Automatic Reinvestment Plan

Your mutual fund or other investment vehicle pays a dividend on the regular. What do you do with it?

Well, you could receive it in cash and go out there and spend it like a don. Or, you could set up automatic reinvestment, which just buys more shares of the mutual fund with the dividend proceeds you'd be distributed.

The bad news: You'll be taxed on those dividend distributions at the end of the year and have to pay cash taxes on them. The good news: The investment will compound at a much higher rate with those divvys reinvested. And in most fund complexes, there is no commission on those incremental purchases. Woot. ish.