I put a small amount of money each month into a fractional share app. However, I have no idea what I am doing so I am just saving money or losing money. So thank you for the simple explanation!!!!
I bought one share in ten companies. Then I purchased the share certificate for those ten companies. That share certificate really just opens an account with the companies broker. The company had to offer stock purchase plans with DRIPs. For the last ten years any money I contribute to the company, the whole amount goes to purchasing shares. No transaction costs. Probably got maybe 5 more years till I could potentially live of the dividends these companies payout. That’s the plan. Never sell, just enjoy the passive cash flow:).
I'm new to stocks but yours is the best strategy I've come across. Did you purchase the Share Certificate directly through the company? or through the broker you purchased the stock from?
@joed7185 I used a broker. They told me that it would cost $50 + GST. I'm Canadian. I said no problem. The certificate came in the mail. I use two transfer agents for my 10 stocks. TSX Trust Company Computershare The companies you pick need to have an SPP (Stock Purchase Plan) and a DRIP plan, and then you are off to the races. Lol.
I do...I liked, I subscribed. I saw a well known lawyer say webull or wellbull is a good fractional share app/platform. Do you think it is? Should I start another app with a bit of money on another app? How do I know if I'm making anything? I'll watch your next video
Fractional shares is almost like an index fund basically correct? I think full shares force you to invest more money! Full shares technically are better!
Fractional shares get listed as WHOLE SHARES in 1099 forms on M1Finance and Robinhood. So let's say the investor invested/cost $1,000 in a $10 stock, then he had profit/proceeds of $2000. $1,000 profit. The 1099 lists the stock as $10 stock with cost of $10,000 with proceeds of $20,000. Profit of $10,000! Your thoughts, feedback please. Thank you.
Hi Charlie, thanks for your detailed comments! Though I'm afraid I have little to no knowledge at all on the tax reporting in the US? All I can say is its much simpler in HK, no capital gains tax here. But I do here that many stock investors do get tripped up in tax season in America, especially others who are fairly new to the market.
I have a question so this is what it says on my account, Equities that do not support fractional shares are not eligible 4 divident reinvestment So do I have to own the hole shares to have liquidity and get to reinvest that money? Because the few cents I got of liquidity I dont see what happened after
Abit lost so if you buy a fractional share how will it become a full share. This is all new to me . Do you just buy more fractional shares to complete a full share im confused.
My post was not clear. What I want to say is that the 1099 form reflect the WHOLE SHARE prices, costs, proceeds. Thus, an investor with $1000 in total account value gets reported as, for example, having an account with $20,000 value! It's distorted! Not accurate for tax purposes.
Thanks Charlie, if its really like that then it definitely is super distorted. Though on face value, this kind of representation of the tax position, doesn't seem to make sense at all? Is there some other filing form? Again, I've got 0 knowledge on the 1099 tax form.
You can brokers like Fidelity, Sofi, Robinhood, Charles Schwab all offer fractional trading... they all differ slightly though (e.g. what shares you can fractionally trade)
I have a question about transferring fractional shares. I use Welthsimple and before you transfer you need to sell the fractional shares. My question is what do the mean by that. For example let's say place a fractional order of $1000 in a stock and now own 5.2 share. I understand to transfer to another institution I need to sell 0.2 shares so Ill have 5. But what if I buy 0.5 of a share today, then another 0.5 of a share next week (now I have 1 share) and I wanna transfer. Do I still need to sell them? Or not since the "total shares" adds to one? Thanks!
Not sure about wealthsimple unfortunately but I suspect you need to make sure it’s a “round” total number to move it around. But then again, i have not used wealthsimple before.
just watched your other video about ETFs vs Index Funds. I understand what their differences are but I am having trouble applying the principles from this video and the other one together. My question would be what is the most effective way to be a fractional investor in ETFs vs Index funds? My guess is ETFs are better because of the ability to trade like normal stocks. There are other points I would want to make on why I think ETF > IF but it boils down to the fees types. Applying the fee information is where I lose track of it in my head but I feel like there is a breakthrough I could reach.
Hi Tonio, thanks for the questions. Correct me if I am misunderstanding your question, so the "effective" way to be a fractional investor, if you are focused on flexibility, then fractional investing with ETFs would be the better option. As you can go in/out as you need, or if you want to "change" to another alternative ETF. The IF, is slower, in this sense. And for the fees, both are actually quite competitive nowadays, unless you go really exotic strategies. However, if you are trading short term, those fees really don't matter as much. But if invest for the long term, then that will compound over time, then you'll need to pay attention to those fees.
@@UpDive8 You understood correctly. If I understand correctly, as primarily a long term investor, fractional investing in ETFs is cautioned because of the fees? That is not easy to take because what I am really interested in is determining a viable way to apply the core and satellite strategy to my fractional investing. For example, I would have a core set of fractionally invested ETFs that serve long term and a satellite set of fractionally invested shares in selected stocks that serve short term. Pursing this strategy would allow me to accomplish my goal of gaining experience as both a short term and long term investor simultaneously on a budget. So, if this seems viable, what criteria should I follow when looking for long term ETFs (or perhaps groups of ETFs that take care of different sectors) while also preventing overdiversification and sinking in fees? Does what I choose even matter that much because its fractional? Or should I ignore this strategy completely and just stick to being either a short term or long term fractional investor?
I think that is a good idea for get some experience, you can then even take note and compare how you perform on the short-term investing vs long-term investing. For the long term ETFs, if you are choosing a group ETFs, I'll take a quick look at the their top 10 compositions (all should have that constituent holding information on their website) so you don't have too much overlap. Different named/themed ETFs could still be holding similar stocks (e.g. big ones like Amazon) but just in different weights. I think it will still matter even if its fractional, not because of the $ amount, but because you want to keep track and learn. And I think a sensible rule of thumb would be, if you don't have time at all in the markets, stick with long term investing. Short term is hard, personally something I am very bad at. 😅
For fractional share purchasing of ETFs, these are the investing platforms that allow it: - Fidelity - M1 Finance - SoFi - Interactive Brokers Light - Webull - Public - Dough - Robinhood
How sad that our younger generations have to end up with fractional shares in order to invest. It’s the markets way to squeeze out the last penny out of young retail investors and leave them with nothing when the market crashes…probably won’t even get enough money to buy groceries
If there was no fractional share investing, I would have probably waited another ten years to start.
Glad that you’ve started!
I put a small amount of money each month into a fractional share app. However, I have no idea what I am doing so I am just saving money or losing money. So thank you for the simple explanation!!!!
Keep adding money to different ETFs or stocks and that way youll see it grow, keep in kind there is always risk when investing in stocks
Wow! This is an excellent video that gives me a lot of very helpful information! Thanks and please keep up the good work!
Thanks Matthew! Glad it helped 😄 and appreciate the encouragement
The nice thing about my shares, I do have that voting ability.
I bought one share in ten companies. Then I purchased the share certificate for those ten companies. That share certificate really just opens an account with the companies broker. The company had to offer stock purchase plans with DRIPs. For the last ten years any money I contribute to the company, the whole amount goes to purchasing shares. No transaction costs. Probably got maybe 5 more years till I could potentially live of the dividends these companies payout. That’s the plan. Never sell, just enjoy the passive cash flow:).
I'm new to stocks but yours is the best strategy I've come across. Did you purchase the Share Certificate directly through the company? or through the broker you purchased the stock from?
@joed7185 I used a broker. They told me that it would cost $50 + GST. I'm Canadian. I said no problem. The certificate came in the mail. I use two transfer agents for my 10 stocks.
TSX Trust Company
Computershare
The companies you pick need to have an SPP (Stock Purchase Plan) and a DRIP plan, and then you are off to the races. Lol.
learn so much knowledge is power thank you so much
Thanks for watching!
I do...I liked, I subscribed. I saw a well known lawyer say webull or wellbull is a good fractional share app/platform. Do you think it is? Should I start another app with a bit of money on another app? How do I know if I'm making anything? I'll watch your next video
Fractional shares is almost like an index fund basically correct? I think full shares force you to invest more money! Full shares technically are better!
Fractional shares get listed as WHOLE SHARES in 1099 forms on M1Finance and Robinhood. So let's say the investor invested/cost $1,000 in a $10 stock, then he had profit/proceeds of $2000. $1,000 profit. The 1099 lists the stock as $10 stock with cost of $10,000 with proceeds of $20,000. Profit of $10,000! Your thoughts, feedback please. Thank you.
Hi Charlie, thanks for your detailed comments! Though I'm afraid I have little to no knowledge at all on the tax reporting in the US? All I can say is its much simpler in HK, no capital gains tax here. But I do here that many stock investors do get tripped up in tax season in America, especially others who are fairly new to the market.
didn't know share transfer of fractional shares were impossible. Thanks for the tip!
Happy to help!
Thanks so much. Its very informative.
Thanks for the nice comments… hope it was helpful 😄
I have a question so this is what it says on my account,
Equities that do not support fractional shares are not eligible 4 divident reinvestment
So do I have to own the hole shares to have liquidity and get to reinvest that money?
Because the few cents I got of liquidity I dont see what happened after
We need more of this
Thanks Christian! Feel free to check out my other explainer videos if you need to.
Abit lost so if you buy a fractional share how will it become a full share. This is all new to me . Do you just buy more fractional shares to complete a full share im confused.
My post was not clear. What I want to say is that the 1099 form reflect the WHOLE SHARE prices, costs, proceeds. Thus, an investor with $1000 in total account value gets reported as, for example, having an account with $20,000 value! It's distorted! Not accurate for tax purposes.
Thanks Charlie, if its really like that then it definitely is super distorted. Though on face value, this kind of representation of the tax position, doesn't seem to make sense at all? Is there some other filing form? Again, I've got 0 knowledge on the 1099 tax form.
Which platform allows fractional trading?
You can brokers like Fidelity, Sofi, Robinhood, Charles Schwab all offer fractional trading... they all differ slightly though (e.g. what shares you can fractionally trade)
Superb!!!
Thanks 😄
Can buying fractional shares lead to full shares?
That will depend on your broker, though generally yes. 😊
I have a question about transferring fractional shares. I use Welthsimple and before you transfer you need to sell the fractional shares. My question is what do the mean by that. For example let's say place a fractional order of $1000 in a stock and now own 5.2 share. I understand to transfer to another institution I need to sell 0.2 shares so Ill have 5. But what if I buy 0.5 of a share today, then another 0.5 of a share next week (now I have 1 share) and I wanna transfer. Do I still need to sell them? Or not since the "total shares" adds to one? Thanks!
Not sure about wealthsimple unfortunately but I suspect you need to make sure it’s a “round” total number to move it around. But then again, i have not used wealthsimple before.
Is there any broker that has fractional shares that can be automatically purchased every month?
Robinhood should have that function, you can checkout “recurring investment”.
Stash is the best for that
Very helpful
Glad it helped 😄
"Watch this video here" and no video or link appears to look at. Please add the Mario Bros death jingle soundeffect here. 😢
just watched your other video about ETFs vs Index Funds. I understand what their differences are but I am having trouble applying the principles from this video and the other one together. My question would be what is the most effective way to be a fractional investor in ETFs vs Index funds? My guess is ETFs are better because of the ability to trade like normal stocks. There are other points I would want to make on why I think ETF > IF but it boils down to the fees types. Applying the fee information is where I lose track of it in my head but I feel like there is a breakthrough I could reach.
Hi Tonio, thanks for the questions. Correct me if I am misunderstanding your question, so the "effective" way to be a fractional investor, if you are focused on flexibility, then fractional investing with ETFs would be the better option. As you can go in/out as you need, or if you want to "change" to another alternative ETF. The IF, is slower, in this sense. And for the fees, both are actually quite competitive nowadays, unless you go really exotic strategies. However, if you are trading short term, those fees really don't matter as much. But if invest for the long term, then that will compound over time, then you'll need to pay attention to those fees.
@@UpDive8 You understood correctly. If I understand correctly, as primarily a long term investor, fractional investing in ETFs is cautioned because of the fees? That is not easy to take because what I am really interested in is determining a viable way to apply the core and satellite strategy to my fractional investing. For example, I would have a core set of fractionally invested ETFs that serve long term and a satellite set of fractionally invested shares in selected stocks that serve short term. Pursing this strategy would allow me to accomplish my goal of gaining experience as both a short term and long term investor simultaneously on a budget. So, if this seems viable, what criteria should I follow when looking for long term ETFs (or perhaps groups of ETFs that take care of different sectors) while also preventing overdiversification and sinking in fees? Does what I choose even matter that much because its fractional? Or should I ignore this strategy completely and just stick to being either a short term or long term fractional investor?
I think that is a good idea for get some experience, you can then even take note and compare how you perform on the short-term investing vs long-term investing. For the long term ETFs, if you are choosing a group ETFs, I'll take a quick look at the their top 10 compositions (all should have that constituent holding information on their website) so you don't have too much overlap. Different named/themed ETFs could still be holding similar stocks (e.g. big ones like Amazon) but just in different weights. I think it will still matter even if its fractional, not because of the $ amount, but because you want to keep track and learn. And I think a sensible rule of thumb would be, if you don't have time at all in the markets, stick with long term investing. Short term is hard, personally something I am very bad at. 😅
Good info What brokerage firms offer fractional shares of ETFs?
Think companies like Charles Schwab, Fidelity and Interactivebrokers all offer it.
For fractional share purchasing of ETFs, these are the investing platforms that allow it:
- Fidelity
- M1 Finance
- SoFi
- Interactive Brokers Light
- Webull
- Public
- Dough
- Robinhood
@@akin242002 Excellent You Rock the Casbah!
Thanks @Mr. Berry 😄
Sofi and robinhood
How sad that our younger generations have to end up with fractional shares in order to invest. It’s the markets way to squeeze out the last penny out of young retail investors and leave them with nothing when the market crashes…probably won’t even get enough money to buy groceries
Kinda is sad. There’s also this unsaid envy with company CEOs to have higher and higher priced shares. They’ve got Berkshire envy.
I havent aclue to what im doin
You’re one of the brave ones. I’m sure there’s tons of people in the market who don’t know they don’t have a clue. 😁