It's tragic that many people put off investing for years, thinking they're not rich enough to benefit from the stock market. You don't need to have $1,000 or more before you start investing.
Too many people think that they can't invest in a stock unless they have enough money to buy 100 shares of it. With some stocks, such as those of Washington Post
Fortunately, you're not out of luck if your last name is something other than Rockefeller or Gates or Winfrey. You don't have to buy 100 shares at a time. You can buy 17 shares or nine shares -- or even fractions of shares, using some services.
Why the misunderstanding about 100 shares? Well, the notion is just a little out of date, that's all. See, historically, full-service brokers charged very high commissions, with extra charges for purchases that weren't made in what was called "round lots," or multiples of 100. So 100 was viewed as the minimum number of shares you had to buy to avoid incredibly high commissions. Today, commissions from discount brokers are much more reasonable, and people can affordably purchase shares in quantities divisible by any number they want ... including one.
If you're curious about how you can buy fractions of shares, one way is through "Drips," also known as dividend reinvestment plans or direct investing plans. With them, you buy stock directly from companies, bypassing brokers and broker commission fees. You can also invest very small amounts, such as $20 per month. And if you plunk $20 into a stock that's trading for $80 per share, you'll be buying yourself a quarter of a share.
To learn more about investing Foolishly, visit our Fool's School and our Investing Basics area. Or check out some of our inexpensive and well-regarded online how-to guides, which feature money-back guarantees.
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And you can learn about brokerages and find one that's right for you by visiting our Broker Center. Did you know that some well-regarded brokerages are offering commissions as low as $5?