Updated November 10, 2009.
Jonathan at MyMoneyBlog tipped me off to a deal at ShareBuilder, an online brokerage that lets customers invest small amounts with a low fee structure.
I didn’t qualify for Jonathan’s CostCo discount as I’m not a member of the shopping club. It did inspire me to perform a Google site search in attempt to find other available offers.
The half minute of research work paid off; I found a $50 bonus deal available to everyone, using the code a code that is no longer available, but you can take advantage of a $25 bonus deal using the code 25WCFA. My plan is to invest $50 of my money (minus the $4 transaction fee) in an exchange-traded fund. I chose IYZ, a telecommunications sector fund with a 0.60% expense ratio and a relatively large dividend. When I receive the $50 bonus a few weeks, I’ll simply transfer it back to my checking account. Those dividends, by the way, are automatically reinvested in the fund at no extra cost.
Net expense for the investment to my cash flow: $4.
I chose the telecommunications sector because I believe it’s underpriced compared to the rest of the market right now and I think it will continue going up. I’m not a financial adviser, so don’t blame me if you follow my example and lose money.
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Update: I received this email, so it looks like the promo is definitely legitimate:
Actual cost: $4 plus taxes on $50 of interest income. I think that’s how it’s characterized by ShareBuilder. It’s still a warm deal, just not as good as it first looks, especially considering the cost of selling the shares…
ShareBuilder does have a high fee for selling shares. I’ll most likely hold onto those shares for as long as possible before selling.
Update: The $50 has been funded.
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