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View Full Version : Best and cheap way to buy one share of stock



Dave Lehnert
10-17-2007, 9:03 PM
Want to buy one share of stock to get into a DRIP. What is the best way to do this?

Jake Helmboldt
10-17-2007, 9:48 PM
Sharebuilder is probably the cheapest way. But why one share? There are certain economies of scale in finance that mean you really need to at least invest enough to justify the cost of doing so, not to mention build wealth. Unless you are buying one share from the "Oracle of Omaha" (Berkshire Hathaway).

Dave Lehnert
10-17-2007, 10:33 PM
Sharebuilder is probably the cheapest way. But why one share? There are certain economies of scale in finance that mean you really need to at least invest enough to justify the cost of doing so, not to mention build wealth. Unless you are buying one share from the "Oracle of Omaha" (Berkshire Hathaway).

One share gets you on the books with the company so you may buy future shares direct from them without going through a broker.

Greg Funk
10-17-2007, 10:35 PM
In Canada you just phone your broker and ask them to enroll your shares in a DRIP program if the company has one. I don't understand why you need to buy one share. Any dividends reinvested are not subject to brokerage fees so there is no reason to deal directly with the company.

Greg

Dave Lehnert
10-17-2007, 11:36 PM
In Canada you just phone your broker and ask them to enroll your shares in a DRIP program if the company has one. I don't understand why you need to buy one share. Any dividends reinvested are not subject to brokerage fees so there is no reason to deal directly with the company.

Greg

Greg thanks for your message.

I need to buy one share because I do not own any shares in the stock I am looking to purchase. You buy one share through a Broker (or any other cheaper way. The reason for my question) then after your first purchase you can buy as many shares as you wish directly through the company for a very small fee (at times only $1.00) compared to $50.00 as some of the big brokers charge. Now this is a little different than some companies. Some companies let you buy your first share direct from them. Just happens the stock I am looking at does not offer this. You must own one share (to be on the books) before you can purchase direct from them.

mark page
10-18-2007, 8:39 AM
Check into "Firstrade" website. It has been a long time since I purchased stock through them but think that it had a $6.00 charge per transaction.

Mark Rios
10-18-2007, 10:14 AM
I dated the office manager for a brokerage house when my son was a toddler (15 years ago) and she encouraged me to buy one share of Disney stock and ask for the actual piece of paper, the actual paper stock. Disney paper has a bunch of the Disney characters on it and we framed it and hung it in his room. I've since purchased more Disney stock but that one framed share (now 3 because of a split) is still hanging on his wall.

Anyway, I don't remember paying anything extra for the stock. It was selling for around $45 per share and I remember paying what the value was that day. My point.....date a broker.:D

Jesse Cloud
10-18-2007, 10:57 AM
Another reason for one share of stock is that many corps offer bennies to shareholders. I don't know if they still do, but Marriott used to have a nice shareholder's discount...

Pat Germain
10-18-2007, 1:45 PM
FYI, Disney no longer offers any benefits to stockholders because so many people were getting them by owning only one share.

What's a DRIP?

Jake Helmboldt
10-18-2007, 10:53 PM
DRIP = Dividend Reinvestment Plan.

All dividends are directed back into the account to purchase more shares rather than paid out to the shareholder.

My original comment still stands; if you buy one share or 100, discount brokers will often charge a flat rate for the transaction, so buying one share doesn't make any real sense when for the same fee you can buy as many as you want, thereby making the cost per share negligible.

There are also often strings attached to Direct Stock Plans (buying from the company). With so many discount brokers and cheap fees I don't see the benefit, though I haven't looked into any particular side benefits of a particular company (and many don't offer DSP). But that's just me.

Dave Lehnert
10-19-2007, 12:34 AM
Buying more than one share at first would be the way to go “IF” you had the money to do it. Buying directly through the company allows you to buy as little as $10.00 a month (depending on the company) to build wealth over time. You also can buy fractional shares this way so all your money is working for you. Something you can’t do buying through a broker.

This ,like anything, is just one way to do it. Some ways are better than others for each individual.

Jake Helmboldt
10-20-2007, 10:01 AM
Sharebuilder actually lets you do the same thing (fractional shares). I suggest making sure the fees and "strings attached" (if any) with the particular direct purchase plan are palatable. Otherwise the Sharebuilder option might be a better option. Also, w/ Sharebuilder you are not limited to the relatively small pool of companies that offer direct purchase plans.

Regardless of the choice though, you're farther ahead of most Americans as we have an abysmally low savings and investing rate.

Pat Germain
10-20-2007, 1:52 PM
Regardless of the choice though, you're farther ahead of most Americans as we have an abysmally low savings and investing rate.

I heard a financial consultant dispute that recently. He said our savings and investments could be a lot better, but whenever "experts" talk about savings, they don't count 401Ks. Since many, many people have their money in a 401K, ignoring this investment vehicle paints a very inaccurate picture.

The way I see it, why should I put my money in a savings account where it will earn under 2% and then get taxed at the end of the year? I think it's no wonder Americans don't put their money into savings accounts.

Al Wasser
10-20-2007, 2:19 PM
Buying from the co. direct may not give you a free ride on the DRIP. I dripped Texaco (now Chevron) many yrs. The DRIP was handled by a 3rd party that charged something like $3 per quarterly transaction. I eventually moved to my brokerage account (Schwab) and there was no charge. I would check with local brokers and see what services they offer, especially the discount brokers. They will only charge you $10 or so for the initial transaction of one or a few shares and reinvestment may be free. Realize that if this is not in a tax free account, eventually you will have fun figuring out the cost basis when the time comes to sell, so keep good records