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How to Invest in Stocks without a Broker

Mark Flynn

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If you’re looking to invest, you’re taking a big step in the right direction in terms of securing your financial future. However, that doesn’t mean it’s going to be easy. Long before you actually purchase your first share, there’s plenty that needs to be done. One area most people need to tackle is finding the right broker before they can start making purchases. Fortunately, if you wish to bypass this step, you have other options available. Keep reading to learn about three of them.

Why You’d Want to Skip a Broker

There are a number of reasons it’s preferable to trade with a broker. The main two, however, is that trading with one can provide you with a lot of free and helpful information and research. However, the other reason is that it’s almost impossible not to. The below three methods are just about the only ways that will work.

Go Right to the Source

Many companies are happy to get rid of the middle man in order to offer shares straight to the people looking to purchase them. Walt Disney is just one example of a major corporation that participate in purchasing plans like this. Most companies, however, do have a minimum deposit you must make initially in order to make this worth their while. But you can find plenty of corporations who will drop this requirement if you agree to have automatic withdraws taken from your account each month in order to purchase shares in the company.

Dividend Reinvestment Plan

Not all companies will have direct stock purchasing options like in the above example. However, many will have Dividend Reinvestment Plans you can participate in. Known as DRIPs, these are a great way of investing in a company without the help, or overhead, of a broker. But that’s not the only benefit at play

DRIPs also have what is known as a cash investment option. This means you can send a check for at least a minimum amount (usually no more than $25) and the person in charge of the company’s DRIPs will buy extra shares on your behalf. The only catch is that you need to first own a share in the company before you start doing this. There are a number of services online you can use in order to find companies that offer Dividend Reinvestment Plans.

Buying Single Shares

There are a number of companies out there that will allow you to purchase a single share of stock in a number of different corporations. This may seem like a silly way to spend your money, but keep the above example in mind. With just a single share, you can now qualify for DRIPs without spending a lot of money. The whole process will take only a few minutes and then you can start buying more shares in that company without paying a broker.

While there is nothing wrong with using a broker to make your trades, it simply isn’t necessary. If you master the above three methods then you have already learned how to invest in stocks without a broker.


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