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If you are a low income person, you may have been discouraged about investing. Get yourself on your feet financially first, then worry about investing, people tell you. But as you grow older you begin to be aware that not investing will guarantee that you will be in poverty in your old age. So what should you do?

Traditionally investing in stocks has been hard for the low income person. You have to find a broker, and then you are usually to buy one hundred shares of a stock as a minimum. How long do you have to save up to buy a hundred shares of stock? If you are like me, forever! As the money accumulates in your savings, you find more and more urgent uses for it, and before long, it's gone with little to show for it.

The internet age has provided an answer for the low income investor- the online, low cost broker. My own favorite, and the one I use, is Sharebuilder (http://www.sharebuilder.com Sharebuilder allows you to buy stocks by the dollar amount rather than by shares or multiples of one hundred shares. You may invest monthly or weekly- or every other month, or whenever you can afford it. You can invest fifty, one hundred or two hundred in a stock every month or week. An automatic investment trade costs only $4.00 at this time. To save money on these fees, it's best to buy two hundred dollars worth of stock per trade, but you are not require to.

In addition to low cost stock investing, Sharebuilder provides you with a money market account. This is where you store your money until the automatic investing day rolls around, but you can also put money you save in this account to draw interest from it.

When you only have a small amount of money to invest, it's very important to pick good solid stocks instead of gambling on risky ones. Sharebuilder provides tools to help you research stocks, and it's very important to use them before selecting your stocks.

You might choose to do your investing in dividend stocks. Dividend stocks earn you money in two ways. One, like any stock, the price may go up so that when you come to sell it, you make a profit. Two, a dividend stock pays a dividend, usually four times a year. This means that even if your stock doesn't go up, you derive benefit from owning it. Sharebuilder allows you to automatically reinvest your dividends in the stock that produced those dividends at no extra charge.

To find some good dividend stocks, you might turn to Dividend.com (http://www.dividend.com which evaluates all the dividend stocks and makes recommendations. How accurate are their recommendations? Well, for some time now, McDonald's stock has been their number one dividend stock. And McDonald's has been doing notably well during the current bear market (Nov. 2008).

In order to have the funds to invest, it helps to do what you can to lower your expenses. One of the worst expenses you can have is credit card debt or other high interest debt. Most advisors recommend that you don't even begin to invest in stock until you have paid off all your high interest debt. This is good advice- though if your mountain of debt is fairly high you may want to do a little investing just in order to make you feel there is light at the end of your financial tunnel.

One problem with investing is that the taxes you pay on your dividends and stock profits are high, and likely to go higher in an Obama administration. If you qualify, you might wish to make your Sharebuilder account an IRA account because of the tax savings.

Investing is important for the low income person because it gives you the chance to not be low income for the rest of your life. It will help you provide for yourself in your retirement years, or in case you become disabled. And Sharebuilder, along with other low cost internet brokers, makes investing easier.

Learn more about this author, Nissa Annakindt.
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