25 responses

  1. DIY Investor
    November 18, 2012

    Really good advice. I have people ask me this all the time. I know it is scary for those who don’t have anyone to turn to who will give them good advice. Hopefully your post will get to them. I agree that it will pay off big over the long run!

    • moneycone
      December 4, 2012

      Thanks DIY!

  2. Thomas S. Moore
    November 19, 2012

    When you only have a little to invest I say go with your company’s 401k and then think about opening mutual fund account. I personal like T. Rowe price but that is just preference because I worked there for several years.

    • moneycone
      December 4, 2012

      ETFs normally have lower expense ratios when compared to equivalent mutual funds due to added trading costs. My post shows you how to take advantage of the lower cost without incurring trading costs.

      With a 401K, you choices are severely limited. I’d say, contribute as much as your company match and put the rest in an IRA.

  3. Steve
    November 19, 2012

    You might want to sell your fruity shares before the end of the year. Nobody knows for sure, but as it stands right now, taxes on investments will go up on January 1st. So 2012 You will be even more regretful than 2012 You for not having structured the investment right.

    • moneycone
      December 4, 2012

      I bought my fruity shares before iphones and ipads or even Intel iMacs and everyday market gyrations don’t bother me much. I don’t invest that way.

      Yes taxes will most likely go up – that is an issue if I invest for the short term. My investing horizon is very long and I don’t intend selling unless company fundamentals change.

  4. Untemplater
    November 20, 2012

    I used to think the same thing. Commissions are really expensive when you don’t have that much money to actually invest. Savings do add up though even if you don’t have a lot to start with. Putting aside even just $10 a month will grow over time!

    • moneycone
      December 4, 2012

      Most definitely Untemplater!

  5. Shilpan
    November 22, 2012

    I love this article, MC! You are right about investing in your IRA. I also have invested in the same fruit company, and I am pruning the tree every once in a while to take sweet profit. I also like the fact that Uncle Sam is not stealing my sweet profit. :)

    • moneycone
      December 4, 2012

      I normally stay clear of tech stocks, but this one was a rare exception!

  6. Pauline
    November 25, 2012

    If you have very little to invest, you are probably still in debt, and those little payments will likely get a higher return making a dent on your credit card balance.
    I used to have a regular investing account (UK) where I would put $100 per month and by setting up a monthly automatic transfer there was no fee, unlike the one off payment that had a minimum of $500.
    I also traded forex for a while and there was no cost other than the spread.

    • moneycone
      December 4, 2012

      Excellent point Pauline!

  7. Maggie@SquarePennies
    November 25, 2012

    This is very practical advice that can really work for you. Thanks MC, for sensible advice for a situation that can be confusing.

    • moneycone
      December 4, 2012

      Thanks for the kind words Maggie!

  8. TB at BlueCollarWorkman
    December 4, 2012

    Well this is the most helpful thing I”ve read on this topic in a long time. I get confused, I get nervous, etc etc. THANK YOU! Although, one qustion, can you back up the bus a few stops? What’s an ETF?

    • moneycone
      December 4, 2012

      Glad you find the post useful TB. An ETF is a basket of securities that trades like a stock. For example, instead of buying individual stocks like Apple or Google, say you want a little bit of both to mitigate risk, you can buy a basket of technology stocks like XLK which is an ETF.

      There are hundreds of ETFs issued by different companies based on different classifications. You can buy ETFs by country, sector, index etc. You should choose one that has a low expense ratio – jargon for price you pay for this convenience!

      You buy and sell ETFs exactly like individual stocks. Every ETF has a symbol just like a stock and the trading commission is the same as for a stock.

      ETF stands for Exchange Traded Funds.

  9. Joe @ Retire By 40
    December 5, 2012

    I would go with the 401k since you don’t have to pay a transaction fee. If that’s not a good choice, then I would go with a Roth IRA. Some brokerage has a list of no fee ETF. I know VWO is free to trade at Firstrade. That’s where I’ve been stashing my spare changes.

  10. 101 Centavos
    December 8, 2012

    A standard IRA or a Roth IRA is about the best place to start socking in those dividends.

  11. Savvy Scot
    December 11, 2012

    Some great advice… I have started investing recently and have gone for some low cost ETFs (simply don’t have the time to track stocks myself). In the UK we have a far more limited choice of companies unfortunately..

  12. Financial Independence
    December 24, 2012

    This is a really thorough review of funds and some valuable observations. Thank you, moneycone.

    I think a lot of ETFs are a bit overvalued and bringing very little income (for example VDE at Vanguard is less than 2%) but without real competition this is best than nothing.

  13. Julie @ Freedom 48
    January 27, 2013

    We needed a minimum of $5,000 to open our investment account (with the Bank of Montreal) – so we had no choice but to save up bit by bit until we had enough to open the account. Regardless, I still think it’s important to save a decent amount in a bank account – that’s liquid and accessible if need be. I often hear experts recommending we all have a six month “emergency fund” saved up… above and beyond our investments.

  14. Pam@Pennysaverblog
    March 21, 2013

    Good tips on selecting a good brokerage account. I think it’s important that people feel that they can start investing even without having a lot of money. But, as you pointed out, it wouldn’t make sense for someone to pay $7 to invest $100 – instead, they need to look at more affordable investment options.

  15. zimmy@moneyandpotatoes.com
    May 16, 2013

    If you have very little money to invest and don’t want to pay $7.99 to $12.99 per stock purchase, you really should consider P2P loan investing. You can invest as little as $25.00 and the learning curve for the novice investor is far lower. I do recommend doing extensive research online and checking out many blogs who specialize in P2P lending before investing a penny.

  16. Stefanie @ The Broke and Beautiful Life
    November 26, 2013

    I think the best thing you can do is just get started- no matter how little you have. Yes, you have to be wary of account minimums, but once you get going and see how quickly your money can grow, you’ll be motivated to put more and more in.

  17. Small Business Billionaire
    December 4, 2013

    Great article Money Cone! I feel like starting my investment portfolio with even just a little amount was the hardest thing for me to do.

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