Comments on: Jonathan Clements’ Guide to Starting Small http://allfinancialmatters.com/2006/11/29/jonathan-clements-guide-to-starting-small/ A personal finance blog dedicated to discussing such topics as budgeting, asset allocation, 401K, IRA, cash flow, insurance, financial planning, portfolio management, and other areas in personal finance. Thu, 24 May 2012 12:43:16 +0000 hourly 1 http://wordpress.org/?v= By: Joe Shmolie http://allfinancialmatters.com/2006/11/29/jonathan-clements-guide-to-starting-small/comment-page-1/#comment-51080 Joe Shmolie Mon, 04 Dec 2006 13:22:42 +0000 http://allfinancialmatters.com/?p=1383#comment-51080 yo dog.. good job yo dog.. good job

]]> By: WearyTraveler http://allfinancialmatters.com/2006/11/29/jonathan-clements-guide-to-starting-small/comment-page-1/#comment-50093 WearyTraveler Wed, 29 Nov 2006 20:05:30 +0000 http://allfinancialmatters.com/?p=1383#comment-50093 Many times, rather than deal directly with individual investors, companies will have a third party handling the DRIP for them. One such third party is Equiserve. You can go to their website (http://www.equiserve.com/shs/index_shs.htm) and search find a company that you'd like to invest in. Many times, rather than deal directly with individual investors, companies will have a third party handling the DRIP for them. One such third party is Equiserve. You can go to their website (http://www.equiserve.com/shs/index_shs.htm) and search find a company that you’d like to invest in.

]]> By: WearyTraveler http://allfinancialmatters.com/2006/11/29/jonathan-clements-guide-to-starting-small/comment-page-1/#comment-50090 WearyTraveler Wed, 29 Nov 2006 19:38:56 +0000 http://allfinancialmatters.com/?p=1383#comment-50090 I started investing in DRPs a long time ago, before they realized that they could make money charging per transaction. I started buying $50 per month of Exxon then upped it to $100 per month. Same with several other blue chips that offered DRP and direct purchase. What needs to be remembered if the buyer is not funding and IRA (which some allow) is that this soon becomes a tax nightmare. I've got several hundred shares of Exxon, all bought in non whole share increments. If I decide to sell a portion, figuring out the basis is going to be a horror story. I have since moved all these shares to a regular brokerage account and they're over 2 years old (so there's no longer the short term / long term question). I've totaled all the purchases and dividend reinvestments, then divided by the number of whole shares that I transferred. This gives me the average basis in case I want to sell a few shares. I know it's not exact and the IRS might have issue, but that's as good as I can figure. The other option would be to sell all shares at one time and use the total basis (more in line with IRS rules). The DRP program is great, and often the only avenue for a new investor, but novice investors need to understand the administrative and tax implications going in. DRPs and Sharebuilder I started investing in DRPs a long time ago, before they realized that they could make money charging per transaction. I started buying $50 per month of Exxon then upped it to $100 per month. Same with several other blue chips that offered DRP and direct purchase. What needs to be remembered if the buyer is not funding and IRA (which some allow) is that this soon becomes a tax nightmare. I’ve got several hundred shares of Exxon, all bought in non whole share increments. If I decide to sell a portion, figuring out the basis is going to be a horror story. I have since moved all these shares to a regular brokerage account and they’re over 2 years old (so there’s no longer the short term / long term question). I’ve totaled all the purchases and dividend reinvestments, then divided by the number of whole shares that I transferred. This gives me the average basis in case I want to sell a few shares. I know it’s not exact and the IRS might have issue, but that’s as good as I can figure. The other option would be to sell all shares at one time and use the total basis (more in line with IRS rules).

The DRP program is great, and often the only avenue for a new investor, but novice investors need to understand the administrative and tax implications going in. DRPs and Sharebuilder

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