Investing may seem like a pastime for the rich… But that’s not the case. This how-to article shows you how you can start dividend investing with $1,000 (or less). There has never been a time when building a portfolio is as cost-effective as it is today.
That’s because of the rise of discount brokerages. Discount brokerages make it cost effective to invest smaller sums of money.
Most discount brokerages allow investors to trade for under $10 a trade. Some even offer free trading:
- Robinhood offers free trades
- Loyal3 offers free trades
- Motif Investing offers “motifs” for just $9.95
These brokerages minimize the cost of investing.
As a rule of thumb, you should always keep your transaction costs under 1% of your total trade amount. For example – if your brokerage charges you $7 to trade, you should invest in chunks of $700 or more. Free brokerages allow investors to invest smaller sums of money. And just because an online broker doesn’t offer free stock trades, it doesn’t mean they aren’t worth looking at. Both Fidelity and Schwab allow you to trade some ETFs without a fee. [Read more…]