How To Start Investing
1. The first step is to determine what asset class that you would like to invest in. You can invest in stocks, bonds or mutual funds.
2. Now it’s time to get started. If you choose to invest in stock, you can use online sites like Buyandhold or Sharebuilder which allows you to buy stock with only $20. These sites have very low fees and are great for the beginning investor. Buyandhold has a fee of only $6.99 per month which allows you 2 free trades every month. Sharebuilder charges no monthly fee and costs $4 to buy stock and $9.95 to sell.
3. If you choose to invest in bonds, you can use the TreasuryDirect website. TreasuryDirect is the US government’s website that sells US savings bonds. I bonds and EE bonds can be bought for as little as $25.
4. If you would prefer to invest in a mutual fund, then should look at companies like T Rowe Price and the Principal Financial Group. These firms offer automatic asset builder plans that let you invest for $50 per month.
I started by investing 20 bucks a month in a bond fund many years ago. And then moved out from that.
Are you kidding! Paying $6.99 per month to have a small investment account is robbery. If you are only putting in $20 per month that’s an upfront 35% fee. It will take a long time and some good investments to overcome that hit.
@Rob
I admit that 6.99 is a lot if you just keep it at $20. Any stock brokerages fee will seem high for $20. But it’s cheap for 2 trades per month. It breaks down to less then $3 per trade. The amount never changes whether you trade $500 or $50,000.
Thanks for the information, I will look into this.