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Until I began reading Seeking Alpha, I never knew there was such a voracious debate on the merits of investing in stocks that pay dividends. Yes, there are people who actually call those who invest in these stocks "dividend zealots."

Honestly, I'm not sure whether "dividend zealots" view the term as derogatory or wear it as a badge of pride. I guess it's kind of like calling someone a "gold bug." Sometimes it's an insult. Sometimes it's not.

But even if you hate dividends, can't stand those annoying distributions, and it makes you totally nauseous to even consider a stock with a yield other than "N/A," think about setting up a few direct investment programs. It's a good add-on to a growth portfolio (or any portfolio in my view) - especially if you have many years left to retirement.

These programs allow you to buy small amounts of stock directly from companies, in many cases with no fees. You can buy as little as $50 worth per month, directly debited from your bank account. Yes, those dividends you hate will be reinvested via a DRIP (dividend reinvestment program), but you won't notice it - not in your main brokerage account anyway.

Starting with $50 per month

How much can you make investing tiny amounts of money each month in a stock? That depends on the stock, of course, but it's surprising how fast it can add up.

Here's a chart showing how you would have done investing in Procter & Gamble (NYSE:PG) in a DRIP over the last 20 years. I assumed an initial investment of $500 and additional investments of $50 monthly, raising that by $10 per month each year.

Of course you could have invested in an especially nasty stock, say Citigroup (C)

Yes, that's horrific, but while PG can keep growing, the worst that ca happen to C is that it goes to zero.

On the other hand, McDonald's (NYSE:MCD) would have done even better than Procter & Gamble. You'd be closing in on $150,000 now.

Decisions, decisions: Investing by default

Let me be clear. I am not suggesting that you make any changes to your current investment style, but that you add a DRIP or even a few. Consider it an expense, not an investment - an expense you may hardly notice. Fifty dollars? Some of you are probably, pardon the expression, pissing it away on stuff you don't even need.

If you are a younger investor, I realize that $50 may be hard to come by each month. And a better use for that $50 could be to repay high-interest debts, like credit card balances and student loans. But once those are paid off, consider a DRIP in addition to contributing to your IRA or 401(k).

One reason is the psychology of default choices. It influences us all whether you realize it or not. You may not make the decision to invest in MCD (assuming that's a stock you might want) each month in your main brokerage account, but if it's being done by default automatically via your checking account, you're more likely to keep the DRIP faucet on rather than turn it off.

But I want to invest in (something else) instead!

I know, I know. There are only a few companies offering no-fee DRIP programs, and you may want to invest in some other stock. Well that's too bad, because if you want to invest a small sum automatically each month in a specific stock at little to no cost, you're limited to those companies. Sure, it would be great if Apple (NASDAQ:AAPL) had a direct investment program, but they don't - so get over it.

(Which companies offer these programs? I'm not an expert in that area, but Seeking Alpha contributor David Fish's Moneypaper site might be a place to start.)

If you're young and want to invest in stocks like AAPL, I say go for it! But consider opening a few direct investment accounts, too. The wealth can add up.

Here's a chart for Procter & Gamble like the one above, except going back 30 years instead of 20. As a comparison, the dashed line shows what the results would be like if you'd bought 6-month CDs instead.

Is that $400,000 in PG stock enough to retire? Probably not. But remember, I'm suggesting this in addition to your regular retirement planning, not instead of. Viewed in those terms, that's a "bonus" half million dollars.

Even better, why not consider funding a DRIP-style program like this for a child or grandchild?

Lump sum vs. ongoing investments

Was the rate of return better on PG over 30 years better than a $10,000 lump sum investment back in 1982? Maybe. To really compare the two approaches, you'd have to discount the present value of the $10,000 back then vs. the present value of the stream of small investments you made over time.

That makes my brain hurt. And it's irrelevant anyway unless you had the $10,000 to invest back then. If you didn't, then it doesn't really matter all that much does it?

Ultimately, the power of this approach isn't just the stocks you select. Sure it helps to pick winners and avoid losers like Citigroup, but putting small amounts of money to work each month automatically with no fees is a great way to build wealth - even if you hate those &@#* dividends.

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Both sides doth protesting too much?

Finally, if you're not sure whether you should invest in dividend stocks or not - and this constant commotion between "dividend zealots" and their detractors leaves you confused - consider this.

Author Robert Pirsig once observed that people aren't "dedicated" to something they have complete confidence in. For example, you won't hear many people shouting claims that the sun is going to rise tomorrow. Why waste time pontificating on something that's obviously true?

But when people do become "dedicated" to a belief, and the war of words becomes strong, that's a sure sign that those who are yelling and screaming the loudest are the ones who actually have their own doubts, whether they realize it or not.

Think about it. And if you have a long investment time horizon, think about starting a DRIP - even if you hate dividends (and especially if you like them).

Source: Can't Stand Dividends? Set Up A DRIP Anyway