Investing $100 a month: the commission takes 10% before you even start

You want to start investing. You set aside $100 this month, you place your order, and your platform takes a $9.95 commission. You are left with $90.05 invested.

You have just lost 9.95% of your contribution before the market moved a hundredth of a point. No return makes that back in the first year. And if you do it again next month, you start losing 9.95% again.

The same money, three rhythms

The assumptions, written down so you can redo the maths: $100 a month for ten years, a gross return of 6% a year compounded monthly, a flat $9.95 commission per order. Nothing else changes — not the investment, not the risk.

You will have put in $12,000 of your own money in all three cases. Going from monthly to quarterly earns you $1,008 — you did not pick better investments, you did not take more risk. You placed 40 orders instead of 120.

Why the gap is so wide

Because a flat commission dilutes in one way only: by growing what it applies to. $9.95 on $100 is 9.95%. The same $9.95 on $300 is 3.32%. On $1,000, under 1%.

It is the exact opposite of a percentage fee, which costs you the same proportion whatever the amount. A flat fee punishes small amounts, and it punishes them in proportion to how small they are. That is arithmetic, and it is not negotiable.

What this calculation does not say

It does not tell you to wait indefinitely. Stacking up three months before investing is three months your money is not working — and that is already in the table: the quarterly column pays in later than the monthly one, and still wins. Beyond a quarter, the advantage turns around.

Nor does it say a commission-free platform is free. It is paid for elsewhere: a wider bid-ask spread, account fees, currency conversion. The only figure that settles it is the dollar total over twelve months, not the "$0" line on the pricing page.

And it assumes you buy the same thing with every order. If the commission pushes you into a single holding instead of several, you have swapped a cost for a risk — and risk does not show up on a statement.

And for you, what does that mean?

Take your last brokerage statement. Add up the commissions of the past twelve months, divide by what you contributed over the same period. That is your real cost of entry — the one no pricing page shows, because it depends on you and not on them.

Yoseri’s Investments page does that addition, source by source, and sets it against your return for the year.

Yoseri News is an educational publication. Nothing in this article is investment advice, a recommendation to buy or sell, or tax advice. Yoseri is registered as neither an adviser nor a dealer with any market authority.