Monday, June 07, 2010

Anyone Can Buy Shares! Its Not Expensive or Elitist.

The other day at work I mentioned that I got a voucher in the mail for some free KFC, it had been years since I've tasted and I was moaning that the Potato and gravy wasn't as good as I remembered. Someone asked where the voucher came from and I mentioned that I was a shareholder and it came included in the annual report.
So one of my co-workers scoffed, "How can someone who claims to be poor own shares?"
While I do find our finances tight due to large mortgage repayments and child support this is no barrier to owning shares, its a lot cheaper than you think.

My Restaurant Brands shares were purchased for $304 dollars. (They are now worth $468 due to KFCs increased profitability woot!) You don't have to buy thousands of dollars worth however you can't buy just one share either. In New Zealand we have minimum buy numbers which mean depending on the value of the share you have to buy a certain amount.

Number of Units Price (both figures inclusive)
2,000 Where the price does not exceed 25 cents
1,000 Where the price exceeds 25 cents but does not exceed 50 cents
500 Where the price exceeds 50 cents but does not exceed $1.00
200 Where the price exceeds $1.00 but does not exceed $2.00
100 Where the price exceeds $2.00 but does not exceed $5.00
50 Where the price exceeds $5.00 but does not exceed $10.00
25 Where the price exceeds $10.00

The only problem with buy small amounts of shares is the brokerage fee. Minimum brokerage is around $30. If you only buy $200 worth of shares the brokerage is quite a high proportion of the investment. It takes a while for return on the investment to cover the cost of buying the shares. Some companies have a dividend reinvestment program, you dividends are automatically used to buy more shares at no cost to you. Currently my Auckland airport shares have this feature. Its the only good thing about them, under-performing bastards.
ASB and National Bank have very easy to use online share trading accounts. There is a very short learning curve and you can be buying shares online before you know it.


Nina said...

Firstly- you have weird, over-opinionated workmates!

Secondly- I find it really inspiring that you invest, and I loved this post. It is very helpful to poor saps like me that don't know anything about investing! Thanks!!

Thirdly- I haven't eaten potato and gravy since I did a one-night working stint at kfc when I was 16. It ruined everything...

Kellie said...

Wow, you are super grown up!!

I might have to look into this share malarky - I like free moneys!

Great blog post : )