How much does it cost to invest in shares?

The rundown

  • Investing in real estate should be considered a medium to long-term investment due to the costs involved.
  • When investing in shares, investors may be charged brokerage fees by share trading brokers. It is the fee charged by online brokers for facilitating the buying or selling of shares.

How much does it cost to invest?

By understanding the costs of investing, you’ll have a better idea of how much money you can make from an investment. Here’s a snapshot of some common types of investments and what you’ll need to get started.

The cost of investing in real estate

  1. Your deposit: Generally, you’ll need a 10% to 20% cash deposit to buy your first home or investment property. So, if a house is $800,000, you’d need up to $160,000.
  2. Hidden costs: When buying or selling property, you may also have costs to pay like real estate agent commission, property inspections and stamp duty.

Real estate prices can rise and fall so it’s a good idea to think of property as a medium-to long-term investment.

Learn more about building a property portfolio >

The cost of investing in shares

  1. The starting investment amount will vary according to the type of account you open, but as a guide, the minimum investment for a CommSec Share Trading Account is $500.
  2. Almost all brokers charge a brokerage fee regardless of whether they take orders over the phone, or via an online trading platform like CommSec. Generally, the more you invest, the smaller the brokerage fee as a percentage of your investment.

Learn more about CommSec’s rates and fees >

What is brokerage?

A brokerage fee is the fee paid to CommSec for facilitating the buying and selling of shares. This fee is applied to each executed trade, whether you are buying or selling shares.

 

Why are brokerage fees important?

You need to factor in brokerage fees when you calculate your returns. Here's a simple example:

Let's say you buy $1,000 worth of shares and sell them a year later. You pay two $5 brokerage fees (one to buy and one to sell), which equals 1% of your investment. This means you need to make a total return (through capital gains and any dividends) of over 1% before you start to profit.

 

Some other costs include:

When investing in shares, there are several other costs that new investors should be aware of:

  • Inactivity fees: Some brokers may charge an inactivity fee if you do not regularly transact on your account.
  • Currency conversion fees: If you are trading in international markets, you may incur currency conversion fees when converting your money to the currency of the market you are trading in.
  • Management fees: If you invest in managed funds or ETFs, there may be management fees charged by the fund managers.
  • Tax implications: Depending on your country of residence, you may be subject to capital gains tax on any profits you make from selling shares. Additionally, dividends received may also be subject to tax.
Next >
< Go back

CommSec Learn is intended to provide general information of an educational nature only. Any securities or prices used in the examples given are for illustrative purposes only and should not be considered as a recommendation to buy, sell or hold. Past performance is not indicative of future performance. Investing carries risk.

Any securities or prices used in the examples given are for illustrative purposes only and should not be considered as a recommendation to buy, sell or hold. Past performance is not indicative of future performance. Investing carries risk.  

© Commonwealth Securities Limited ABN 60 067 254 399 AFSL 238814 (CommSec) is a wholly owned but non-guaranteed subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945. CommSec is a Market Participant of ASX Limited and Cboe Australia Pty Limited, a Clearing Participant of ASX Clear Pty Limited and a Settlement Participant of ASX Settlement Pty Limited.

The information on this page has been prepared without taking into account your objectives, financial situation or needs. For this reason, any individual should, before acting on this information, consider the appropriateness of the information, having regards to their objectives, financial situation or needs, and, if necessary, seek appropriate professional advice.

CommSec does not give any representation or warranty as to the accuracy, reliability or completeness of any content on this page, including any third party sourced data, nor does it accept liability for any errors or omissions.
Top