We all have heard it is smart to invest in the stock market. The problem is so few of us actually know much about it. That is why I decided to write this to tell you how to spend the extra $100 you wrestled from the couch cushions this month.

First off, I want to prove my opening statement. From the early 1900’s to today the market has averaged a 13% annual increase. Similar statistics show the dollar bill has lost 95% of its spending power. To put that into different terms: In 1919 one share of Coca-Cola cost $40. If you decided to take $40 and bury it in the yard, the spending power of that cash would be $2. Instead if you took that cash and bought one share of Coca-Cola, today it would be worth over $5 million, if you reinvested the dividends. Hmmm…tough decision.

With that out of the way, onto the application. Some people buy shares of certain stocks because their online broker requires them to. Example: you want to invest in Amazon and it is trading at $74.15 a share. You have $100 to invest. Your company will only allow you to buy a whole share costing $74.15 plus a $9.99 fee. That leaves you with $15.86 left over doing nothing for you. In time you will build up enough extra cash this way to buy another whole stock…in time.

The problem with this is that you are not investing to your full potential when you buy whole shares of stock. In an ideal world you could buy “fractional” stocks. Example: that same $100 would buy you 1.213 shares of Amazon. That extra .213 of a share is working for you and not rotting away in an account somewhere. Obviously, this is the best way.

Sharebuilder.com is the only online trading company I know of that will allow you to buy fractional stocks. On top of that, if you set up an automatic investing plan, trades are only $4 opposed to the standard $9.99! Finally, a company that cares about us.

Stop reading this right now. Go and set up an account. Invest a dollar amount, NOT a set number of whole shares each month. GO!!