News Column

It's Your Money: $100 Can Go a Long Way

July 23, 2007

By Rick Munarriz

Rick Munarriz
Rick Munarriz

I have never warmed up to the theatrical portrayals of investors. Sometimes we're played out to be money-grubbing sycophants, hoping to make a buck on insider information like "Wall Street's" Gordon Gekko. Other times we're seen as presumptuous speculators, belittling the less fortunate like commodity trading brothers Randolph and Mortimer Duke in "Trading Places."

I'm not one to argue over the merits of "greed is good" as a lifestyle mantra. I just don't think you have to be some ultra-rich, Ayn Rand disciple to embrace the opportunities of capital appreciation in the stock market.

I'm not alone. Wall Street is getting more accessible with every passing generation. You no longer need Armani suits or designer dresses to walk into your broker's office to mean business. In fact, many of the leading discount brokers prefer to deal with you through online trading platforms where you can buy and sell stocks, bonds, and options in the comfort of your own bathrobe and bunny slippers.

For those uncomfortable with self-directed investments, brokers and mutual fund families are also reaching out to wider audiences with low minimums on their managed mutual funds.

Earlier this year, discount broker Charles Schwab lowered the minimum initial investment in its proprietary SchwabFunds mutual funds to just $100. Think about that for a second. For just a hundred bucks you can buy into a basket of stocks, hand-picked by seasoned money managers.

Mutual funds aren't free. We've covered that before. However, with the typical SchwabFund product covered by management fees below 1 percent, we're talking about less than a buck to manage that $100 investment over the course of a year. It's hard to beat that. When you think about it, the management fee is probably even less than the Schwab overhead in mailing out your quarterly statements.

Sure, Schwab is hoping that it can lure entry-level investors with the low minimums. If its aim is true, those same investors will eventually entrust the popular discount broker with more of their savings.

Schwab isn't the only one peddling no-load mutual funds with low minimums. Excelsior, the fund family behind the popular Excelsior Value & Restructuring Fund, lets investors get in with just a $500 initial investment. The Nicholas family of managed stock funds will also take you in with a $500 outlay. Some funds will even let you in with less, as long as you agree to have a set amount -- roughly $50 or more -- automatically invested into the fund in subsequent months.

So what are you waiting for? There are more mutual funds than there are actual stocks to buy into these days, but most funds offer instant diversification with nary a cover charge.

Hollywood can keep the Dukes and the Gekkos. We all know that ordinary folks like you and me can be investors too. Now you just have one less excuse to stay away.

Rick Munarriz is a personal finance columnist for He has written for sites such as The Motley Fool and Citysearch and has appeared on NPR, TechTV, and CNN en Espaņol. He can be reached through where he discusses his latest articles.

Source: (c) 2007. All rights reserved.

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