types of Dividend Reinvestment Plans. The first type is Brokerage Run DRIPs. If you buy a stock that pays a dividend through a stock brokerage, they may reinvest the dividends for you at no charge. I know my online broker Zecco.com does this. The second type of dividend reinvestment plan is called the Company Run DRIP. With a company run dividend reinvestment plan, you buy stock directly from the company, and they will reinvest the dividends for you at no cost. The great thing about company run DRIPs is that you don't need a brokerage account to enroll in their plan.

     How to Find a Dividend Reinvestment Plan - There are thousands of companies that offer dividend reinvestment plans. Choosing one to invest in can be hard work. The easiest way to get started investing in dividend reinvestment plans is to research the companies you know. If you are familiar with a company, use it's products or services frequently, and never had trouble with them, you should look into investing in that companies DRIP. Here's a small list of well known companies that offer dividend reinvestment plans: Ford Motor Co., McDonalds, Gillette, and Boeing