In the olden days, it is somehow required to make lots of money to make an investment account. However, times have changed – now, it does not take a lot of effort to start making steps in making your money grow.
It Depends on Your Plans
In determining how much money you should put up for investment, you must first determine what you would want to do with your money.
If you plan to achieve several short-term goals such as buying a house in a span of a year, you would want to put your money aside using US Treasury bonds or invest in Certificates of Deposit or CD. Such investments allow your money to grow over time and they involve little to no investment risks. While the idea of such investments is to protect your capital, they would generally yield lower returns.
If you are the type that would want to go solo, self-starter investments, or businesses, may also work. However, it is needless to say that you may need to put up a large capital in order for you to start making money out of this investment.
If you are planning to start your investment with a small amount of money and you are willing to wait long-term, you may want to consider investing on mutual funds and brokerage. These forms of investments are best for people who want to make their money grow for retirement or a college plan.
Companies That Will Help You Invest
The amount that you need to start investing also relies on what kinds of companies are you going to approach to help you grow your money. If you plan to work on mutual funds or brokerage, there is a minimum amount for you to open up an account with companies that work on these types of investment. There are companies that would require you to start paying $50 and will ask for subsequent amounts of $25. Other companies may require you to make a startup payment of $25, and then charge you with automatic purchases of the same amount every month. Each time you make an investment in a company, make sure that you keep these fees in mind so that you’d know how much you should allocate for your investment.
Apart from these fees, you will want to keep in mind that there are certain hidden fees that investments companies charge. Among these fees are year-end fees that works as a safety net for the company. Then again, some fees may be waived if you have a high balance in your account.
Choosing a Broker
Brokers are people who lend you professional knowledge regarding your investment. They are best to hire when you need more knowledge on where to invest your money, or if you need someone to attend to your investment.
Brokers, or financial advisors, do not do this for charity. As there is no free lunch when it comes to business, part of considering how much money you would need to put aside for your investment is how much commission these financial experts are going to charge you for their services.
The most common and, in my opinion, the better way to manage your investments is to use one or, in some cases more than one, of the online brokerage firms. These firms are much cheaper and provide many useful and insightful tools that support the investments that you choose. One brokerage firm that is a bit different than the others is Betterment.com which allows you to build up your portfolio automatically after you set up your goals. They charge very low fees and you can learn more about how they work here http://bestratesin.com/betterment/638/ which also elaborates when is best to use them. In addition to Betterment, here are few more reviews of online brokerage companies that are worth to check out:
- Review of OptionsXpress http://bestratesin.com/optionsxpress/774/
- Review of TradeKing http://bestratesin.com/tradeking/519/
- Review of TradeMonster http://bestratesin.com/trademonster/888/
- Review of eTrade http://bestratesin.com/etrade/669/
The Other Important Things
The other important things that you need to consider when starting with investment are your monthly income and the bills that you pay for. In a nutshell, these factors determine what you can afford to actually put aside for investment. If you are making $400 a month and you are paying for your child’s schooling and rent, you may want to look for additional income to augment the money you have left at the end of the month.