May 24, 2020
So, you’ve decided to begin your investing journey. Maybe you read my article on “The Biggest Financial Mistake You Can Make” (spoiler alert, the biggest mistake you can make is not investing), maybe you have opened a brokerage account, or maybe you have absolutely no idea where to begin.
Well, let’s do what we’re known to do here and tackle some of the most common investing questions. Today’s focus: Can you really get started with only $100?
The short answer to this is a resounding YES! I’m sure you’ve gathered this though, I mean, it is in the title after all.
In today’s world, many brokerages have $0 commissions as well as $0 to very low minimums account balances. This essentially means that you can open an account, deposit $100, and buy $100 worth of stock and hold on to it with no additional fees. On top of that, more and more brokerages are allowing investors to buy fractional shares of stock in a company. These are exactly what they sound like, a percentage of one share of stock relative to the price of that stock.
For example, if you were to have $100 in an account with fractional share trading available you could focus on owning the companies you care about, without having to worry about buying a full share. This is increasingly important as such companies as Amazon will cost you over $2,000 for only one share. Instead, you can focus on the distribution of your $100 portfolio. This can allow you to have as much or as little exposure in individual corporations as you want.
Fractional shares sound almost too good to be true based on this, but remember investments rise and fall in percentages, do not focus on the dollar amounts. This is particularly true if you are to have a $100 portfolio. Even if your portfolio doubles in 8 years (the historic market average) your portfolio is worth only $200. Now that is a $100 profit for doing absolutely nothing, but for 8 long years of patience it hardly seems worth it.
In conclusion, you can get started investing in almost any increment in today’s financial landscape, however consistent saving and investing over the long run is the only proven way to take control of your financial future. Everyone needs to start somewhere, even Warren Buffet, one of the greatest investors of all time. Low barriers to entry in the form of little to no account minimums, $0 commission trading, and fractional shares encourage everyone to take control of our financial future.
** Disclaimer: The Tempered Bull is committed to enhancing the finance wellbeing of our readers; however, these articles should not be your only resource. The suggestions made here are meant to be taken in conjunction with professional financial assistance. We are not financial professionals, just regular people with a passion for sharing our experience. The Tempered Bull does not have any private knowledge about the companies we discuss, and The Tempered Bull and its associates do not benefit from your purchase or sale of any equites. The Tempered Bull has a disclosure policy.