Dividend Reinvestment Plans (DRPs) | 5 Things You Should Know

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In this video I explain what Dividend Reinvestment Plans are and 5 key features about them. Do you use dividend reinvestments in any of your shares?
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Timetamps:
0:00 ntro
0:14 What are DRPs?
1:46 Save money on brokerage
2:45 Discounts from DRPs
3:20 Minimum holdings for DRPs
4:10 DRPs and Tax
5:04 Compounding wealth
6:12 What I do
7:10 Leave a question
7:25 Ben Felix’s video
7:50 Next video idea
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Other videos you might be interested in:
My video on Trading on CommSec: • CommSec Trading Tutori...
My video on ETFs in Australia (Vanguard, BetaShares, iShares, StateStreet): www.youtube.com/watch?v=9S5-f...
Nick Kendall’s (my friend’s) video on Buying shares on NAB Trade: www.youtube.com/watch?v=LVgp-...
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Disclaimer:
The information provided in this video is general in nature only and does not constitute personal financial advice. You should also consider seeking the advice of an investment advisor who holds an Australian financial services (AFS) licence or is a representative of an AFS licensee. Be sure to work with someone who understands your investment objectives and tolerance for risk. Your investment advisor should understand these products, be able to explain whether or how they fit with your objectives, and be willing to monitor your investment alongside you.
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Опубликовано:

24 июл 2024

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Комментарии : 65

@myeconomy9807 Год назад

Great video that is a must-watch for any savvy investor looking to maximize their returns! Dividend Reinvestment Plans (DRPs) are a fantastic way to grow your wealth over time. The 5 keys in this video give the inside scoop on the most important things you need to know about DRPs. Well done, thanks!

@marquiss1 3 года назад

No need to apologise regarding your hands...Own It my man👏

@SanjeeSen 3 года назад

Thanks House! :)

@mrscream2028 2 года назад

Thanks, Sanjee. I'm a new investor and just set up my first DRP. Your video helped me understand some of the ins and outs.

@YoHo18 3 года назад

Great Video Sanjee. One thing I never thought of is tax on DRP. It’s a bummer in AU. But hey still better.

@samellaramonhorsley 2 года назад

Extremely valuable information! Continue to use your hands, authenticity wins! I love how you get right to the point !

@SanjeeSen 2 года назад

Thank you! Will do!

@zippyzipster6863 2 года назад

Thanks Sanjee, your video is very insightful and informative.Yes, I just recently filed my tax return and I can confirm the ATO does treat DRIP as a normal dividend income.🙏🏽👍

@asalex3615 2 года назад

Great video answered a lot of my questions regarding dividends not being enough to buy shares and whether reinvesting them voids tax until sold. Hand gestures are great didn't notice until you mentioned it, people learn to use their hands whilst talking, you shouldn't try and suppress it

@kugeorge4412 3 года назад

It is really a knowledgeable information sharing. Thanks!

@SanjeeSen 3 года назад

Hi Ku, thanks so much for watching. Glad you found it useful.

@onlycec 2 года назад

the first video that explains how to compound

@TheTravellingKat 3 года назад

very helpful! thanks for the video! :)

@SanjeeSen 3 года назад

You're welcome Kat!

@willyOAM 3 года назад

You're a legend mate! Keep it u!

@SanjeeSen 3 года назад

Thanks so much!

@peterm6906 2 года назад

Don’t feel guilty about the hand movements! It adds energy to your content

@SanjeeSen 2 года назад

Thanks Peter - I've kept it going haha

@mitchellb2888 2 года назад

Definitely agree. Keep it going mate 👌

@amantamang7559 Год назад

Great video. Just a question How do you report reinvested dividends in mytax ? Could you do a video on the steps?

@NickKendall 3 года назад

Brilliant video Sanjee! I think I should probably use DRPs more. I tend to just add the cash dividends I get to my larger cash pool that I use to buy more shares which also works I think, but automating it does sound really attractive. Also, I don’t think its a problem you talk with your hands haha; better to be too expressive than not expressive enough (my problem I think haha)

@SanjeeSen 3 года назад

Thanks Nick! Yeah one key advantage is definitely automating it...especially when I'm earning quite low amounts in terms of monetary value...might as well just let it automatically put it back into buying more shares. Thanks for that regarding the hands haha - I've had a few people mention that so maybe I'll let them run free hehe

@shady_mixes 3 года назад

Great video mate, I just rang comsec this morn to find out about distribution reinvestment settings with a few of the ETFs i bought, of which they said i needed to call computer share to activate. However I was hesitant to as I had the exact questions you answered in this video lol

@SanjeeSen 3 года назад

No worries Wade, glad it helped. Yes unfortunately the hold "how to setup your shares after you've bought them" isn't really well communicated by our brokers. Computershare is one...the other is Link market services you might have to use linkmarketservices.com.au. Also checkout this video my friend Nick did on how to setup the DRP on Computershare: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-8ZNjBbIgkaY.html

@shady_mixes 3 года назад

@@SanjeeSen Awesome! thanks so much for the help man really appreciate it!

@keithpopowski291 Год назад

I’ve always been resisting DRPs due to the extra accounting, all those small entries are a bit off putting.

@Sir.Barson Год назад

well said

@SanjeeSen Год назад

Thanks Valentine!

@evanashikkar951 Год назад

great content

@SanjeeSen Год назад

Thanks Eva

@maxvalentinevandijk3686 Год назад

Thanks! How do you reinvest your dividends from VOO in Australia? Much appreciated

@EthanRooshock 3 года назад

Really well explained! They definitely have their place. One of the downsides is keeping track of all the different prices from a Capital Gains perspective. I suppose it's like any investment though, keeping your records!

@SanjeeSen 3 года назад

Thanks Ethan! Yes tracking for CG is going to be tricky for the longterm. I always try and download the records from Computershare and Link.

@terrelllayne2050 2 года назад

you all probably dont care but does anyone know of a trick to get back into an Instagram account? I somehow forgot my login password. I would love any assistance you can offer me!

@joaquinmoreno3862 2 года назад

Hello I would like to star doing this, what are the apps where I can began!! Don’t know where to start. Great info

@UnitGFC 3 года назад

great video but an additional thing that would be very useful would be to explain how to turn DRP on. The steps required to enable it.

@SanjeeSen 3 года назад

Thanks UnitGFC, yes that's a good point. I'll have to do that in a future video. In the meantime feel free to check out my friends video on it: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-8ZNjBbIgkaY.html

@Rosielovesmusic Год назад

Thank you for the valuable information, Sanjee Sen. Currently, I have been getting paid dividends into my account but then investing a fixed amount each month back into the ETFs I have in Commbank Pocket app. Is this still classified as compounding or is this best achieved through set up of DRP so dividends are automatically reinvested?

@StingerNSW 18 дней назад

Hope you get this message, when will you be doing new videos?

@mallikakhare6338 3 года назад

This was helpful.. thank you.. would you recommend DRP for ETFs?

@SanjeeSen 3 года назад

Hi Mallika, I think it really depends on what you're trying to achieve. But generally if people are trying to building wealth through compounded gains then one way is to have DRPs on. If you're looking for a source of income then one way is to leave DRPs OFF and just take the cash payments.

@aimeepotie9644 3 года назад

Hello I have a question involving holdings in computershare. I have brought stocks in three different companies and only one company is showing up in my holdings on computershare. I am confused as to where the other two are. Do they not pop up in computershare?

@mathushahs2724 3 года назад

Love your content! Do VAS have DRP plan? How many shares do we need to buy under the Vanguard Personal Investor account before we get DRP?

@SanjeeSen 3 года назад

Hi Mathushah - glad you like the content. Yes VAS has a DRP plan. I believe you only need 1 share for DRP. But best to check the documentation here: www2.asx.com.au/markets/trade-our-cash-market/announcements.vas

@gamaigia9270 6 месяцев назад

When you sell all your shares that have DRPs compounded for 10 or 20 years, how do you work out the CGT ?

@premchand828 3 года назад

Does DRP have the option of cashing out the dividend or reinvesting it as we wish?

@jercle 3 года назад

Hey mate enjoying your videos! What are your thoughts on AFIC's DSSP?

@SanjeeSen 3 года назад

Hi Jercle - my short answer is I don't fully understand it haha! So i've avoided it for now. But I'm planning to discuss it with my tax accountant later this year and make a decision on it then. It seems like a way to defer your tax payments...but I'm genuinely not sure. So for now I'm sticking with the normal DRP.

@naingwin1212 3 года назад

I like that DSSP not affecting by current income, when you intend to sell or live on dividends after retirement.

@liamlindell4176 3 года назад

Hey mate was wondering how franking credits play into DRP?

@SanjeeSen 3 года назад

Hi Liam, DRPs are treated the same as normal dividends so the franking credits are the same too. So even though the DRPs don't hit your bank account you have to assume you've earnt the money and treat it like that - so the franking credits will apply as usual. Here are a couple of articles for more info (and as usual best to speak to a tax accountant too) community.ato.gov.au/t5/TaxTime/Dividend-Reinvestment-Plan-DRP-MyTax/td-p/87449 www.ato.gov.au/general/capital-gains-tax/shares,-units-and-similar-investments/dividend-reinvestment-plans/

@paulclark2410 3 года назад

Thanks. I was wondering what happens to dividends that don't cover the cost of a single share.

@SanjeeSen 2 года назад

Hi Paul, it gets held in an non-interest account until you have enough for them to issue 1 or more shares.

@NAGHAVENDRA 2 года назад

Thanks mate, jus wanna know about the tax implications when you give the shares to charity or any religious institutions

@SanjeeSen 2 года назад

Hi Vardhan, I’m not sure about this. Best to speak to an accountant about this.

@nisaryawari 3 года назад

I had fully participation with Betashare ASIA & just received some dividend but I have not get any new shares. how long it will take to pay you new share I am with Link. thanks

@tracyguo8734 3 года назад

Hi Sanjee, How can i turn on DRP through commsec app ?

@SanjeeSen 3 года назад

Hi Tracy, unfortunately you can't turn it on through the CommSec App - you'll have to go to the Share Registry to turn it on. You should check out my video here: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-lBZhMHY7RDA.html Which company are you looking to turn it on for?

@Rollyoursleeves 2 года назад

Is it for all company that should have to be 500 Shares to setup DRP?

@SanjeeSen 2 года назад

No, most companies don't have a minimum holding requirement. This is the first time I've seen it. But there could be other companies that have it. Best to check the DRP documentation for each company.

@Rollyoursleeves 2 года назад

@@SanjeeSen How to know if there is any minimum holding require or not. If can please mention some of IT.

@Lazynamingbox 3 года назад

I personally love your hand language. Listening and understanding trading relating videos can be boring and often lose interest halfway. I feel guilty whenever I see your hands moving and not paying attention. (you can tell I wasn't a really good student......)

@phillipmahon8842 2 года назад

Hope you didn’t have FMG drps the drp was $18 and the share price fell to $14 before the pay date

@SanjeeSen 2 года назад

Great call out Phillip - I actually just did a video looking at Ex-dividends and FMG. Yes its annoying when the share price is in a downward drop in the middle of when they're calculating the DRP price.