by A. Luminium

Created on: May 10, 2008   Last Updated: November 07, 2008

Recycling aluminum cans and scrap metal is a great way to earn extra cash to invest. Putting these earnings in a dividend reinvestment plan (DRIP) is an easy way to invest them. DRIPs are also a great way to teach children about investing. Recycling is a great way to teach them about frugality, and they can watch their earnings grow in a DRIP.

Aluminum cans are the easiest to recycle, as there is a large, well-established market for them. As of 2008, aluminum cans were bringing about two cents each, or about 25 cents per dozen, or about a dollar for the cans from two 24 count cases of soda or beer.

There is also a good market for used copper pipe, brass, wire, electric motors, as well as scrap aluminum siding and rain gutters. Be prepared to show identification as the high price for copper has encouraged thefts from construction sites. You may also be asked to sign a statement verifying that you own the materials you are selling.

Call around to get the best prices on the items you have to sell. Your nearest recycling center may be your best bet, but you might make more money at a more-distant scrap metal salvage yard. It just depends on the prices offered, the amount of material you have to recycle and your transportation cost.

While you are accumulating money to invest, park these earnings in a savings account. A great option is an easy-to-manage online savings program, like ING Direct, where you can open a small account with no minimum and no fees and begin earning interest immediately. If you are investing for several children, you can easily open several small accounts.

For investing small amounts, look for a DRIP program with small minimums and no fees. For children, pick stable companies with a good history of earnings. It also helps if the companies make products to which children can relate. The Moneypaper's web site, DirectInvesting.com suggests the following companies as a starter portfolio for children:
3M (MMM), Coca-Cola (KO), Colgate-Palmolive (CL), Johnson & Johnson (JNJ), and Union-Pacific (UNP). Another excellent company for kids is Kellogg's (K), but it does have a $25 minimum.

You will need to acquire the first share of stock before you can open the dividend reinvestment program. You can do this through Moneypaper. Once you have the first share, you can enroll in the DRIP and have your dividends reinvested in fractional shares. You can also purchase additional shares as you have funds available.

Not only will you be able to teach your children about saving and investing, but as you continue to recycle cans and junk, watching those pennies turn into dollars of real wealth, you'll have the satisfaction of knowing you rescued what could have been trash and turned it into treasure.

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