Although I majored in Finance in college, and took many investment courses, I didn't learn anything about dividend reinvestment plans (DRIPs) until I helped found an investment club. There, I discovered that by pooling my money with my friends (a self-made DRIP) , we could begin building our investing nest-eggs, a little at a time. 

And although I left that investment club some years ago when I moved across the country, the club is still going strong, now with a portfolio approaching half a million dollars - built step-by-step, with $25-$50 contributions from each member each month. 

DRIPS are one of the best-kept secrets on Wall Street. Many would-be investors are put off investing because they don't think they have enough money to begin. It's not their fault. Wall Street pros have created this mystical aura around investing, making small investors think that 1) investing is too complicated for the average person and 2) you must be rich to make money in the stock market. Neither assumption is at all true.  

We have already begun addressing the first myth in Financially Fit by discussing the most important ratios investors can utilize to analyze stocks. We've also talked about making sense out of annual reports and how to allocate your portfolios as you move through different stages of your life. And we will continue to help you break the science of investing down into manageable parts in the coming weeks and months. 

But today, I want to focus on the second myth and show you how DRIPs can make investing available even to the very smallest investors by eliminating many fees and commissions. Because with DRIPs, investors can start small, buying as little as one share of stock, at vastly reduced commissions - a very cheap way to start a portfolio. 

There are more than 1,500 DRIPs available for investing. Many are household names, including Coca-Cola, Domino's Pizza, Dell, Pep Boys, and Pepco. Created by companies seeking new investors, DRIPs allow investors to invest small amounts of money on a regular basis. The companies (or the DRIP administrator) , then pools those monies to buy whole shares of stock, splitting them into fractional shares for each investor based on the amount of money each person has contributed. Then, when the company pays its dividends, those monies are applied to purchase additional fractional shares of the company's stock. 

For example, you may decide to join Wendy's (WEN) DRIP. To enroll in their plan, you will need to purchase $250 of Wendy's shares, which you can purchase through the company. (Note: many DRIPs require a smaller initial purchase and many also require that you buy the first share through a broker (more about that later) . After that, you may send in as little as $25 for additional share purchases. The plan administrator will pool your funds with those of its other DRIP investors, and buy whole shares, then divide them up among the investors, according to how much money each person had sent in.  

Today, if you sent in $250, at the $59.35 per share price at which Wendy's shares are currently trading, you would be buying 4.2 shares of WEN (minus any fees you may incur in the purchase) . Then, when Wendy's pays its quarterly dividend, currently $0.17 per share, those 4.1 shares would accumulate another $0.714 (4.1 x $0.17) which would then be used to purchase .012 ($0.714/$59.35) of a share of Wendy's stock. 

Over time, if you sent in $25 per month to Wendy's DRIP, in five years (all things being equal, including the price of Wendy's shares) , you would have accumulated $1,500 ($25 x 60 months) and own 25.3 shares of Wendy's stock - if the company didn't pay dividends. But because it does, each of those shares is going to receive the quarterly dividend, which will then be used to purchase more shares, quickly building up your portfolio of Wendy's stock.  

And your account will continue to grow in two additional ways, as Wendy's shares - hopefully - appreciate, over time, and also as the company increases its dividend per share. 

It's that easy. And with more than 1,500 DRIPs currently in existence, there is no reason why you shouldn't begin building your investment portfolio right now. But first, you need to know a little bit more. 

DRIPs are not as liquid as buying and selling shares in the open market. That's right, just as you buy your shares through the DRIP plan, you must also sell them the same way. That means you can't call your broker up and sell them the same day; it might take a few days before they are sold. Consequently, DRIPs are tailor-made for the long-term investor, not the trader.  

Many companies, like Wendy's, that offer DRIPs also offer Direct Stock Purchase Plans (DSPs) . That means you can enroll in the plan through the company, not through a broker. If the company does not offer a DSP, the first share must be bought through a broker or another company that facilitates DRIP investing (more on this later) . Then, later purchases may be made through the company or DRIP administrator. 

You will pay a fee to buy shares. It is generally a very small one to set up the account and buy your first share. Now, if you buy through a broker, you will most likely have to purchase more than one share to enroll in the DRIP. If the company has a DSP, you can usually start with one share. 

However, you do want to make sure if there is a fee on additional shares purchased that it is reasonable for purchasing small numbers of shares. In other words, if the fee is $5 per transaction and you are only investing $50, that would be 10% of your total investment, too high. So watch out for those. 

Some companies even offer discounts on shares purchased through them. You will need to investigate this. 

To find out if the company in which you are interested has a DRIP or DSP, just log on to its web site, go to Investor Relations, and see if the plan is listed. If you don't see it, contact the Investor Relations department, via email or by telephone.

If the company in which you are interested has a DRIP but does not offer a DSP, you might consider using one of these web sites to help you get started: 

www.sharebuilder.com - This broker allows you to invest in more than 5,000 stocks and Exchange-Traded Funds by pooling investors' monies together. 

www.betterinvesting.org - This is the NAIC, the National Association of Investors, the folks who pioneered investment clubs. They offer a low cost monthly investment in dividend reinvestment plans of scores of companies.  

http://www.amstock.com/investpower/new_dp.asp -- This site facilitates the investment in several hundred DRIPs and DSPs. 

I'll leave you with two important points: 

1. Don't forget taxes - even though you don't get the dividends in your hands, you'll pay taxes on them.

2. Before making a decision to invest in a DRIP or DSP, make sure the company is a good investment. That means running it through the same tests and analysis you would any company in which you wanted to invest.

Times a' wastin' - with so many DRIPs available, anybody can become an investor. Don't delay your investment plan any longer.