Dividend Advantage #3: Stretch Every Dollar!

Here's a big benefit if you're looking to invest in stocks that pay dividends: the dividend reinvestment plan (or DRIP, for short).

In fact, many companies offer these DRIPs, which are simply dividends that get reinvested in the stock.  Investing in these is an excellent way to lower volatility through dollar-cost averaging.

Another way is to set up a Direct Stock Purchase Plan, or DSP, where you regularly buy stocks directly from the company instead of a broker. And you can do this with just a few dollars a week! Find out more here: How to Invest on Just $50 a Month.

So instead of spending your dividend, reinvest it through a DRIP and you'll increase your investment on a regular basis...without paying commissions!

Next: Dividend Advantage #4: Earn in Flat Markets