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Begin Investing Small Amounts of Money

If you are concerned that you will need thousands of dollars when trying to open an investment account, you should be putting such thoughts behind. This was a requirement in the past when you needed to have a significant amount of money before you could invest in mutual funds or a brokerage account. Drastic changes have been seen in the recent past and you can now begin investing small amounts of money and slowly building up your portfolio.

Wondering how you can begin investing small amounts of money? Take a look at the tips provided and you could be encouraged to make a beginning right away.

[su_quote cite=”Henry Kravis” class=”cust-pagination”]”It’s one of the most important things at the end of the day, being able to say no to an investment.”[/su_quote]

Stock Purchase Plans of The Direct Variety

If making investments in individual companies holds your interest you should be looking at direct purchase plans because you can make your purchases directly from the company. You do not need a brokerage account and no middlemen are involved because you would be dealing directly with the company that issues the stock. Perhaps the only drawback you could face will be related to the matter that not every company offers direct stock purchase options.

Companies are restricted from advertising their direct purchase plans and therefore you will need to conduct research in order to find them. You would have to spend some time visiting the website of the company to get an understanding of their investor relations department before you determine whether or not they are offering a direct purchase plan and the method to get started.

Stock purchase plans of the direct variety offer some benefits for you because you will not be required to pay a hefty commission to a broker and you also have an opportunity to purchase shares in fractions. You can make a beginning by purchasing just half a share and then continue increasing your investment in the company by purchasing more shares over a period of time.

Brokers That Allow Small Investments

Another way to begin investing with a small amount of money is to create an account with ShareBuilder with ING direct. You can create an automatic investment plan by investing just four dollars and it will be helpful for you to begin building your portfolio. You must remember that you will be liable to pay some fees and will also have some account restrictions but this is a good way to begin making investments without having a huge sum of money in your hands.

Using ETF’s

Buying shares of an ETF, or an exchange traded fund, is a good option if you are considering investments in mutual funds but do not have the high initial deposit that will be required. ETF’s can be traded like stocks and do not require a minimum initial investment of mutual funds. ETF’s have a specific share price and are available with any brokers. You have the option of purchasing just a couple of shares and make an investment that you can afford. ETF’s, however, have certain drawbacks because you will be required to pay a trading commission every time you make a trade. Therefore you must be prepared to bear the commissions unless you are prepared to invest larger amounts keep the costs of your transactions down.

Fund Companies Offering Low Minimums

You can also come across a number of fund companies that offer investors an option to invest money without asking them for large investments. You can begin making investments with just $100 in your hands and these low fund companies are making it easier for fresh investors to make a beginning in the field of making investments.

The information provided within this article should make it clear to you that you do not need a large amount of money to begin making the investments you desire. If you are prepared to take the first step and begin making investments with a small sum you have several options available to you. You just need to consider your options carefully in order to begin calling yourself an investor.

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