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To start investing, only a few bucks, not thousands, are needed

It doesn't take much.

Maybe you're nervous about the financial markets and looking to start small. Maybe you're aiming to help your children or grandchildren make their first investment. Maybe you're just out of college, with precious little cash to spare.

True, many brokerage firms and mutual funds now demand $2,000 or $3,000 to open an account. But you can get started with far less - by using one of these strategies.

Even if you don't have much to invest, you still want to be diversified, spreading your money across three key sectors: U.S. stocks, foreign shares and high-quality bonds.

But how can you get that sort of mix for a few hundred dollars? Consider buying exchange-traded index funds, or ETFs, through one of the low-cost Internet stock-purchasing services, such as www.buyandhold.com, www.foliofn.com, www.mystock fund.com and www.sharebuilder .com.

ETFs are mutual funds that trade on the stock market, just like any other share. You might tap into the three core sectors by buying, say, Vanguard Total Stock Market ETF, which tracks the U.S. stock market; iShares MSCI EAFE, which mimics foreign markets; and iShares Lehman Aggregate Bond.

One warning: The four stock-purchasing services don't all offer these ETFs, so you may have to substitute other funds. The services charge around $3 or $4 to purchase a stock, with lower prices available for more frequent buyers.

Looking for other low-minimum ways to buy individual stocks? A popular strategy is to use a company's dividend-reinvestment plan, or DRIP.

You first buy a few shares through a broker and then use those shares to enroll in a company's plan. Thereafter, not only are your dividends automatically reinvested in additional shares, but also you can send in monthly cash investments of as little as $25 or $50.

Problem is, acquiring the initial shares can be a costly and bothersome business. In response, some 400 U.S. companies will now sell you those first shares directly, with the required initial investment typically running around $250.

Many of these "no-load stocks" charge a slew of small but irritating fees. But there are some plans that remain relatively fee-friendly.

On that score, consider Becton Dickinson, Cash America, Emerson Electric, Entertainment Properties, Exxon Mobil, Kellogg, Lockheed Martin, Paychex, PepsiCo and Piedmont Natural Gas, suggests Charles Carlson, editor of DRIP Investor, a newsletter based in Hammond, Ind.

To balance out your portfolio, you will need bonds. For those, try TreasuryDirect, the government program for selling Treasury and savings bonds directly to the public without commissions.

To buy a Treasury bond, the minimum is $1,000, while a savings bond can be bought for as little as $25.

Treasury bonds should generate higher long-return returns than savings bonds. On the other hand, Treasuries kick off taxable interest each year, while savings bonds grow tax-deferred.

FAST FACTS

First steps

Here's how to start investing even if you're strapped for cash:

-Sidestep a mutual fund's investment minimum by committing to a $50 or $100 monthly automatic investment plan.

-Buy stocks through such low-cost services as www.buyandhold.com, www.foliofn.com, www. mystockfund.com and www.sharebuilder.com.

-Get a list of no-load stocks at www.dripinvestor.com.

-Buy bonds from Uncle Sam through www.treasurydirect.gov.

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