I'm going to reveal to you a little secret about making money from only small investment to build your stock portfolio.
Talking about stock investment, no amount is too small. The trick is to find the relevant investment vehicle for the money you have. Otherwise, brokerage fees and commissions can eat you alive.
If you can manage to save just $20 a month, you can actually put that money into investment in more than a thousand companies like Intel, Johnson & Johnson, or Harley Davidson, just to name a few.
How? Through a mechanism called DRIPS.
One best way to invest small amounts of money is through Dividend Reinvestment Plans (DRPs), also known as Drips. They and other companies like Direct Stock Purchase Plans (DSPs), allow you to bypass brokers (and their commissions) by buying stock directly from the companies or their agents. Isn't that great?
There are more than 1,000 publicly traded companies offer these types of stock plans. Many have low fees or no fees at all, which makes it worth your while to invest as little as $20 or $30 at a time. Once you're in the plan, you don't even have to buy a full share, you can buy part of a share. That's because Drips allow you to purchase stock in fractional amounts. So if you want to spend $100 on Microsoft, you can do so no matter what the share price of Microsoft may be.
For example, if Microsoft is selling at $55 a share, you'll buy 1.82 shares of it with your $100. If the stock is selling at $125 a share, you'll get 0.8 shares of Microsoft. Do you get the picture?
