One of the most common complaints from the majority of the people who would like to invest for stock market is that they don’t have enough amount of capital to invest. Maybe you won’t believe that anyone can invest to the stock market, even if he or she is not rich. Well, it’s definitely true. You will only have to put small risk, so you can attain the desired investment. Many new investors were asking, “How much money do I need to start investing?” there is actually no right answer, but it’s fairly difficult to invest below 1,000 dollars. With 1,000 dollars budget, you can only open few accounts with a small number of brokerage firms. But with around 3,000 dollars, many firms will surely get interested to do transactions with you. Two basic ways can be used by the investors to invest. One can either open brokerage account to a licensed broker dealer or can directly deal to a mutual finance company like the Fidelity or Vanguard. The brokerage account allows the investors to direct the buy and sell several securities through their brokers like the mutual funds, bonds, and individual stocks. This also let the investors to have substantial flexibility that usually have charges on the yearly maintenance fee when the balance of the account is small.
The amount of capital that you need to provide for investment will always depend on the type of broker you choose. So for the other broker dealer you may again ask, “How much money do I need to start investing? For some other brokers, you are required to give 5,000 to 10,000 dollars to start an account for investment. These broker dealers usually ask for a bigger initial account, as they provide full-service to the investors. On the other hand, there are several online brokers that allow you to open an account as smaller as 500 dollars. These online brokers offer some free information, excellent services, as well as convenient utilities like the online stock tickers. They also represent a perfect value for investors who have been able to make their self-research and have made investment decisions on their own. However, prior to your decision to open account with these full-service brokers, you still have to consider the charges for transaction fees. You have to calculate to know how much you can spend for the transaction fees.
If you prefer to purchase stocks only twice per year, it does not take much difference, however if you trade on normal basis, you can quickly spend thousands of dollars of all the charges for transaction fees. You cannot possibly get ahead with your investment, once you start with just 500 dollars but is paying 25 dollars per transaction for buy and sell. There are many considerations before you will know the answer to your question of “How much money do I need to start investing?”
