Fractional Investing is not something new, especially in the USA where it has been practiced for a long period of time. If you are an investor & you plan to buy Berkshire Hathaway Class A stocks, it costs you USD491,000 (as of my writing) to buy 1 unit. With Fractional Investing, you can buy as low as 0.01 units of Berkshire Hathaway stocks which cost you USD4,910. Another example we can look into is Tesla stocks where the current trading price is USD167.98. To buy it using Fractional Investing, I can purchase 0.01 units with USD1.68.

As a Malaysian investor, I have been investing in local Malaysian stocks & their minimum purchase is usually 1 lot (100 units). To buy the most expensive stock in Malaysia which is Malaysian Pacific Industries (MPI), their current trading price is at RM27.50 per unit. Since the minimum buy is 1 lot (100 units), my minimum purchase is RM2,750 for 1 lot. That is the difference between investing in the USA with Fractional Investing vs investing in Malaysia with a minimum of 1 lot investment.

Fractional Investing is making investing affordable for many investors. Recently in Malaysia, RakutenTrade has introduced Fractional Investing to Malaysians. This was after their announcement of lowering their brokerage fees. Right after the announcement, I switched my SPLG ETF investment from FSMOne to RakutenTrade to enjoy lower brokerage fees from USD 8.80 to RM1-RM9 (depending on the trading value). That is a huge discount compared to the amount I used to invest with FSMOne. In the past, I will only invest every 6 months for my SPLG ETF investment due to high brokerage fees where I will purchase a minimum of 6 units due to high brokerage fees. With RakutenTrade’s lower brokerage fees, I can invest on a monthly basis.

Aside from being able to invest frequently due to lower brokerage fees, I can also utilize their Fractional Investing to purchase stocks that cost for than USD100-USD1,000 where I can purchase fractional stocks from 0.01-0.1 units. It is a bonus for local Malaysian investors that wants to invest in USA stocks or ETFs.

You can refer below guide on how to trade with RakutenTrade.

You can use my referral link to earn 1,000 RT points. Those points can be used for your brokerage fee rebate for all your trading.

OSS!

You can also check out my latest YouTube video on Why Do You Need Financial Planning?