How Much Money Do You Need to Buy Stocks?

February 10, 2020

Most people today know that if they want to create a long-term strategy for improving their wealth, they can’t just leave their cash sitting in a bank account or under their mattress forever. The more you’re willing to take risks with your money through investments, the more you can build up new opportunities over the long-term. However, there’s still a lot of confusion in the industry about who can get involved with things like shares and stocks.

For instance, you might think that if you want to get your hands on the best stocks that your industry has to offer, you need to be willing to spend a fortune. In days gone by, only the biggest companies and investors could get involved with this market, because it was so difficult for anyone else to access the exchanges. However now, just about anyone can explore the benefits of trading with the assistance of a stock advisor.

How Much Do You Really Need?

The amount of cash you need to buy and sell securities in the current market will depend on your money-building strategy. For instance, if you’re planning on buying a few ETF’s and leaving them to gather money over the long-term, then you don’t need more than a few hundred dollars to start trading. The limitations on the amount of cash you need to have in your trading account increase depending on how regularly you want to buy and sell.

For instance, if you want to be a day trader, which means that you interact with the stock market on a daily basis – often buying and selling securities within a 24-hour period, then you will need a minimum of $25,000 in your trading account. On the other hand, if you just want to explore the basics of the market and you don’t have a lot of cash to spend, you can also explore things like penny stocks, which are the lowest-priced options in the industry. Remember, if you just want to begin learning about how to trade, you don’t necessarily need to spend any money at all. You can begin using demo accounts and paper trading accounts for free until you feel you have enough money to invest for real.

Planning your Budget

The easiest way to plan your budget for a successful trading lifestyle is to start by thinking about the kind of strategy that you want to use to build money. You can talk to a financial professional for advice in this area if you’re not sure about how much you need for your future goals. You should also spend some time listening to the opinions of experts in your area and check out the broker accounts that are available in your space.

Some broker accounts do come with minimums on the amount that you need to keep within your accounts to continue trading with the same supplier. However, there are also other trading platforms out there that allow you to get started with absolutely no minimum. Evaluating and comparing different platforms will help you to cut costs significantly.