Don’t Have Any Money To Start Investing?
I sometimes hear from folks that they would like to start investing but don’t have any money right now. It’s true that it takes money to make money, however you might be able to invest in dividend stocks without requiring any new money.
Do you currently have mutual funds in a registered account like an RRSP, 401(k), IRA, or an employer sponsored plan? If so, you could transfer those investments into an equivalent trading account. You need a trading account in order to buy and sell stocks. An RRSP, 401(k), or IRA trading account will also allow you to buy and sell stocks. By keeping the investments within the same type of account you will be able to transfer the investments over tax free.
To keep things simple lets take a look at George’s story. George doesn’t have any new money to invest, but he would like to start buying quality dividend paying stocks. George has been working for 5 years at the ABC Company and has accumulated $15,000 in his employer’s RRSP (similar to a 401k). Though his employer matches a percentage of George’s contributions into the retirement plan the investments have languished in poor (high fee) mutual funds.
After taking the Simply Investing Course George opens a registered (RRSP/401k) trading account at his favorite financial institution. He then fills out a transfer form, and his favorite institution handles everything, they instruct the employer’s plan to sell the mutual funds, and transfer the money to George’s new trading account. George can now begin investing in quality dividend paying stocks, all without putting up any new money for investing!
Every year, after George receives the employer contributions, he again fills out the transfer form and moves his money over to his trading account. George is now on the road to financial success!
Note: Please check with your plan adviser, financial adviser, or tax specialist to verify your local tax laws when transferring between registered accounts.
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