Many companies pay out dividends to their stockholders. If you own stock in a company that pays dividends, you can receive those dividends as cash, or you can choose to have those dividends reinvested. That is, you can use those payments to buy more company stock. The potential benefit of this approach is clear when you... Andrea Coombes is a writer at NerdWallet.

Topics:  personal finance   
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  • Dividend Reinvestment Plans (DRIPs)
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