January 29, 2006

In my e-book, Starting to THINK BIG, I espouse saving regularly (even the smallest amount) just to get yourself into the habit and to make people realize that from small amounts fortunes can be made. The question I hear is, “What can you do with a small amount of cash?” Here’s a quick answer.

Open an account at your local bank. (Yes, I know that sounds a little too basic, but you have to start somewhere.) Look for a savings account offering a no minimum balance and no transaction fees. Once you have your direct deposit allotment moving regularly into this account, wait for an accumulation of whatever you are comfortable with and open an on line brokerage account. Some sites offer a very minimal start-up. One of these would be Sharebuilder.com. Sharebuilder does not have a minimum opening balance, but offers limited stock selection. This will probably be fine for most beginning investors. Sharebuilder also has a lot of educational opportunities – investment news etc. Of course, most brokerage firms offer these items. E*Trade offers a wider variety of stocks, but has a minimum investment requirement of $1,000.

As far as savings amounts, I would offer the following information. Even with only $100 per month, with the ‘magic’ of compound interest and a steady savings, after one year your investment will gain $60. This might not sound like a lot, but consistently investing that amount after 10 years you would have nearly $16,000. I am using a minimal interest rate of 5% annual. Try different savings rates and interest amounts at

About.com Compound Interest Calculator

I don’t like offering suggestions as to specific stocks, but if you really don’t have any idea where to put your money, I would suggest looking for a stable mutual fund using Morningstar.com, Vanguard.com or any of the “biggie” firms. Just type “mutual funds” in a search engine and many options will soon appear. More general information on mutual funds will be covered in next weeks e-mail.

Hope that helps, and keep those questions coming.

The columns, articles, message board posts and/or any other features provided on Wealth Training Source are provided for personal finance and investment information and are not to be construed as investment advice. Under no circumstances does the information in this content represent a recommendation to buy, sell or hold any security. The views and opinions expressed in an article or column are the author’s own and there is no implied endorsement by Robert Britt of any advice or trading strategy

copyright Robert E. Britt 2006