From Fractional Shares to a Millionaire

Investing can be a daunting prospect, especially for those who feel like they don’t have enough money to start or are worried about timing the market. But the actual truth is, there are some key strategies and perspectives that can take the guesswork out of investing and make it accessible to everyone, regardless of their budget or experience level. Two of the most powerful tools in an investor’s toolkit are dollar cost averaging and fractional shares. I want us to explore the benefits of these strategies, how they work, and how you can use them to start investing today, with just $10 a week or even $10 a month. The hardest thing about accomplishing anything is just being able to start. So, this article is to encourage you to do just that.

“Every time you invest, you’re buying a piece of a business. The important thing is to have a philosophy.” — Warren Buffett

Dollar Cost Averaging

Dollar cost averaging is a simple but effective technique that can help investors take advantage of market volatility and reduce the risk of investing a lump sum at the wrong time. With dollar cost averaging, you invest a fixed amount of money at regular intervals, say $50 or $100 a month. This means that you’re buying shares when prices are low and hopefully fewer shares when prices are high. Over time, this approach can help smooth out the ups and downs of the market and lower your average cost per share.

The benefits of dollar cost averaging are many. For one, it takes the guesswork out of investing. By investing a fixed amount at regular intervals, you’re not trying to predict which way the market will move on any given day. You’re simply staying the course, regardless of short-term fluctuations. Additionally, by investing regularly, you can take advantage of the power of compounding, which can help your investments grow faster over time.

“The stock market is a device for transferring money from the impatient to the patient.” — Warren Buffett

Fractional Shares

Fractional shares are another powerful tool that can help investors make the most of their money. With fractional shares, you can buy a partial share of a stock or ETF. This means that you don’t need to have the full price of a share to invest. For example, if a stock is trading at $100 a share but you only have $50, you can still invest that money and own half a share. Fractional shares are particularly useful when combined with dollar cost averaging because it means you can fully invest your fixed amount each time, without having to wait until you have enough for a full share.

The benefits of fractional shares are pretty straightforward: they make investing more accessible and flexible. By removing the requirement to buy a full share, more investors can participate in the market, regardless of their budget or investment goals. Additionally, since fractional shares can be bought and sold like whole shares, investors have more control over their portfolio and can fine-tune their holdings more easily.

“The single greatest edge an investor can have is a long-term orientation.” — Seth Klarman

Starting Small

One of the biggest hurdles to investing for many people is the perception that they don’t have enough money to start. But the truth is, you can start investing with as little as $10 a week or even $10 a month. By using dollar cost averaging and fractional shares, you can build a portfolio over time, regardless of your budget or experience level. The key is to start small and stay committed for the long-term.

The benefits of starting small are many. For one, it helps investors overcome the inertia of inaction. By taking small but consistent steps, investors can build momentum and see their investments grow over time. Additionally, starting small can help investors build good habits that will serve them well in the future, such as discipline, patience, and a long-term orientation. One final perspective to think about is that starting small can help investors overcome the psychological barriers to investing, such as fear, uncertainty, and doubt.

At the end of the day, investing can be one of the most rewarding and empowering things you can do for yourself and your financial future. By using strategies like dollar cost averaging and fractional shares, you truly can take the guesswork out of investing. Whether you’re just starting out or have been investing for years, these tools can help you build a portfolio that reflects your goals, values, and risk tolerance. I cannot tell you how many people I have talked to who have postponed their investing journey simply because they did not feel like they had enough to start with. Investing isn’t only a “game” for the wealthy, but a way for the everyday American to grow their wealth and begin to take hold of their future.

This is not financial advice. For educational purposes only. Before making any financial decisions, consult with a professional.