Actually, if you are serious about investing, you can do it for as little as $50 a month. The magic term is “mutual funds”. Whereas many people play the individual stock game, which is about as arbitrary as picking horses at the local track, or put all of their retirement eggs into one basket by relying on their employer to provide them with free or reduced price stock (and end up with nothing when the company goes out of business, a la Enron), mutual funds offer you much more protection. A mutual fund portfolio is made up of stocks from several different companies and industries. Although some will tank occasionally, the overall value of the mutual fund will theoretically increase over time so long as 1) you are willing to stick it out over the various ups and downs throughout the years and 2) the portfolio manager knows what he or she is doing (and it’s a safe bet that even the greenest portfolio managers probably have much more training and experience at managing investments than you do).
Many banks offer programs of this sort to get customers to start investing in portfolios managed by them. This can be financially beneficial for both parties as you stand to gain thousands of dollars through reinvested dividends and higher mutual fund share prices over the years and the bank can in turn pool your invested money in with hundreds of other investors to generate even more revenue. The key thing to look for are “no-load funds.” No-load funds means that the bank pays for the operating expenses out of the overall return on the money not by charging you a separate fee. The bank is already making enough money off of your investments. You shouldn’t pay it a fee on top of that. Personally, I invest with USAA as it has a large range of no-load funds that vary in risk. Of course, they are limited to military members only so check with your local financial institution to see what it has available to you.
And if you are in the military, stay away from First Command or anybody else that operates like them. I was amazed how zealous they were in contacting me when I first became an officer. I wasn’t interested as I already had investments through USAA but I read a very eye-opening three page article in the New York Times online that outlined their business practices. Not only do they NOT offer no-load funds, they charge a 50% sales fee on everything you put into them for the first 3 years. At that rate, you would have to live to be very old indeed to ever see a return on your investment. Their investing schemes were so deceitful, they were fined $12 million in 2004 by the NASD. Companies like First Command generally only stay in business by preying on inexperienced investors (like service members for example) so make sure you do your research before you invest.
Oh, one more thing, stay away from annuities. They don’t pay out until you’re almost dead and they barely pay out then. The money you DON’T waste on them now will generate far more revenue long term than you will ever make back when they start to pay out shortly before you are too old and senile to care.