Last week, I decided to take advantage of the ability to acquire $75 for opening an account with ShareBuilder. My first trade will be executed today. Rather than purchasing an exchange-traded fund (ETF) like last time, I decided to go with a well-established stock. My order was placed for $70 worth of Microsoft (MSFT). While Microsoft has already seen what will likely be its steepest climb (from 1986 to 2000), I think the company has lasting power.
I’ll need lasting power when investing with ShareBuilder. Their sales fees necessitate holding onto your investment for a long time in order to keep your returns. With the “Basic Plan,” which charges no annual fee, an investor must pay a transaction fee of $15.95 to sell any holding. That will quickly eat away your returns if your initial investment is a small amount, like mine. This doesn’t bother me much, as I am investing with “free money” as a result of these multiple promotions.
I’ve already received the $5 ebates sign-up bonus. The money is in my ebates account and is not yet cash. I cannot convert the ebates points to cash until I receive the ebates $20 bonus which should happen in the next few weeks. I should also shortly receive the $50 ShareBuilder bonus for using the promotion code ENTERTAIN50. (March 12, 2009 update: The current bonus promotional code is 25WOLS.) The total cash received will be $75, and the expense to execute the trade was $4, leaving me with $71.
I could have avoided the $4 trading fee by accepting the “Standard Plan” trial offer. This was presented as an option when I signed up for the account through ebates. This would have required me to remember to cancel the free trial before my first month would have ended.
Updated September 2, 2011 and originally published August 15, 2006.