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Letting Dividends Do Their Work

Adventures in DRIPping - ReInvestment ReInstatement

Robert D. Gibb

For several years Canadian MoneySaver Magazine has had an association with US based MoneyPaper Magazine that allowed subscribers to access and receive half-priced commissions purchasing over 1000 US DRIP offering companies. Several people noticed that usernames and passwords no longer worked at MoneyPaper or DirectInvesting.

On contacting management it was learned that this association had been terminated. The reasoning was that it was inappropriate to offer services to non-subscribing Canadians for free while US MoneyPaper subscribers were paying membership fees. While that certainly makes sense it was pointed out to MoneyPaper's management that this could well be the absolute worst time to suspend this relationship. With the Canadian dollar so high many Canadians are looking to buy US securities through DRIPs.

Fortunately a way was found around this difficulty. Not long ago MoneyPaper introduced something they named the DRIP Club. Basically, for an increased fee, the DRIP Club allows groups to purchase a membership. Members of the group then receive individual user names and passwords allowing access to most features at This includes the $25US commissions and the biweekly $15US specials. Using a Canadian broker to start a US DRIP would cost $85US or more. Purchasing a DRIP company through a Canadian discount broker requires the purchaser to complete the registration. Unlike in Canada in almost all situations the $25 commission at DirectInvesting includes the DRIP registration process.

Here are the details from MoneyPaper:

Group DRIP Club Membership

What Is Group DRIP Club Membership?

Group DRIP Club Membership is a lower-cost, simplified way for each of the members of your investment club or group to become involved in DRIPs. Group DRIP Club Membership provides each member of your group with all the tools they need to invest without a broker: access to information on over 1,000 DRIPs and the opportunity to enroll in these DRIPs at the lowest possible cost. All of the DRIPs in the enclosed The Moneypaper's Guide to Direct Investment Plans that are marked with asterisks (*) are available through the Temper of the Times Enrollment Service.

What ISN'T Group DRIP Club Membership?

Group DRIP Club Membership does NOT mean that the members of your group have to pool their resources to invest'each person can invest on his/her own. As a group, they will only split the Group DRIP Club Membership fee'they are under no obligation to invest together (although they can do so if they choose).

What are the benefits of Group DRIP Club Membership?

Each person in the group can:

Canadian MoneySaver Magazine has taken out a group membership. Individual subscribers are once again eligible to register and purchase. To register again you need to send the following information to MoneyPaper.

First Name
Last Name
E-Mail Address (to get the $15 specials)
Canadian MoneySaver Subscriber Number

This can be mailed, faxed or e-mailed to:

MoneyPaper, Inc.
555 Theodore Fremd Avenue
Rye, NY, 10580

Fax: 914-921-9321 (I'm not sure how you'd do a signature via e-mail though.)

A Few Tips

There is always confusion over the various names: MoneyPaper, Temper of the Times and DirectInvesting. MoneyPaper is the magazine. Temper of the Times is the broker. Even though they are deeply connected they must operate at arms length to avoid conflict of interest situations. Sometimes when you phone one they act as if they don't know who the other is. It's a legal requirement for them. DirectInvesting is a web presence that more clearly indicates what Temper of the Times does. A company so nice they named it three different times.

Temper pools money from subscribers and purchases once a month. Once the purchase is made MoneyPaper is no longer involved in the process. Any delays are likely the fault of the purchased company's Transfer Agent. With low commissions MoneyPaper and DirectInvesting are not big on customer service. Long wait times for responses to e-mail inquiries are common. Patience when purchasing through DirectInvesting is a must.

Canadians cannot purchase online from DirectInvesting. Print off any purchases orders and mail them to the address shown above. Make sure you use a 'par-crossing' US dollar cheque. Par-crossing cheques are Canadian cheques with US transfer codes so they can be processed at their US based branches. BMO $US cheques are par-crossing by default now it appears. If you're not sure ask at your bank. Expect the teller to have to call head office to ask about par-crossing as it is a rare request.

Temper asks for a 10% cushion when you make an order in the event the share price rises by the time the purchase is made. The cushion is refundable. Any amount over $1.00 is refundable. My past practice has been to send at least a 20% cushion to cover share price increases great than 10%. Ever the Scotsman it also ensures I get amounts that would have been under $1.00 refunded as well.

Call to Action Update

I received a copy of an e-mail sent by Investor Relations at TD Bank in response to a request that a stock purchase plan (SPP) be added to TD's DRIP. The response indicated that TD had previously had an SPP but it had been cancelled from lack of participation. This is not surprising as during that period very few investors knew what a DRIP with SPP was. Now with so many writers discovering DRIPs the public is better informed. Here are the results of a poll I've been running:

Poll Question:

TD informed us they used to have an SPP as part of their DRIP but cancelled it because no one used it. That was before there were so many of us writing about DRIPs. Before very few knew about DRIPs + SPPs. Times have changed and the word is out. If TD added an SPP to their DRIP would you purchase this PLAN if similar to the other banks?

Response # Votes % of Total



I'm asking all those interested in improving the access to DRIPs in Canada to write to the boards of both TD Bank and RBC to request they add a stock purchase plan feature to their existing DRIPs.

TD Investor Relations
TD Tower, 15th Floor
66 Wellington Street West
Toronto, ON M5K 1A2

Investor Relations
Royal Bank of Canada
200 Bay St
14th Floor, South Tower
Toronto, ON M5J 2J5

Robert Gibb, 401-2910 Cook Street, Victoria, BC, V8T 3S7 (250) 383-7075 Robert Gibb is a retired school teacher. He gives seminars on dividend reinvestment plans. Mr. Gibb is a frequent contributor to Internet DRIP boards under the nickname OperaBob.

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