Today I want to share how you can buy stocks in your favorite companies like Amazon and Google “for cheap”, even when their stock prices have soared to over 1000 points per share.
Notice the air quotes on “for cheap” though.
If you’re just starting to get into personal investing or you’re currently running a dollar-cost averaging plan, then you likely won’t be able to include high-priced stocks into your portfolio because traditionally, you have to buy the full share.
As of this writing, one share of Amazon is $2,400.
Google is $1,400.
Tesla is $835.
And you can buy Warren Buffett’s very own Berkshire Hathaway for a mere $278,640 per share.
And if you can afford to buy a share of Berkshire Hathaway in your dollar-cost averaging investment plan, then I’m probably not the right person for you to watch.
Not being able to invest in these companies puts the average investor at a disadvantage and can even be discouraging when you’re first starting to invest.
The truth is that most people don’t want to put in the work to research a bunch of companies in-depth in order to invest in a company’s stock.
Yet we’re told to invest in companies that we believe in, especially for the long-run. But what if you believe in Google and Amazon, but you’re not even able to buy a share of their stock?
So then, is there a way for you to buy these stocks “cheaper”?
And the answer is…sort of.
Introducing fractional shares investing
There’s something called fractional investing and it allows you to buy partial shares of stocks.
So if you want to own a piece of the Amazon pie, you don’t have to shell out $2,400 per share anymore, but you can simply buy, for example, $5 worth.
Now, fractional investing works because the brokerages will buy the whole share of a stock and then divvy up its partial shares with their customers like you.
Brokerages created this because they want to encourage investing within the younger generations who may have a smaller bankroll to get into the game.
This means that you now have the ability to add shares of stocks from any publicly-traded company into your investment portfolio.
How to buy partial shares with as little as $1
So now let’s talk about how you can get started with fractional investing with as little as one buck.
One of the best user-experience designs I’ve encountered is with the Cash.app by Square.
The mobile interface is definitely not made for advanced trading or investing, but serious ease-of-use.
Once you download the app, you simply click into the Investing section, and under stocks, you can choose the company’s ticker to search.
I’ll show you an example with Amazon (AMZN).
Then you can see its historic returns based on the time period and when you’re ready, just hit Buy, choose either one-time purchase or a set frequency, and then check out.
I personally use the Cash.app so that’s the only reason why I can recommend it. If you’re interested in checking it out too, then you can grab a free $5 if you use my affiliate link by clicking here. Don’t forget to enter the referral code ‘BSHRGVH’ after you download to grab your $5 freebie.
The Cash.app is also great if you’re interested in buying Bitcoin and add crypto into your DCA process.
This whole process feels like e-commerce shopping, except you’re buying shares of a company, like a boss.
Other platforms to check out in your own research are stockpile.com and stashinvest.com.
One of the key things to look for when choosing the platform that fits your investing needs will be the fees, and the industry definitely has various business models around fees.
However, lucky for us, the financial industry has such a strong desire for attention from young investors that they’re making lots of features free for us.
In other words, we the consumers are evolving to be that beautiful woman at the bar who the rich older men are trying to buy drinks for.
For example, the Cash.app is “free to open, requires no minimum balance to maintain, and charges no commission fees” and you can get started for just one buck.
Stockpile.com is 99 cents per trade, has no monthly minimum or fees, and you can get started for $5.
Meanwhile, Stashinvest.com has monthly plans that vary between $1-9.
To make it easier for you, I’ve created a spreadsheet that includes important features of each fractional investing platform, and of course, its corresponding cost so click here to check it out.
Innovation is brewing within fractional investing
The feature of fractional investing is continuing to grow for brokerages because startup FinTech platforms continue to bring on new innovations, and big players are definitely getting in on the game as well.
For example, the Robinhood app is a perfect example of how its innovation is forcing traditional brokerages to evolve.
Robinhood is the pioneer of commission-free investing and it has forced traditional brokerages like Schwab to also go commission-free.
This is a big advantage for you as an investor because I remember always paying $7.95 per trade on Schwab. That fee can definitely eat into your profits, especially if you’re trading on a smaller account.
And of course, Robinhood is getting in on the fractional investing game. I did some digging and it looks like it’s progressively rolling out.
You can start for as low as $1 and request early access.
But it looks like 1.7MM people are before me.
However, it’s a good thing I’m already a member of Schwab because they just released fractional investing on their platform called Schwab Stock Slices, and you can start with just $5.
While the Cash.app is my top choice for simplicity’s sake, Schwab is my favorite overall brokerage.
The point of sharing these two is to show you that the financial tech industry is like Hungry Hungry Hippos and they’re competing like crazy to get your attention.
So as a consumer, this is your opportunity to compare all of the competitive platforms and choose the one that fits best for your investing strategy.
How Fractional Investing Helps Your Long-Term Future
Now, let’s start wrapping up this post about fractional investing, which as you’ve learned, gives you the opportunity to invest in any stock, even if the stock price is super high because you can buy partial shares.
And forgive me as I put on some ‘dad talk’ to close out.
It’s really important to think about your future, and that includes your financial future.
If you truly want to live the Freedom of Choice lifestyle that I share on my YouTube channel, then getting a handle on your financial discipline is super duper important.
The earlier you start saving and investing, the more your money can actually work for you because of time and its compounding benefits.
Becoming wealthy is rarely an overnight story like the media suggests. It takes time, patience, and discipline.
Your long-term future requires a commitment of taking action to turn your savings into something of value, which is investing, versus the majority of people who are typically just spending.
And platforms today make it easier than ever to invest automatically because of their dollar-cost averaging programs.
Dollar-cost averaging gives you a steady and automated approach to growing your wealth.
And now I’ll leave you with two quotes that have personally helped me a lot with curbing present temptations in exchange for future benefits.
The first is by Neal Maxwell and he said “Don’t give up what you want most for what you want now.”
And the second is by a Vietnamese monk named Thich Nhat Hanh and he said “If you take care of today, you don’t have to worry about tomorrow.”
Ultimately, why I take the time to produce the articles on this site and videos for my YouTube channel is to help you get informed so you can make the choices that fit your life best.
If this has been helpful for you, then please head over to my YouTube to Subscribe, and don’t forget to turn on the notifications if you don’t mind YouTube sending you updates as soon as I post new videos.
Until next time, here’s to you investing in your future and knowledge. I’ll see you soon.