How do you get into stocks when you're broke!?

Question

Are there any friendly stock brokers out there that would like to lead me in the right path?

Answer 1

I'm not a broker, but if you are broke you don't need one. There is an old expression that applies, "It takes money to make money." Now if you are thinking that you will buy something cheap and it fly into really big numbers--those things, searched at random such as what you will do, are as rare as winning lottery tickets.

Save your money. If your employer offers a participating pension plan such as a 401K or SEP (Simple Employee Pension--an Individual Retirement Account, or IRA, under another name), then do that--especially if the employer is contributing because you get free money. In my case, if I contribute a maximum of 4 percent of my wage (and I do), then my employer contributes an additional 6 percent of my wage to my retirement plan. It is free money.

Otherwise, since you are broke, don't bother with stocks until you have some money above a reasonable savings amount, like a month or two or three of normal earnings.

Answer 2

You might want to develop your investing skills with "play" money - check out http://www.top10traders.com - this is a free site that lets you create a portfolio of stocks with $100,000 in "play" money. Each day the site ranks the best performing portfolios, so you can see how your picks perform compared to other investors. You can read posts on investing from the best traders, as well as share your own investing ideas. There is a charting feature, so you can see how your portfolio performs compared to the S&P 500. Also, you can create your own "group" so that you can see how you are doing compared to your friends.

Here are this month's best traders:

http://www.top10traders.com/Top10Standings.aspx

Good luck.

Answer 3

How do you buy anything if you're broke?

The best way is to open an account with Charles Schaub or E-Trade (for example) have a little taken from your paycheck every payday and when you have enough saves, invest wisely!

Answer 4

Sharebuilder (http://www.sharebuilder.com/) might be a good option for you. You can also look into a Dividend Reinvestment Plan (DRIP, http://www.investopedia.com/articles/02/011602.asp).

Answer 5

You don't.

Get out of debt first!