There’s no need to wait until you come up with hundreds or even thousands of dollars before opening an investment account. You can get started today with just a few dollars. Here’s how:
Direct Stock Purchase Plan
If you want to invest in individual companies, Direct Purchase Plans (or DPPs) is your best bet. With these, you purchase stocks directly from the company – there’s no brokerage account, no middleman, and you work directly with the company that issues the stock.
The only downside with DPPs is that not every company offers it – and if they do, they hardly promote it. It’s up to you to find them. You’ll have to spend some time visiting their websites and look through their investor relations section to find out whether they offer direct purchase plans and how to get started.
Online Brokers and Investing Apps
Another way to start investing with a small amount of money is to sign up with an online discount broker. You can already create an automatic investment plan that’ll help you start building your portfolio, for just a few dollars.
The same goes for investing apps. Look into the investing apps that are currently popular on the market – but remember, each app works differently. While some let you round up the change from purchases and invest the difference, others will let you invest in fractional shares. There’s one thing all apps have in common; they’ll help you build a diversified portfolio with the money you have at hand.
Both online brokers and investing apps can charge service and maintenance fees.
Invest in ETFs
A little money can go a long way with ETFs. Buying an ETF, or exchange-traded fund, is like buying a basket of securities. They can contain various investments including stocks, commodities and bonds. ETFs have a specific share price and can be purchased through online brokers and traditional broker-dealers.
But ETFs don’t come without drawbacks, unfortunately. You’ll have to purchase whole shares, for example, and you’re going to pay a trading commission each time you make a trade.