Published in: Buying Stocks | Aug. 19, 2019

Start Investing in Stocks With $30 in 30 Minutes

Photo of Lyle Daly

By: Lyle Daly


You don’t need a huge amount saved to get started with investing.

woman's hand inserting quarter into piggy bank

Image source: Getty Images

When I first wanted to get started with investing, I remember that what frustrated me the most was thinking that I didn’t have enough money for it. Every advice article I read mentioned some minimum amount that you supposedly should have if you’re going to invest. And sadly, this minimum was always out of my price range.

Because of this advice on how many thousands you need before investing, I waited much longer than I would have liked for my first investment, and I’m sure this waiting cost me money.

The truth is that although it can be harder to invest with limited funds, it’s by no means impossible. To illustrate that, I’m going to explain how you could get started with just $30 in only 30 minutes.

1. Find an affordable broker

You’re going to need a broker to handle your investments for you. Fortunately, there are plenty of online discount brokers to choose from.

There are two things you’ll need from a broker:

  • A $0 account minimum
  • Commission-free exchange traded funds (ETFs)

Since you’re not investing much to start, you have to find a broker that doesn’t have an account minimum.

An ETF is a great investment option when you have limited funds because each one has a collection of different securities. These securities can be stocks, bonds, or other types of investments. If you buy an ETF, you’ll have a much more diverse portfolio than if you bought stock in a single company.

Most brokers also let you buy their ETFs commission-free. When you’re only investing $30 or less, the last thing you want is to pay $4.95 or more in trade fees, because you’ll already be losing over 15% of your money to fees.

There are quite a few brokers with $0 account minimums and a wide variety of commission-free ETFs. Some of our favorites are:

2. Open your brokerage account

Now that you’ve found your broker, it’s time to create an account.

To start, look for an "Open Account" option. Every broker’s site is different, so the wording could vary. When you’re prompted to select an account type, pick an individual brokerage account.

During the application process, you’ll need to enter the following:

  • Social Security number
  • Date of birth
  • Email address
  • Mailing address
  • Employment information
  • Financial information, such as your income

After this, you’ll have your brokerage account opened, and you just need to fund it. To do so, you must connect a bank account using the account number and the bank’s routing number. Then you can choose how much money you want to transfer from your bank account to your brokerage account.

3. Choose an ETF

The final step is where you’ll invest your money. All you need to do is pick one of your broker’s commission-free ETFs.

Your broker should have a page listing all the commission-free ETFs it offers, so you can look over your options there. The things to look for in this ETF are:

  • Costs $30 or less per share -- You need an ETF you can afford. If you have more money to spend, then you can raise this amount accordingly.
  • A low expense ratio -- This is how much it costs you to own the ETF. You shouldn’t be paying more than 0.50%, and under 0.30% is even better.
  • At least $10 million under management -- A large amount of money under management indicates the ETF has been around for some time and drawn investor interest. $10 million should be your bare minimum, but try to find an ETF with $25 to $50 million under management.

Once you’ve found an ETF that fits the bill, you can go ahead and buy it.

Building on your first investment

It doesn’t take an expert to realize that one $30 investment isn’t a ticket to being wealthy. But it does get the ball rolling, and if you continue to invest, you’ll give your money the opportunity to grow through compound interest.

The key is to make investing a habit. Figure out an amount that you can spare, and then invest that much every week or month. You can stick with your original ETF, or you can branch out into other investments.

With smart and consistent investments, you’ll steadily accumulate more and more wealth.

 

Using the wrong broker could cost you serious money

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