What is the minimum amount of money needed to invest in stocks? The shockingly low amount of money to start buying stocks. This article is not investment advice. It is for entertainment purposes only.
Unlike real estate investing or starting a business, investing in stocks is possible with a surprisingly low amount of money.
As long as you have a smartphone and an internet connection, you already have all the tools you need to start investing.
The only question after that is:
What is the minimum amount of money needed to invest in stocks?
In this post, I will answer that question and tell you the exact amount of money you need to start investing in stocks.
Let’s dive right in.
What Is The Minimum Amount Of Money Needed To Invest In Stocks? $15
The short answer is $15.
This works out to roughly the same price as a fast food meal.
To be completely honest, it might even be less than $15.
It just depends on if you can find a quality stock to buy that costs less than that per share.
To put it another way, you can invest for as low as the cost of one share of the stock you want to buy.
Since most brokerages do not have any minimum deposit requirements, and because zero-commission brokers like Wealthsimple are available, the minimum amount of money needed to invest in stocks is $15 or less.
How To Start Investing With Less Than $15
To start investing with little money, you must be the age of majority in the city that you live.
Once you are legally old enough to invest, you can open a zero-commission broker account like Wealthsimple in Canada. If you reside in the U.S., you can invest with Robinhood.
After your account is set up, transfer over $15 or less and you can begin investing.
Examples Of Stocks/REITS You Could Buy
The main issue with investing with little money is that most quality stocks cost more.
However, if you are willing to do the research, and depending on what type of investor you are, it is possible find stocks to invest in.
For instance, if you are an income investor, you could start investing in REITs.
Alternatively, if you are a savvy stock picker, you might be able to find the odd small-cap stock to invest in.
Here are a few REITs under $15 that you could consider:
NorthWest Healthcare Properties REIT (NWH.UN)
Current price per share: $13.04 CAD
P/E ratio: 7.35
Distribution yield: 6.14%
Market capitalization: 2.55B
As of the market close on April 16, 2021, you can buy a share of NWH.UN for $13.04.
So, if you started investing with $15, you could buy one share and still have $1.96 left over.
From the moment you invested in one unit, you would start earning investment income.
Based on the current distribution yield of 6.14%, you would earn 7 cents per month or 80 cents per year.
Choice Properties Real Estate Investment Trust (CHP.UN)
Current price per share: $14.25 CAD
P/E ratio: 22.36
Distribution yield: 5.19%
Market capitalization: 10.3B
Choice Properties Real Estate Investment Trust is another one of my favourite REITs.
They have a low payout ratio, which means there is less of a chance they will be forced to cut their distributions.
Furthermore, nearly half the properties in their portfolio are associated with grocery stores, which are essential.
You could invest in a single unit of CHP.UN for $14.75 and start receiving cash distributions by the next month.
Based on the current distribution yield of 5.19%, you could start earning 6 cents per month by investing in a single unit. It works out to $0.74 per year.
Vitreous Glass Inc. (VCI)
Current price per share: $4.60 CAD
P/E ratio: 10.69
Distribution yield: 6.96%
Market capitalization: 28.91M
Vitreous Glass Inc. is a small-cap stock I discovered in 2018.
It is a Canada-based company that crushes and sells waste glass to fibreglass companies in Alberta.
If any of the investment options on this list is proof that it’s possible to invest with less than $15, it’s VCI.
I originally started buying VCI around $3.40 per share around the end of 2018.
As of the market close on April 16, 2021, shares are up approximately 35%. Plus, I’ve been receiving dividend payments along the way.
If a zero-commission broker offers this stock, you could buy a single share for less than $5.
What Else Should You Consider?
Now you know it’s possible to invest with less than $15.
While this may be true, there are a few other things you should consider before you start.
For example, depending on your financial situation, you might want to build up an emergency fund first.
This way, you don’t have to withdraw from your investments if you need the money.
Also, make sure to find a zero-commission broker so you can keep your investing fees as low as possible. Investing fees make a big difference over the long term.
Additionally, you should make sure you are committed to investing over the long term.
If you are the type of person that quits easily, investing with little money isn’t going to help you much.
Once you begin investing in stocks, you should plan to invest for at least 5 to 10 years.
Otherwise, you are just a trader.
You Don’t Have to Save Up Because Investing Is a Long-Term Game
Many people find it hard to be motivated to invest with such a small amount of money.
I mean, even if your stock doubles, $15 only turns into $30.
That doesn’t seem like a worthwhile endeavour for most people.
As such, they avoid investing or they wait until they have more money to invest.
But the reason you don’t have to wait is because investing is a long-term game.
You can dollar cost average into positions with little money.
As long as you consistently contribute and remain invested, compound interest will begin to add up over the long term.
To prove that it’s worth it, I ran the numbers to find out how much money you could have if you invested $15 per month for 40 years.
Even at a modest 7% annual rate of growth, investing $15 per month turns into $37,297.95 in 40 years. Test out for yourself the compound interest calculator I used.
What Is The Minimum Amount Of Money Needed To Invest In Stocks? – Final Thoughts
What is the minimum amount of money needed to invest in stocks?
$15.
Possibly even as low as $5.
Simply put, you can invest for as low as the cost of one share of the stock you want to buy.
So, stop questioning if you have enough money to invest and start investing now.
Stop thinking it’s too late to start investing.
Instead of being pessimistic, just start investing.
Ultimately, time in the market beats trying to time the market.
You can start investing with as little as $15 after you open a zero-commission brokerage account this week.
Questions: How much money did you start investing with? Did you wait until you saved up first, or did you start investing as soon as you could?
Related Articles On Investing For Beginners
Investing With Little Money – 6 Easy Steps To Invest In Stocks When You’re Starting From Nothing
Best Brokerage In Canada: The Best Self-Directed Stock Brokers In Canada
Stocks Under 50 Dollars: 6 High-Caliber Stocks Trading At A Low Cost Per Share
Monthly Dividend REITS: 5 Reliable REITs That Pay Every Month
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