Keep Those Records
One of the things almost everyone hates is to keep detailed records and a good filing system. When you decide to invest through DRIPs and DSPs, it’s crucial that you develop good recordkeeping habits.
You must track each of your small monthly investments and dividend reinvestments. These small amounts will add up to be the cost basis of your investment. If you can’t prove how much you paid to buy the stock, you could end up paying more in capital gains taxes than you should when you sell the stock.
Don’t throw away transaction paperwork or year-end statements. You’ll need those when it comes time to sell ...