Like most Associated Content Producers, I'm not especially wealthy, nor do I have money burning a hole in my pocket. If you have either of these "problems", then this article won't mean much to you.
But like many AC producers, I take good care of my money and have a little bit in savings. I like the idea of putting my savings into the stock market and earning a high rate of return.
Sadly, stock brokers charge per trade. E-trade, for instance, will charge me $12.99 to make a stock purchase and another $12.99 to sell. That means if I invest $300 and earn 8% the first year, I still am in the hole because I had to pay $26 in fees. And this is from an online discount broker!
Now for big time investors, this isn't a problem. If I buy a thousand of dollars of a stock, $26 in fees won't have much of an impact on my overall return. But I'm an Associated Content Producer, so that won't work for me.
So I've gone on a search for any way I can possibly circumvent the fees. For investors at our level, it is the best way to maximize our returns. For us, why research a high returning stock if you aren't researching a low fee way to buy and sell the stock?
I've found two web sites that are head and shoulders above the rest, and I'm happy to share them with you.
ComputerShare
The first is Computershare (formerly EquiServe). At Computershare, you purchase stock directly through a company. This is called a Direct Stock Purchase Plan (DSPP) The fees vary from company to company, but generally are very low.
With Exxon-Mobil, for instance, you pay $10 to set up your account, and then each time you purchase stock the company pays your fees. The minimum investment is only $250 to start. Even AC producers can afford that!
The knock on Computershare is that you are limited to companies that decide to offer Direct Stock Purchase Plans. Also, I've found that it can take a week or two to get your account going, so you are out of luck if the stock price goes up in those two weeks.
For a list of stocks you can purchase directly from the company, visit this link that lists Computershare's DSPP companies.
TradeKing
The second great fee-dodging site is TradeKing. TradeKing is targeted to people who trade options and other fancy investments, and this is where they make most of their money. Consequently, they have great prices on standard, boring stock purchases and sales. Only $4.95 per trade!
TradeKing is the lowest fee I've been able to find anywhere. Also, once you have your money in your account, trades are instant. This pleases me since I've been following stocks closely and trying to buy at a particular low price. TradeKing has become my preferred broker.
Are you confused by all of the confusing options trading that the site mentions? I'm not, but I wish I was confused. They're not good for long-term investing. Just ignore them! All you need to know is that they save you $8 per trade versus E-Trade.
With lower fees, our investments can earn higher returns even if we aren't rich. I suggest you research your stocks, but also research who you use to buy those stocks. At our dollar amounts, both are equally important!
stock promoters
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