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NOTE: I am in no way recommending these stocks, or the direct purchase plan, or any comunglemisinterpretation of any suggestions or implications. The mere fact that I used company names and stock symbols, was because this is a real world example. The 4 stocks outlined below are only used as a SAMPLE of the 13 that Equiserve offers that have IRA capabilities, and are ONLY used to outline REAL costs.

cliff-NOTE: please don't delete mods!!!

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I've been looking into direct purchase stock programs (Equiserve, Mellon, etc). I think because of the long term-ness of the situation, I'd like to do this through an IRA. I have a Roth which is currently held at Fidelity.

After looking into a few things, I could setup a few different IRA-Direct Purchase accounts. This in itself limits the number of companies available ... via Equiserve, that number is 13. I'll use 4 of them for my example:

Name | TICK.|$Init |$Setup|$Auto.|$Sale.|$In |$Out.|$IRA |$Reinvest max / %
Altria | MO |$500 | $20 |$1 | 20 |$.03 | $12 |$45 |$3./.5%
ExxonMobil | XOM |$250 | $0 |$0 | 15 |$0 | $12 |$45 |$0./.0
Wal-Mart | WMT |$250 | $20 |$1 | 20 |$.10 | $1 |$45 |$4./.n/a
Ford.Motor | F |$1000 | $13 |$1 | 15 |$.03 | $12 |$35 |$5./.5%

Hope that turns out somewhat legible.

You pay $53 in account setups. $170 per YEAR in IRA maintenance fees. In addition to the outlined trading AND DRIP costs.

If I were to invest through the Roth at Fidelity, there is just a $19.95 trade fee (in and out) ... and the dividend reinvestment service does not have a trading fee associated with it. Also, Fidelity takes care of all cost-basis tax information, though in a Roth I suppose it wouldn't really be relevant.

Has anyone here number crunched the long term affects of this decision? I get about this far before my mind goes numb. It's hard to compute with the dividend rates, reinvestment fees, as well as the fact that I'll be putting in some monthly amount ($333/mo for Roth).

-Blieb

EDIT:

Perhaps Sharebuilder is the solution? Positive vs negative?

guess the graph didn't look so hot ...

Are you sure about those IRA fees? I don't see any disclosure of those on equiserve. If that is an annual fee, that would kill the deal. Also, the plans you mentioned vary greatly in their fees. I'd consider owning some of those in direct investment plans and others through a broker depending on their fees.

BTW - Your thread is likely to get killed because of the individual stocks mentioned. You might want to edit it so it is a bit more theoretical.

When you're on equiserve ... you have to view the IRA account setup form. When you look there, it discloses the "annual maintenance fee" ...

Altria's Roth Disclosure -> if you click on "Enrollment Form & Instructions" you will see the fee disclosed.

I hope this doesn't get killed because of the individual stocks. I'll put a disclaimer just in case ...

Did you check out sharebuilder.com?

Fees kill it. I own stock through about twenty-five direct investment plans, but for IRA's, looks like you'd be better off owning the shares through a broker.

I read on another FW thread (forgive me for not finding again and linking) that their system was difficult to use.

Also, to get the Free IRA and Tax tools, you have to pay $20/month ($240/yr). That actually looks kind of good considering you get 20 trades with that, and there is no DRIP fee.

I wonder what the estimated cost average difference would be purchasing monthly vs quarterly vs bi-annually.

Does anyone here use sharebuilder? I'm trying to keep things as nice and orderly as possible. I like Fidelity for fund purchases, but mabye for individual stocks while building gerth I should use Sharebuilder, then eventually transfer the custodial to Fidelity down the road.

----------------

Does sharebuilder have a limited pool of stocks you can purchase through them? Since it appears they pool and all. Is there a list of the 4k?

"ShareBuilder offers an extensive selection of more than 4,000 stocks, close-ended bond and exchanged-traded funds."

------

Looks like BuyAndHold.com has about 3600:
http://www.buyandhold.com/StockMgr?request=rstks.showOfferedSymbols

I mean, if we're talking about putting in $333/month ... $20 fee is ~6% of monthly deposit.

Decisions decisions.

That sure sounds like a whole lot of fees. For like $10/trade you can just keep buying shares at your favorite discount broker. It probably makes sense to buy a little less frequently than once a month to keep costs down, but even buying every month looks cheaper than this <img src="i/expressions/face-icon-small-disgusted.gif" border=0>.

I think the answer for Roth IRA and account building is the Sharebuilder.com Standard plan.

You get 6 free trades (not real time) ... and additional trades are $2. I was thinking about doing the $20/month program, solely for the gains tracker, but in a RothIRA you really don't need to track the gains for tax purposes.


Blieb said: [Q]Also, to get the Free IRA and Tax tools, you have to pay $20/month ($240/yr).Hmmm....

I think Sharebuilder is a rip-off. Why not just open an IRA at any old discount broker and throw your cash in there every month? What exactly are you trying to do with all this complicated DRIP/Sharebuilder stuff?

dcwilbur said: [Q]Blieb said: [Q]Also, to get the Free IRA and Tax tools, you have to pay $20/month ($240/yr).Hmmm....

I think Sharebuilder is a rip-off. Why not just open an IRA at any old discount broker and throw your cash in there every month? What exactly are you trying to do with all this complicated DRIP/Sharebuilder stuff?

Wellllll. My Roth IRA with Fidelity has 2 mutual funds in it and 1 stock. I usually dump a lump sum into the account towards the end of the year, or as close to April 15 as possible.

However, with the new 4k limit for 2005, I realized I should make my deposits more regular to keep on track. I'd also like to get into dividend-rich stocks, and was thinking direct investment would be best. I picked a few out, and decided that I'd put around $300/month via Equiserve or some such intermediary. But then I thought, on top of the $333 for Roth-IRA, that's $633/month, which I really don't have to put into less-liquid investments.

So I'll setup a Sharebuilder Roth-IRA and do share-building and DRIP, because I'm only putting in a little every month. So basically I was looking for ways to fund my Roth-IRA and not have to save up to make big purchases. I suppose this way I have 2 Roth-IRA's, but that's not the end all.

EDIT:

I turn 25 this month. And my obsession with doing the investments through the Roth is for the long term tax benefits of having started early and hopefully reaping big-ole rewards down the line.

dcwilbur said: [Q]Fees kill it. I own stock through about twenty-five direct investment plans, but for IRA's, looks like you'd be better off owning the shares through a broker.

Same here, I have a bunch of DRIPS setup for my kids, all no fee ones. You don't need to go through Sharebuilder to do it, go directly to the companies that allow direct ones (there's a lot of them).

The fees you have described outweigh any benefits of dollar cost averaging. Why not buy into a mutual fund that focuses on dividend paying stocks? Better yet, why not focus on an index fund with very low expense ratio. Longer term you will be better served.

Good luck.

shoppindiva said: [Q]Same here, I have a bunch of DRIPS setup for my kids, all no fee ones. You don't need to go through Sharebuilder to do it, go directly to the companies that allow direct ones (there's a lot of them).

3 words ... "Stock Transfer Agent"

They charge fees.

I scanned your post. If this is done in a Roth there should be no problems. Many brokers offer div. reinvestment on equities for free, I believe equiserve charges like $3 every time, if you don't hold a lot of stock this doesn't make sense. Then again if you do hold a lot of stock you are rich and it still doesn't make any sense. It is an accounting, record keeping and tax nightmare outside an IRA. You'll quickly multiple any 'gains' in costs associated with professional help. Personally I don't see the point.

Speaking of 'sharebuilder', I find it to be a rip-off. If you are a low net worth investor try scottrade, but you probably should stick to quality mutual funds rather than taking on all the risk of individual securities. I've yet to think of a situation these drip's make sense, especially when they charge what they do.



Blieb said: [Q]shoppindiva said: [Q]Same here, I have a bunch of DRIPS setup for my kids, all no fee ones. You don't need to go through Sharebuilder to do it, go directly to the companies that allow direct ones (there's a lot of them).

3 words ... "Stock Transfer Agent"

They charge fees.

Since I'm not selling and there are no purchase fees, luckily for me this is a non issue <img src="i/expressions/face-icon-small-wink.gif" border=0>

Blieb said: [Q]3 words ... "Stock Transfer Agent"

They charge fees.Bad information. Most DRIPS are actually managed by transfer agents rather than the companies themselves, but there are still many plans that cover virtually ALL costs. Go to netstockdirect.com and search for plans with no purchase fees.

EDIT: Forgot that we were talking about IRA's. None of the plans I own are structured as such.

Needless complication can decrease your lifespan.

I'd simply suggest setting up a Vanguard.com account to invest in some index bond/equity funds or Fidelity(which has higher minimums) like you've already done.

Only drip I see that's really worth it is Exxon/Mobil as there are no transaction fees. Sharebuilder does have benefits as you can buy fractional shares and do dividend reinvestment without incurring a comission. Freetrade doesn't allow for fractional share purchases.

modal said: [Q]Only drip I see that's really worth it is Exxon/Mobil as there are no transaction fees.http://www.netstockdirect.com

Click on "Quick Search - No Purchase Fees"

Your search: "Plans With No Purchase Fees" Yielded 161 Results

Footnote: Netstock is a good place to research DRIPS, but note that they are a unit of Sharebuilder. Why would you pay Sharebuilder a commission to purchase shares that you can purchase directly from a company at no cost? Crazy. Sharebuilder touts themselves as a great option for investing on a small scale, yet they charge outrageous commissions (on a percentage basis) for those transactions. If you put in $100 a month across four stocks in their "basic" plan, you will pay almost $200 a year in transaction costs on a $1,200 investment!

I'm diong a rollover of my existing 401(k) into either an IRA or Stock. If *your* goal is to buy into a good (individual) stock, or roll your IRA/401(k) into a good investment stock, consider Bank of New York's low, low fee on General Electric stock. That is one of the last companies you could expect to earn less than 8-10% return each year. Plus, they have excellent dividends! I'd saw it's a good bet, or perhaps anything but a bet, by putting your money into them.

cannot for the life of me find out if sharebuilder does SEP IRAs, yes I searched sharebuilder & google
anyone know or have a link ?
Heres a link to the sharebuilder IRA FAQ. doesnt say if they do SEP, guess not.
Text

Im going with Firstrade, free drips, no fees, $6.95 for market limit orders. Also, they do SEP IRAs & unlike sharebuilder, they dont charge any fees for IRAs. Very flexible. Anyone else have any experiences, opinions about Firstrade ?


Firstrade Broker Comparo
Why Firstrade

Blieb said: [Q]shoppindiva said: [Q]Same here, I have a bunch of DRIPS setup for my kids, all no fee ones. You don't need to go through Sharebuilder to do it, go directly to the companies that allow direct ones (there's a lot of them).

3 words ... "Stock Transfer Agent"

They charge fees.

3 more words......"You are wrong"

I own several stocks (Wal-Mart, XOM, etc.) that I purchased directly through Equiserve.com and I pay no fees.

<< 3 more words......"You are wrong" >>

I like this response.

VikeFan84 said: [Q]Blieb said: [Q]shoppindiva said: [Q]Same here, I have a bunch of DRIPS setup for my kids, all no fee ones. You don't need to go through Sharebuilder to do it, go directly to the companies that allow direct ones (there's a lot of them).

3 words ... "Stock Transfer Agent"

They charge fees.

3 more words......"You are wrong"

I own several stocks (Wal-Mart, XOM, etc.) that I purchased directly through Equiserve.com and I pay no fees.

Companies that participate in DRIPs or DSPP through various plan administrators or transfer agents have different fee structures so while one company may not charge dividend investment fees, others do; same for purchasing shares etc. If you want to invest in the company using this vehicle then check the stock's administrative plan for the applicable fees if any since they are not associated all-in-one with the transfer agents (Mellon, Ameristock etc.) but with the various companies' arrangements with them (ie. some companies pay these fees; others do not).
Regarding the original topics, there are many factors to consider in selecting the appropriate vehicle. Among them, cost is an important factor so it depends on which stocks are involved re: point made in paragraph above. Others include the amount of investment since fee is waived for accounts above certain limits at various brokerages, how discipline you can be in reinvesting the proceeds yourself to save cost if this is applicable etc. Lastly, for myself, what I plan to do with the DRIP stocks that unfortunately have a sales fee to the transfer agent is to request certificates when the time comes to liquidate, deposit the certificates into my discount brokerage account and sell the shares without paying commission.

VikeFan84 said: [Q]Blieb said: [Q]shoppindiva said: [Q]Same here, I have a bunch of DRIPS setup for my kids, all no fee ones. You don't need to go through Sharebuilder to do it, go directly to the companies that allow direct ones (there's a lot of them).

3 words ... "Stock Transfer Agent"

They charge fees.

3 more words......"You are wrong"

I own several stocks (Wal-Mart, XOM, etc.) that I purchased directly through Equiserve.com and I pay no fees.

I'm not sure where you getoff saying something like that ... there ARE fees, it's undisputable. So I have 3 more back: "full of ****!"

https://gateway.equiserve.com/igwweb/content/secure/investmentplans/index_plans_new.asp?PurchOption=NSNewEnrl&IssueId=06973&plnpage=PlanInfo

Initial Setup Fee: (One-time new account setup fee) $20.00

Automatic Investment Fee:
(Fee for each ongoing automatic investment)
$1.00

Optional Cash Purchase Fee:
(Charge for purchase of stock)
$5.00

Dividend Reinvestment Fee: Company Paid

Sales
Sale Fee:
(Sale of shares through plan)
$20.00



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