Many believe investing in stock is for the rich. For others, their reason for not investing is lack of funds, experience, or time. You can secure your future by investing in stocks now. Life after retirement would be more interesting for you. No amount is small to invest in stocks. Below are ways you can become a stock investor with little money.
Stock exchange board: via; pexels.com
Few Tips on Investing in stocks
- Any amount is worth investing
- Get some basic education or training about the stock market.
- Find the right broker. Ask questions if there are challenges.
- Don’t try to save up thousands of dollars before investing. Start with the little you have.
So back to the question, how can one invest in stocks with little money or no experience? Below are steps to follow if you are in this category.
Open An Online Brokerage Account
Online brokerage is the best option when the amount you are bringing to the table is $500 or less. It has made investing in stocks much easier thus opening investment doors into the stock market for the everyday retail investor.
But before opening an account, check the terms and conditions of the broker. Some brokers require a minimum deposit of $500 while some require zero minimum balance.
Brokers that require minimum balance of $5 to $500
- Stash Investment – $5
Brokers that require $0 minimum balance
- Ally Investment
The list above shows there are endless possibilities to invest in the stock market. Conduct in-depth research on any broker of your choice before opening an account. One of the things to check for besides minimum balance requirement is the commission cost. Choose a broker with low commission cost to increase your return.
Invest In The Best Cheap Stocks
Everyone would like to choose Amazon’s stock that cost $800 per share. But if you have little money to invest, this will only prevent you from diversifying. As a beginner, look for cheap stocks that are worth buying instead.
You are looking at growing your investment gradually. So automation is a good option. It will help you cultivate the habit of saving money that you can use to invest later. Some brokerage accounts are such that you can set up an electronic transfer system where money leaves your bank account and goes into your brokerage account. It can be monthly or anytime you think is convenient for you. It is better than allowing the money to appreciate in your bank account as you might be tempted to spend it on things that are of little or no value.
Note: Try to save enough money in your brokerage account before thinking of investing. Using any money that comes in will cause you to incur more fees. Invest all at once after you have saved up a reasonable amount.
Make it a top priority
The excuse many give for not investing in stocks is lack of funds. But it is more of interest they have than that. Develop the habit of saving those little monies you spend on things that are of little or no value. Stash Invest, for example, accepts as little as $5, so you can open a brokerage account with them.
The coming of online brokerage has made investing in the stock market much easier. Now anyone can open a brokerage account and invest in stocks. This post is to debunk the myth that one must have thousands of dollars to become a stock investor. No matter the amount of money you have, you can become a stock investor today.