With £80 to spare every month, here's how I started buying shares

How much does it take to start buying stocks? £100,000? £1,000? £100? In fact, I think it is possible to go to the stock market even lower. Here's how I'd get started, at £80 a month.

Big start versus small start

£80 a month adds up to £960 a year. So, that would be close to £1,000 of investment per year, thanks to the simple discipline of regular, consistent savings.

There are some downsides to putting hundreds if not hundreds of thousands of pounds into the stock market. For example, small commissions or fees can add up to small amounts at a proportionally higher rate than when you invest large amounts. That's why it pays to take your time and carefully choose which sharing account is best for you. What is right for one investor may not be right for another.

But I also see the benefits of starting to invest on a small scale.

We all dream of hitting it big in the stock market, but in reality almost every investor I know has made mistakes along the way, some of them costly. So starting small can make that learning experience cheaper!

Good habits from day one

The approach I would take if I started buying shares is the one I would continue with. I stuck to areas I felt I understood when looking for companies to invest in.

I will also pay more attention to the measurement. A common mistake for beginners is to confuse the value of a company with the price of a share in that company. Having a good business and making a great investment are not the same. Paying too much per share can mean that a smart business is delivering poor returns.

But one thing I would do differently when I start investing, compared to later, would be even more risk-oriented. For mature investors, understanding risk is an important part of investing. But in the beginning, it can be very important as some dangers may not be visible to the novice.

Diversifying £80 a month can be more difficult than the big numbers, but it's possible – and I can use that strategy from day one.

Finding stocks to buy

Another easy way to get diversification is to buy an investment trust that itself invests in a number of different stocks. As an example, City of London Investment Trust (LSE: CTY) has a range of blue-chip companies, mainly from the London market.

it pays a dividend of 4.8%, which means if I invest £100 now I can hopefully get £4.80 each year in dividends. Dividends are not guaranteed, but the city of London has an impressive record of increasing its payout per share for 57 years.

The share price has also risen over the past five years, although only by 5%.

The trust's exposure to the UK means it could miss out on tech booms elsewhere and could suffer if Britain's weak economy drags on the company's earnings.

Having such a share would help me learn more about how markets work. I think it's worth considering for investors as they start buying stocks.