Tax & Financial Tips Archive
[Back to Archive]


Date: August 12, 2011
Subject: How to Invest ... with Less Than $500

This is
G&G Associates
Tax & Financial Consulting Services

How to Invest in the Stock Market with Less Than $500

Karibu (Welcome) G&G Readers,

"I'm a college student. I want to start investing. I have $350 to start with. And I want to add $50 a month to my portfolio. What should I do?"

I get this question – or a variation of it – from a G&G Newsletter subscriber almost every other week.

The stock market is not friendly to investors with small amounts of capital. It's the fees. The cheapest brokers charge around $5-10 to place a trade. So, if you're placing trades with less than $500, you're losing at least 2% of your money every time you buy or sell.

In today's newsletter, I'll show you how to invest in the stock market without paying any broker fees or commissions. The low entry price of this strategy opens up the stock market to college students, children, beginners, and anyone else who has less than $500 to invest.

The wealthy can use this technique, too. It'll save hundreds of dollars in commissions each year. But more importantly, I know of no better way to compound wealth and generate income than this strategy outside of increasing your financial IQ.

Internal Sponsorship:

To become a member of the G&G Investment Society newsletter subscription to learn how to take advantage of some of my suggestions so you can protect your wealth and portfolio against a fallen dollar, send an e-mail to and/or visit our website at and click on the “Products & Services” link and we’ll get you signed up right away.


- 1 year subscription - $149
- 2 year subscription - $269
- Lifetime subscription - $699

*** Membership Guarantee *** If you don't make your money back from being a GGIS member by the end of your subscription...we'll refund 100% of your subscription fee back. That's how confident we are that this will be one of the best financial moves of your life.

So, Sign up today!!!


Most people don't know this, but many companies sell their stock direct to investors. Instead of buying stock through a broker – as you normally would – you contact the investor relations department of the company you want to invest in.

You tell investor relations how much stock you want to buy. Then you write them a check. They send you the stock or, if you prefer, they keep it for you in a segregated account under your name. It's that simple. And you often … don't pay a dime in fees!

Buying stock this way is like going to the Nike Factory Outlet to buy your sneakers instead of going to Foot Locker. You avoid paying a mark-up to the retailer – or, in this case, the stockbroker.

Financial planners call this strategy "direct investing," or DRIP investing. DRIP stands for "dividend reinvestment plan."

*** To read a more detailed article on DRIPs, visit G&G’s newsletter archive from the homepage of our website and check out the article “A Simple Strategy … Increase Your Returns by 926%, dated July 5, 2011.”

DRIPs have benefits besides no fees. They let you buy fractions of shares, in increments as small as $10. So you can set up a regular purchase plan that allows you to buy a little bit of stock on a set schedule.

For example, Johnson & Johnson's stock trades today at $64 per share. But that doesn't stop you setting up a plan to invest $25 per month in Johnson & Johnson's DRIP.

DRIPs can also reinvest your dividends automatically, and some of them let you put their stock in your IRA, which means you don't have to pay tax on dividend income. (Some companies even offer discounts to the market price of the stock.)

Not all companies offer DRIPs. But all the highest-quality dividend-paying stocks have them, including almost all blue-chip and large-cap stocks.

For me, this is what makes this strategy so appealing. Not only is it an extremely efficient way of investing, but you'll buy stock in companies like Microsoft, Proctor & Gamble, Coca-Cola, Altria, 3M, Pfizer and Conoco Phillips. These companies are among the strongest, most recession-resistant companies in the world, and they raise their dividends every year.

So with DRIPs, you can eliminate fees, invest money regularly, reinvest dividends, and put your money in the safest, most shareholder-friendly stocks in the market. Given enough time, it's the perfect recipe for compounding even a small amount of money into a fortune.

Take 3M for example. 3M, the maker of Scotch Tape and Post-It notes, is the star of the consumer-products industry. 3M is one of the strongest, safest, most profitable companies in the world.

Right now, 3M pays a 2.5% dividend. It has raised its dividend every year for the past 52 years. 3M's perpetually rising dividend makes it one of the greatest money-compounding vehicles of all time.

And through its DRIP, 3M will sell its stock to you with no fees, no matter where you live in the world, in amounts as little as $10 per transaction.

So let's assume a G&G reader (you) invested her/his $350 into 3M on January 1, 2011 using 3M's DRIP. She/he also signed up for automatic investments of $50 per month. We'll assume 3M continues to raise its dividend at the same rate it has raised it over the previous 10 years – 6.2% per year.

On January 1, 2030, you would have a position in 3M stock worth $22,009. And that's assuming 3M's stock doesn't appreciate in value at all over the next 20 years. The gains come entirely from investing a little bit every month… and reinvesting the growing dividend. It's an incredible path to wealth.
Hmmm … would this be a good idea for maybe a college fund or for a wedding fund for those dad’s like myself who might have to fork up for a wedding one day.

If you don't have much capital to invest with – or you love the idea of compounding the wealth you already have – get started with direct investing.

If you want to know how to implement a strategy or want to know what DRIPs we have on the GGIS portfolio and you are not already a GGIS Subscriber, what are you waiting on? See the quote below!

Sign up today!

As always…feel free to pass this information on to anyone you think is interested in increasing their tax & financial IQ.

If you need a one-on-one consultation to learn how to implement these investments or any other on the GGIS portfolio, feel free to contact me to setup an appointment.

If you missed any past G&G newsletters, click on link below for the archive:

Metta (Wishing You the Best)

Asar Gary Gray
Tax & Financial Consultant, RFC
G&G Associates
757-251-0174 office
866-361-3872 toll free fax

Become a Fan of G&G Associates and G&G Travel on Facebook.

“Investing is much like gambling. But, the difference is that with knowledge in investing you can at least increase your odds of winning.”
J. Carter

P.S. If you are looking to Travel and looking for steep discounted travel, visit, click on the “G&G Travel” link and let your travel planning begin. Let us know where you want to go and we’ll do our best to find you the best deal your money can buy. Become a Fan of G&G Travel on Facebook.

LEGAL NOTICE: This work is based on SEC filings, current events, interviews, corporate press releases and what I've learned as a financial consultant. Nothing herein should be considered personalized investment advice. It may contain errors and you shouldn't make any investment decision based solely on what you read here. It's your money and your responsibility.


Tax & Financial Tips Archive
[Back to Archive]