For many new investors, something which often worries them is “how much money do I need?” To start investing, you will probably be surprised to discover that you don’t need anywhere near as much money as you may at first think. To answer the question “how much money do I need to start investing?” the answer could be as low as five dollars to fifty dollars if you are going to make regular payments into your investment plan.
“How much money do I need to start investing?” in reality, of course, it depends on exactly what kind of investment you are going to make. If you are looking to make small regular savings each month, you should consider mutual funds or Schwab’s Stock Slices. The amount you require to start will be very low, but you will already have begun your investment portfolio and can build from there. With these smaller payments, you need to carefully consider the charges that you will incur, especially with annual minimum balance fees. For more on the Stock Slices program by Schwab, visit https://www.schwab.com/fractional-shares-stock-slices. To invest small regular amounts in mutual funds, get more information on this process at https://www.schwab.com/mutual-funds.
If you have decided to start your investments with a lump sum, then the minimum amount you need will vary depending on a couple of factors. First, you will need to decide whether or not you require a full-service broker or whether you feel confident of making your own investment decisions at a discount broker such as Schwab.
If you feel that you would like the reassurance of having a full-service broker, you will generally find that they are looking to invest between $3,000 and $5,000 minimum. However, a few will consider acting for you with a minimum balance of just $1,000, providing you are prepared to search around.
Online brokers offering a cut-price service where you are responsible for your investments will often let you open accounts with amounts as low as $100. These will enable you to get a start in the market much more easily, but you need to be confident in your own decisions. If you think you can do your investing without the assistance of a Registered Financial Consultant consider one of the many Robo-Advisors, for more information visit https://kgmeyerpc.com/robo-advisors-pros-and-cons-2/.
Whether you go for the online brokerages or the full-service option, you need to keep in mind that each trade will incur a fee. Some discount brokers now have free trades that are even more advantageous to small investors. Of course, these fees will have a disproportionately large effect on your account if you only have small amounts invested. So please remember to allow for them when deciding on the answer to “how much money do I need to start investing?”
If you are in Nashville, anywhere in the Tennessee area, or located anywhere in the United States and need assistance, please reach out to me directly. I am a fee-only fiduciary Registered Financial Consultant, and I am here to help you today!
