While investing in the stock market was once the exclusive realm of the wealthy, thanks to innovations in technology, anyone with a laptop, a little time for research, and a few extra dollars can become an investor. Let’s explore the many ways you can invest in the stock market without breaking the bank.
Traditionally, investing in the stock market has proven to be a costly endeavor in part because you end up paying a stockbroker substantial consulting and commission fees. You can avoid these fees by learning how to buy stocks online without a broker. While online brokerages charge a small fee for each transaction, it’s only a fraction of the cost of a traditional stockbroker’s services. Another advantage of using an online brokerage is that you can access your portfolio and manage your stocks whenever it’s most convenient for you.
When you’re deciding on which online brokerage to open an account with, you should take into account your investment needs. Some brokerages provide educational resources for beginners, while others cater to more experienced investors. You’ll also want to compare transaction fees and platform tools.
If you really want to simplify your investments, consider an investment app for your smart device. These apps charge a very low subscription fee, usually $1 a month, for the use of their platform. You can use the app to set up automatic investments at your preferred frequency, drawn directly from your checking account. Most apps will choose the stocks that best suit your investment goals, so you don’t even have to do any research.
Employee Stock Purchase Plans
If your employer offers an employee stock purchase plan, you should consider participating if you’re looking for a low-cost investment. Many companies offer employees a lower price on stocks than what general investors would pay. The cost of your shares is automatically deducted from your paycheck, simplifying the investment process. Since you’re buying stocks directly from your employer, you’ll avoid transaction fees.
Direct Stock Purchase and Reinvestment Plans
If you’re self-employed or your employer doesn’t offer a stock purchase plan, you can invest in other companies that offer direct purchase plans to outside investors. While some companies require that you make a substantial initial investment to participate in a direct stock purchase plan, that fee is often waived if you agree to make an automated monthly investment.
Not only can you avoid transaction fees by directly investing in a company, but you can also reinvest your dividends for free. By reinvesting your dividends, you can quickly accumulate more shares. A traditional stockbroker would charge you for dividend reinvestment, which is yet another reason to avoid investment through a stockbroker.
As you can see, there are several low-cost ways to invest in the stock market. With a little research and planning, you can make any of these methods work for you. You’ll soon see that investing in the stock market is a great way to boost your income and create a more secure future for you and your loved ones.