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Is it possible to buy small amounts of shares?

Q. I was wondering if it is possible to buy small amounts of shares. I have about $50 per week of spare cash instead of spending it on some ridiculous item I don’t need is there a way I could buy or invest that $50 per week?

Thanks Jacquie

Answer

Great question Jacquie. One of the best investment actions I ever took was starting a $200 per month contribution into a BT Managed Fund way back in the 1990’s. It’s amazing how it grew over time and it allowed me to buy my first house. But the benefit was twofold – not only did it give me equity to put into the property, but also got me into the habit of saving and spending less than I earned. This meant that I felt confident I could afford the mortgage repayments for the loan required to finance the balance of the house purchase.

Unfortunately $50 is not enough to buy shares directly – the ASX rules specify that the smallest trade on the stock market is $500. But don’t be put off – there are other ways to get exposure to shares on a regular basis with small amounts of money.

For example, managed funds are unitised investments where you pool your money with lots of other investors, engaging an investment manager to choice the shares or other investments on your behalf. You own units in the fund which gives you a proportional exposure to the underlying investments. So your $50 investment can be buying you a little bit of BHP or CBA each week.

There are many good quality managed funds which offer savings plan functionality, usually with a minimum initial investment of between $2,000 and $5,000.
The other place to get exposure to shares with small amounts of money is in your super fund. Nearly all funds offer a ‘shares’ investment option and by contributing your spare cash either by additional salary sacrifice or after tax non-concessional contributions, you will not only be getting exposure to growth assets, but also creating great long term tax efficiency.

Regardless of the option you choose, the most powerful action is to automate. It moves saving from the conscious part of your brain which requires on-going willpower (which is exhausting – literally!) and once set up you can forget about it and let the magic of compounding take over.

Good luck and enjoy taking control of your money!

Catherine Robson and Affinity Private are representatives of and offer our services on behalf of Apogee Financial Planning Limited  ABN 28 056 426 932 Australian Financial Services & Credit Licence No: 230689. Registered Office 105–153 Miller Street North Sydney NSW 2060.

Catherine Robson and Affinity Private have not taken into account any particular persons objectives, financial situation or needs. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain financial advice specific to their situation before making any financial investment or insurance decision.  The information in this document reflects our understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way.

Q. I was wondering if it is possible to buy small amounts of shares. I have about $50 per week of spare cash instead of spending it on some ridiculous item I don’t need is there a way I could buy or invest that $50 per week?

Thanks Jacquie

Answer

Great question Jacquie. One of the best investment actions I ever took was starting a $200 per month contribution into a BT Managed Fund way back in the 1990’s. It’s amazing how it grew over time and it allowed me to buy my first house. But the benefit was twofold – not only did it give me equity to put into the property, but also got me into the habit of saving and spending less than I earned. This meant that I felt confident I could afford the mortgage repayments for the loan required to finance the balance of the house purchase.

Unfortunately $50 is not enough to buy shares directly – the ASX rules specify that the smallest trade on the stock market is $500. But don’t be put off – there are other ways to get exposure to shares on a regular basis with small amounts of money.

For example, managed funds are unitised investments where you pool your money with lots of other investors, engaging an investment manager to choice the shares or other investments on your behalf. You own units in the fund which gives you a proportional exposure to the underlying investments. So your $50 investment can be buying you a little bit of BHP or CBA each week.

There are many good quality managed funds which offer savings plan functionality, usually with a minimum initial investment of between $2,000 and $5,000.
The other place to get exposure to shares with small amounts of money is in your super fund. Nearly all funds offer a ‘shares’ investment option and by contributing your spare cash either by additional salary sacrifice or after tax non-concessional contributions, you will not only be getting exposure to growth assets, but also creating great long term tax efficiency.

Regardless of the option you choose, the most powerful action is to automate. It moves saving from the conscious part of your brain which requires on-going willpower (which is exhausting – literally!) and once set up you can forget about it and let the magic of compounding take over.

Good luck and enjoy taking control of your money!

Catherine Robson and Affinity Private are representatives of and offer our services on behalf of Apogee Financial Planning Limited  ABN 28 056 426 932 Australian Financial Services & Credit Licence No: 230689. Registered Office 105–153 Miller Street North Sydney NSW 2060.

Catherine Robson and Affinity Private have not taken into account any particular persons objectives, financial situation or needs. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain financial advice specific to their situation before making any financial investment or insurance decision.  The information in this document reflects our understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way.

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