Are you familiar with Computershare? I learned about the marvels of Computershare in my mid-thirties and I must admit that I wish I had learned about it in my early twenties. I learned about the existence of transfer agents when I read The Lazy Investor book about dividend investing but I must admit that the book is really teaching anyone about being a lazy investor by investing in long term stocks as opposed to mutual funds.
As a new investor in my 20’s, I was struggling with buying stocks since I did not have enough money to make it worthwhile to pay $29.99 in transactions (yup, that was the price back then). Instead I bought monthly income mutual funds as I did not know any better about the fees or about index investing which I also learned much later on in life. If I had known about Computershare, I could have started investing in dividend paying stocks early on as I was already familiar with the dividend concepts as income.
If you feel that you struggle buying your first stock or that you need a lot of money to get started then you need to read through and learn about transfer agents.
Computershare is the best medium to follow in the footstep of Grace Goner who turned 3 shares of Abbot Laboratories purchased in 1935 for $185 into a $7 million fortune 75 years later. Patience and compound growth is all she needed.
Computershare was funded in 1978 and hails from Australia. It’s now present in 20 countries and provide investors and employees with a stock investing service for many companies. As a Canadian, there are many good companies to invest in and the same applies to U.S. investors. Below is a short list of companies available with many more on their website. So far, my experience is strictly with buying Canadian companies and I am very satisfied so far. I’d love to hear the experience from anyone else.
Below are example of companies available through Computershare. As a note, there are other transfer agents such as CST Trust Company or Valliant Trust.
Example of Canadian Companies
- TSE:BNS : Bank of Nova Scotia
- TSE:BMO : Bank of Montreal
- TSE:TRP : TransCanada Corporation
- TSE:T : Telus
Example of U.S. Companies
There are many more blue chip stocks available through Computershare and the other transfer agents. I strongly recommend you pick strong dividend growth stocks in order to let them work for you. When you put fractional shares, dividend re-investment and dividend growth together, you get strong results over time.
My Computershare Journey
Slow and steady work and I wanted to show you how my Computershare account grew in the early years. Below is how I grew 5 stocks in my Computershare account. The growth you see in the graph represents my contributions varying between $50 and $600. Slowly and surely it will grow. This strategy is not a stock or price picking strategy, it heavily relies on dollar cost averaging and dividend compound growth through fractional shares.
The one dip in early 2012 represents shares I transferred to my kids for 3 different companies. As I mentioned, I wish I had found this way of investing in companies earlier so I am getting my kids going very early on. By the time they reach their 20’s, I hope they can see the value in slowly adding to a dividend income portfolio.
Related: How to transfer shares to your kids
5 Years Later
After many years of adding small amounts to Computershare, I grew many accounts into the thousands. Over the years, between my Computershare and my discount broker account, I was holding some of the same stocks and decided to consolidate. When consolidating inside my discount broker I lost the ability to invest fractional shares but at this point I have more money to actually buy full share anyways. My kids are still at it and investing two times a year and with a small portfolio, they fractional shares work for them.
I also got wiser with regards to holding REITs in a non-registered account for tax purposes. The tax management for return of capital is too painful to do in a non-registered account.
I consider Computershare the only way to invest early with small amounts as well as being a great tool for teaching about investing. The earlier you start the more data you will have to show what compound growth is all about.
Readers: Are you investing using Computershare? What do you think?