I checked one thing off the list below so far, so a quick update in case it can help anyone!
What is DRIP investing?
DRP stands for Dividend Reinvestment Plan, also known as Drip Investing, a very fitting name for what it is. When dividend stocks pay out dividends, a dividend reinvestment plan automatically reinvests the money paid out back into the stock. This allows you to take advantage of dollar cost averaging while increasing your holdings – automatically! And slowly but surely (drip, drip) your wealth hopefully increases.
How to set up dividend reinvesting in your Fidelity Account:
In my Schwab account, when I make a purchase I’m given the option of automatically reinvesting dividends or not when I set up the trade. It’s really easy. However, I couldn’t figure out how to do that with Fidelity and thought maybe it wasn’t an option. I realized this week that there must be a way, and used Fidelity’s handy chat tool to quickly ask a representative. They sent me nice easy instructions, and I’ve now set all my holdings to automatically reinvest. In case you too have been bashing your head against a wall looking for how to do this online, here’s quick and easy instructions:
- Hover over “Accounts & Trade” in the top menu bar on the far left.
- Select “Update Accounts / Features” from the drop down menu.
- Select “Dividends and Capital Gains”.
- There will be a list of all your securities. Some of them might already be set up to reinvest (for instance your Fidelity Cash Reserves). For those that aren’t, select “Update” under Action.
- Select “Reinvest in Security” instead of “Deposit Into Core Account”.
- Now you can also decide whether to apply this to all equity positions currently in the account, and/or future equity purchases.
Then click update and you’re done! Now you can feel like a dunce for not figuring this out sooner