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How Much Money is Needed to Start Investing?

Updated: Jun 29

Let’s dive right in on things.  In this article, I will answer the question, “How much money do I need to start investing?” I remember struggling with this question. In fact, almost every new investor thinks that they don't have enough money to start investing. They often times view their account size as insignificant because it doesn't compare to the wealth of the Elon Musk's and Warren Buffet's of the investing world. I'm here to tell you that comparisons like those aren't fair to you. Whatever amount of money you do have is significant and has the power to change your life.

 

Before I answer that question in detail let me tell you a story about how I began investing. 

 

How I Started Investing

My “career” in the stock market started out as nothing more than a mental break from studying while in medical school. I have “Dr” in front of my name because I ultimately graduated medical school.  I mention this for two reasons:


  1. I am not a professional investment advisor.  In fact, I never took any financial courses after high school.  These articles are for entertainment purposes only.  Before you trade real money, make sure you understand what you are doing and are comfortable with the risks involved. All investments carry some degree of risk!

  2. I started trading as a side gig and after a learning curve, I can say that I am a consistently profitable options trader and stock investor.  I also currently have a full time W2 job, as a civilian Medical Resident, and continue to trade.  It doesn’t take that much time!

 

During my study breaks, I found that learning about various investing strategies challenged me in ways medicine didn’t.  I quickly realized that throughout any day the stock market was open, literally trillions of dollars are traded.  After a lot of reading, mostly in 15-20 minute chunks, I saw a path towards collecting my very small portion of that money. I just needed to get into the game.



If you have the desire to start “working” for yourself and to take active ownership of your financial future, then you must learn how to invest.  Financial institutions want to make it seem more complicated than it is.  They earn their fee by taking the “burden” of your financial future off your shoulders.  Now that transaction fees are exceedingly low, and often non-existent, managing your money just takes a little thought and a few clicks of a mouse.

 

One of the big things we aim to provide at GKT is value to you.  Although it took me hours upon hours of reading articles and books, we want to streamline that process for you.  It took me all that time because there are thousands of people out there with their own opinions and methods of the best way to invest and I wanted to read all of it.  Honestly, a lot of it was time wasted. Over time, I learned several simple strategies that lead to consistent profits.  Join our Free Discord and you can see for yourself how we trade.  There’s no more sales pitch.  No credit card required.  It is literally free.

 

My First Investment in the Stock Market

There I was, sitting at a med school library table on August 20, 2013.  In those days it took half a pot of coffee just to get out of bed and the other half to stay awake long enough to memorize whatever I was studying.  No one can study continuously for hours on end day after day.  During my breaks, I read stock articles. 

 

Long story short, I knew I didn’t have time to day trade.  I also mistakenly believed options were “too risky.”  I eventually became interested in dividend growth investing which relied upon the power of compounding.  Once I narrowed my focus to dividend companies, Wisconsin Energy Corporation (WEC) caught my attention.  Stable industry, regular increases in dividend payments, and a long track record of paying them all made this stock interesting to me. 

 

On that life changing day in August, I set up an account with Computershare.com because it only required an initial purchase of $250 and they didn’t charge transaction fees. In 2013, EVERYONE was charging transaction fees of at least $10 to buy and $10 to sell any amount of shares. So finding this free service made things possible. Today, you can do this same thing in any maker broker.


I also signed up for $25 monthly recurring investments in WEC.  Though this startup cost was a stretch, I was able to fit it into my budget.  That $250 bought me 5.976072 shares of WEC.  Two months of automatic investments later, I put in a total of $300 and I received my first dividend check for $2.75!



If you've ever found money on the ground, you know how I felt in that moment. I was literally over-the-moon kind of happy. This tiny dividend represented my first steps towards financial freedom. 


My investment strategy relied upon compounding interest, so I signed up for the automatic dividend reinvestment plan which was also free.  That $2.75 bought me another 0.066209 shares!  I still have my first stock spreadsheets where I kept meticulous records. 


 

Because I was investing regularly, each subsequent dividend check was bigger than the one before it. Keep in mind the time requirement of this strategy. Once I set up my account, I did absolutely nothing and I was making money.

 

How Much Money do I Need to Start Investing?

Start investing with what you can afford.  I started with $250 and that earned me $2.75 after 3 months.  That isn’t a get rich quick type of money and I’m not here to convince you that it is.  What I am trying to convey to you is that no matter how much money you have, start with what you can afford to lose. 

 

Here at GKT we are VERY transparent.  In the name of transparency, let me break it to you now, you will make mistakes in your investing journey.  You will have to learn some lessons the hard way and you will lose money.  I know this because I made MANY mistakes which caused me to lose money.  I survived and so will you.

 

When you start your investing journey, start so small that if you lost everything you’d still sleep fine at night.  Make your mistakes when your account is easily replenished.  If I lost $250, I may have had to use store brand coffee instead of Folger’s for a while, but I would have made it.

 

The Outcome of my WEC Investment

My first quarterly dividend with WEC was $0.3825/share.  At the time of writing this article, WEC $0.835/share every quarter, or 218% more.   I've also invested more money throughout the years and the dividend checks have grown to a meaningful amount. Don't scoff small beginnings.


You Can do This Too

I share this story to say that you can absolutely do this too.  Investing in yourself and in your future can change your life.  You must take active ownership of the process.  Start small with money you can afford to lose.  A $2.75 dividend check wasn’t a large amount of money then and it isn’t now.   The incalculable value of that $2.75 came from the knowledge that I too could earn money in the stock market.   You don’t have to do this alone.  Join GKT and start your investing journey today!


Disclaimer: this is NOT financial advice. I’m basically just some dude on the internet who’s been trading a while, and I use the stock market to generate income as my side gig. None of this is financial advice it’s purely educational!

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