One of the biggest myths about stocks is the belief that they are only for the rich. That may have been true just a few years ago, but now sensible stock investing is accessible to everyone, and at prices that should actually be feasible for everyone.
In the early days of the stock market, accessing the capital markets wasn’t easy: you couldn’t just log into your securities account online and buy a stock with just a few clicks. You had to instruct your broker (by phone), who then executed the order live on the floor. Whether the trade could actually be executed at the desired price was sometimes only known days later. In addition, this service represented a large expenditure and thus caused high costs, with which the course to the stock exchange was actually profitable only for wealthy people, since the transaction costs with view of the deposit amounted to much in percentage terms. Still one should always keep an eye on the fees, they have in the long run nevertheless large effects on the performance and thus the increase in value.
Easy availability, more competition
Since the Internet, but especially since the competition from neo-brokers has become stronger, trading fees have reduced significantly in recent years – the options have become more diverse. When I started investing, I still had to pay 9.90 euros for a trade plus a stock exchange fee of usually about 2.90 euros. So, in order to only get to 1% fees, you had to put at least 1,280 euros in your hand. After all, there were already savings plans that allowed automated fractions at fixed fees of 1.5%.
With the neo-brokers such as Trade Republic* or Scalable Capital* came once again significantly movement in the market. These two brokers allow stock trading at prices as low as one euro, making even smaller sums profitable. But that’s not all: Some of these brokers offer savings plans completely free of charge, starting at a savings amount of just one euro. So if you want to invest broadly in an ETF, you can start with just one euro at Scalable Capital. At Trade Republic, the minimum amount is 10 euros, which should also be feasible for many people.
It should still be a bit more
Whether it makes sense to save just one or 10 euros a month based on shares is certainly another matter. I recommend that younger people always start with 100 euros and increase the savings rate continuously over time. That way, you benefit the most from the compound interest effect and don’t have to worry about your pension anymore. The older you are, the higher the savings amount should be, but the more likely you are to receive a larger salary.
Conclusion: If you want to invest in shares, you don’t need a huge amount of money or have to be excessively wealthy. From as little as one euro a month, you can invest your money wisely in the stock market. You just have to do it and want to 😉
Keyfacts:
- if you invest wisely in stocks, you don’t have to be wealthy
- thanks to the internet and competition on the market the fees became more and more attractive
- you can start with just one Euro per month
- if you want to provide for your old age, you should invest higher sums.
