How much money do I need to start investing in stocks?

How much do I need to invest to offset taxes and commision?

Taxes only matter if you make a profit, so in practical terms they shouldn't affect your starting amount.

As for commissions, you can pay $5-10 per trade with popular browser-based discount brokers like E-trade, Scottrade, or TD Ameritrade, or $.01 per share (and sometimes less, but usually with a minimum of $1.00 per trade) with direct-access brokers like MB Trading and Interactive Brokers.

I'd recommend, if you're just getting started, not risking any money you can't afford to lose, a minimum of US$2,000 and a maximum of US$5,000. In fact, you shouldn't start with much more, unless you have a high-paying regular job, because you undoubtedly will get overexcited at the beginning and lose some or most of it.

If you intend to daytrade US stocks (regularly buying and selling on the same day), you need a minimum of US$25,000 in your account at all times, but no one should start with daytrading without a big piggy bank.

If you trade infrequently, like once a week, it doesn't matter so much which broker you use. If you trade more frequently, you definitely need direct-access.

Once you're making money, on average, on your last 5-10 trades, you can increase the amount you invest.

Please be extremely cautious - I started with $5,000 in options, the absolutely worst thing to start with, and lost $4,000 over the course of my first year. Stick with straight stocks until you've mastered your emotions, then you can move on to options and futures and convertible bonds and commodities and everything else, if you want. If you're young (under 40), you have all the time in the world, so take it slow, master every lesson before moving on to the next one, and eventually - this may take weeks, months, or even years, but eventually - you can become rich. But keep your day job in the meantime.

It's important to point out, however, that a majority of people will never make money in the stock market. Not because they're stupid or because it's that hard, but simply because it's hard to be disciplined and objective when real money is on the line. Knowledge is 20%, discipline is 80%.

Hi,

There is a way to invest in stocks without a broker and if you keep reading I will tell you how.

The method is called DRIPs.

A DRIP is a Dividend Reinvestment Plan. It offers indidual investors, even a15 year old, a cost-effective way to build equity in a stock.

The DRIP is run by a corporation and it allows people to make cash purchases of stock or to reinvest dividends (if any). I have a DRIP program with Goodyear Tire and Rubber, but it ran into problems a few years ago and stopped paying dividends. I also have one with YUM which was spun off from PepsiCo.

You only need one share of stock to become eligible. In some cases it can be purchased directly from the company, but some require that they be purchased through a broker. If you are under 18 and cannot open an account with a broker, you could have your parents open up an brokerage account and purchase the share in your name.

There are no fees or commissions when you reinvest your dividends.

There are lots of companies that do this - over 1000. The company likes them because it's a low cost way to get capital or cash for their business. Because of that companies welcome new investors into their DRIP plans.

What makes DRIP popular is that most of the plans require very small cash outlays even as low as $10, some as low as $5.

Some of the world's largest companies like IBM, AT&T, and McDonald's have DRIPs.

Very wealthy investor like DRIPs because it allows them to bypass the broker's commisssion which lowers the investors cost of investing

Another benefit is known as dollar-cost averaging where a fixed amount is invested on a regular basis. The stock rises and falls with the market, but by investing periodically, the average cost of the shares tends to average out and not be affected by the market swings.

Liquidating or selling your shares can be a problem because brokers want to get a commission for selling and buying stock for investors, but the company will buy them back in some cases.

Dividends are considered income and used to be taxed by the IRS, but a change in the law makes them non-taxable. But if you sell your shares and make a profit you have to pay tax on the profit. There are two types of taxes for profits or capital gains: one is short term and costs more than the other kind of capital gain which is called a long-term capital gain and that occurs when you hold a stock for more than six months.

Goodyear Tire and Rubber's stock symbol is GT, but don't invest in this one because it doesn't pay a dividend yet..

YUM is the symbol for Yum! Brands, Inc and they own Pizza Hut, Taco Bell, and Kentucky Fried Chicken on the New York Stock Exchange (NYSE)

This Web site has a list of DRIPs: http://www.directinvesting.com/

To find DRIPs that pay good dividends, look in Investors Business Daily, Barrons, or the Wall Street Journal. There is a column that has dividends and return %. Most don't pay as much as a Treasury Note or a CD, but they have earnings growth to offset that income disadvantage. Than look them up in the URL above.

Google this keyword "DRIP lists" for more Web site. Be careful. Some of them charge a fee to sign up.

Kindest Personal Regards,

Walt Brown
Site Build It Certified Webmaster
capecod1@capecod-beaches.com
http://www.capecod-beaches.com
wab@theworld.com

As much money as you want it to be. Prices for stocks range from .20 cents to well over $3,000 per share. Commissions range in prices also.

Try http://www.sharebuilder.com and read about the process of trading and check out there prices for there services.

You may also check out http://www.e-trade.com

You can start investing for as little as twenty five bucks a month, dollar cost averaging into some no load mutual funds. As far as how much it'll take to offset costs, taxes, etc, you need to sit down with a guy to go over that. Try one of those "Edward Jones" guys or Charles Schwaab kinda thing. The important item, is to get started NOW!. Take advantage of tax deffered investing and compounding.

When it comes to tax time, I write everything off. My ink, Internet, paper and any programs that I buy for my computer. I consider this like a business and what ever I make gets taxed. I encourage family and friends to do the same. A nice place to start that requires Little money is...
http://www.sharebuilder.com/ you can open with no money and invest when your ready.

you don't need 10,000 or 5,000or even $500.00 just what ever you can afford, commission charges are cheep.just open up a on-line account.and find a good company and buy what you can,even if its just one share.JUST GET STARTED.
I went 20years before I started investing in stocks because I thought I needed thousands of dollars to start.Now I hate myself for waiting so long.good luck

5000$ is the great money that you can start
make to a low risk

Just wanted to correct one comment above: bkoo869's last comment "It's important to point out, however, that a majority of people will never make money in the stock market."

This is absolutely not true. The majority of people investing in the stock market do make money. That's because they invest for the long-term and are somewhat sensible or cautious in their investments.

HOWEVER what he may be trying to say is that the majority of investors don't beat the indexes (the S&P 500, etc.). This is because of human factors like wanting to jump onto the latest bandwagon, panicking when they should be buying (and buying when they should be afraid), etc.

I would agree that the majority of small (low-capital) day-traders don't make money overall (studies have shown this).

Zecco is FREE.

All you need is enough to buy one share.

It depends on the stock you invest in. Theres no point in investing 500$ into a stock already valued 200 a share. If you have as little as 500, try around the 1-5 dollar range.

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