Can you begin investing with only $10?

Hi Pete,

Just found out today that a company I support and sell my crafts on is going to go live on the Nasdaq stock exchange. I'm interested in investing, but I don't know where to start. Is it possible to only buy a few shares, maybe only spending $5-10 to get started? I don't really want to go through brokerage stuff, that's all a little over my head. I also have no idea what shares will start at and if there is a minimum I have to hit before I can get started. Also not sure if this is something I should or could get into as I'm going on medical leave soon. I have college debt, and my husband is starting grad school in the fall. So I wasn't sure if the stock exchange stuff could help grow a little money for me as I go into a time of financial instability. Any advice would be appreciated, we are on a tight budget since I'll be on short-term disability soon. We are cutting out eating out and other things like that so I'm looking for guidance on anything that could help. Thank you Pete!

Jenny

Thanks for the question, Jenny. I love that you are interested in dipping your toes into investing. I have an answer to your question 'can I start investing with $5-10?' and an answer to your implied question 'is this a good idea?' Fair warning, they are not the same answer.

Let's start with the first question. Yes, you actually can invest with as little as $10. You can also invest in a specific company of your choice. The place to do this is Loyal3.com. Most stocks cost more than $10 per share, but Loyal3 allows you to purchase fractional shares. All the available stocks are customer facing companies you know and trust, like Target, Starbucks, and Amazon. Etsy, which I'm assuming is the company you are referring to, will probably make it on there at some point as well. Loyal3 is 100% fee free, which they are able to do because they partner with the companies whose stocks they offer. Loyal3 is a great place for new investors to begin.

Now, to your implied question, is this a good idea for you? Well, no. I don't mean to discourage you from investing because I love that you want to jump in, but it won't do what you are hoping it will do. Let's for a moment assume you do invest $10 in Etsy and they have a great year. Your investment grows 10-20%. This is huge growth! Yet, you only earned $1-2. The other factor to consider is your time horizon. Growing your investment takes time. And time is not something you have when you are going through a period of financial instability. You'll need quick access to all your funds. Extracurricular investing shouldn't be a priority for you right now. But, when you get back on solid financial ground, starting small and growing your investment contributions monthly is a great way to get started.