Shares: are they really only for the rich/investors?

Question

I've always been under the impression that if you want to be a player in the "shares game" you either have to be an full time investor, or someone who has a lot of money to play with.

Is this true? Can the average Joe become involved?

Is it worth investing £50 here and there? Or is that a laughable idea?

There are fees/rules involved, is it worth the effort if you just want to see?

I know it's not instant money, but I'd like to get a few shares here and there, to follow the news and see how companies do. I hear that BRIC (Brazil, Russia, India and China) is a good share to invest in.

Can anyone share their experiences?

Answer 1

Small purchases will have a disproportionate expense for commissions. Even a $5 trade fee is 5% on a $100 purchase. So on one hand, it's common to advise individuals just starting out to use mutual funds, specifically index funds with low fees. On the flip side, holding stocks has no annual fee, and if you are buying for the long term, you may still be better off with an eye toward cost, and learn over time. In theory, an individual stands a better chance to beat the experts for a number of reasons, no shareholders to answer to, and the ability to purchase without any disclosure, among them. In reality, most investors lag the average by such a wide margin, they'd be best off indexing and staying in for the long term.

Answer 2

A guy I used to work with would buy some shares in certain companies on a regular basis. The guy in question chose Coke, Pepsi, GE, Disney and some other old stable stocks. He just kept buying a few shares ($50 or so at a time) year after year after year. He worked his entire life, but by the time he was ready to retire, he had a pretty sizable investment; he was worth a rather tidy sum.

The moral of the story is, it is very much worth it to invest a bit at a time. Don't bother with the idea of buying low and selling high; not right now. Just go ahead and buy stable stocks (or shares of index funds) and wait them out. This strategy (mixed with other retirement tactics like a 401K from work, and IRA of your own, Social Security in the US) is a good way to build wealth.

Don't spend money you don't have, be ready for a long term investment and I think it makes great sense, regardless of what country you live in.

Answer 3

I think small sums invested regularly over long-term can do good for you, things to consider:

• Be careful with the costs
• Have goals and stick to them over the long term
• Spend only what you will not need within 5 years, if you invest in the stock market
• Try to find a tax-safe vehicle for your investment

I would go with an index fund and contribute there regularly.

Answer 4

I think I have a better answer for this since I have been an investor in the stock markets for a decade and most of my money is either made through investing or trading the financial markets.

Yes you can start investing with as low as 50 GBP or even less. If you are talking about stocks there is no restriction on the amount of shares you can purchase the price of which can be as low as a penny. I stared investing in stocks when I was 18. With the money saved from my pocket money which was not much. But I made investments on a regular period no matter how little I could invest, but I would make regular investments on a long term basis.

Remember one thing, never trade stock markets always invest in it on a long term. The stock markets will give you the best return on a long term as shown on the graph below and will also save you money on commission the broker charge on every transaction. The brokers to make money for themselves will ask you to trade stocks on short term but stock market were always made to invest on a long term as Warren Buffett rightly says.

And if you want to trade try commodities or forex. Forex brokers will offer you accounts with as low as 25 USD with no commissions. The commission here are all inclusive in spreads.

Is this true? Can the average Joe become involved?

Yes anyone who wants has an interest in the financial markets can get involved. Knowledge is the key not money.

Is it worth investing £50 here and there? Or is that a laughable idea?

50 GBP is a lot. I started with a few Indian Rupees. If people laugh let them laugh. Only morons who don't understand the true concept of financial markets laugh.

There are fees/rules involved, is it worth the effort if you just want to see?

The problem with today's generation of people is that they fear a lot. Unless you crawl, you don't walk. Unless you try something, you don't learn. The only difference between a successful person and a not successful person is his ability to try, fail/fall, get back on feet, again try until he succeeds.

I know its not instant money, but I'd like to get a few shares here and there, to follow the news and see how companies do. I hear that BRIC (Brazil, Russia, India and China) is a good share to invest in.

In Brazil and India, the good thing is share prices are relatively low even the commissions. Mostly ROI (return on investment) on a long term would almost be the same.

Can anyone share their experiences?

Always up for sharing. Please ask questions no matter how stupid they are. I love people who ask, for when I started I asked and people were generous enough to answer and so would I be.

Answer 5

Put £50 away as often as possible, and once it's built up to £500, invest in a stock market ETF. Repeat until you retire.

Answer 6

Shares are for investors. Most of the rich are investors. Unfortunately, the reverse is not true. But if you want to get rich, the first step is to become an investor. (The second is to become a SUCCESSFUL investor.

50 pounds might be too little. Try to start with at least 500 at a time. You can ADD amounts of 50 pounds.

There are definitely fees involved. You will "pay for lessons." But it will be worth it, if you become even a moderately successful investor.

As for rules, they'll teach you the rules. Everyone wants your business.

People have gotten (modestly) rich, buying shares here and there. One man told me of investing $600 in a company called Limited, and ending up with $12,000 some years later.

BRIC is not a "share." It is an acronym for four countries "of the future." High risk, high reward here.

Answer 7

As a matter of fact, I invest small sums in stable stocks every month (in fact, much lesser than the $50 you are talking about). More than the return on investment, I gained a lot of knowledge keeping track of my stocks and this now helps me pick my stocks better. And the portfolio is doing great too.

So, it is a good idea to start small and invest regularly.