… I have a recommendation for you. Not a stock, ick, I trust the market to routinely beat the bejeezus out of my picks. Instead, I’m going to recommend a way to save a few tens of dollars on your commissions, because I’m taking advantage of it myself and thought I’d spread the wealth.

Since I’ve got a rather small portfolio I use ShareBuilder, since their $4 a trade pricing and “You can only buy stocks at one pre-defined opportunity per week” model made a lot of sense for regular investments at a low dollar level (I’ve been dumping $200 a month into them the last several months — thank you, bingo cards). Anyhow, now that I’m paid off with my student loan debt (thank you, bingo cards — saved me about two months worth of my usual outsized payment) I’ll be increasing my monthly investment to somewhere in the $600 neighborhood, and I was thinking of doing some diversification away from just my one index fund ETF. So I was looking at their $12 a month Standard pricing scheme, which is essentially $12 for 6 stock buys at the same once-per-week restriction as usual. $12 also happens to be 2% of $600, and 2% is the Motley Fool’s recommended ceiling on how much you should ever pay for transaction costs.

However, I’m a cheap penny-pincher, and I intend to continue using Sharebuilder for some time yet. So I took advantage of their Christmas offer (probably good until sometime in January) to get a year’s worth of Standard pricing for $99 + $5 shipping, in the form of a gift certificate. (Incidentally: $5 shipping on a gift certificate is something I would never, ever do. It costs you a postage stamp plus a trivial amount of labor. ) Which saves you $40 over the course of the year.

Why trouble myself with even thinking about $40? Well, contribute the extra $40 at a 9% rate of return for 40 years, and when I’m ready to retire thats $1,256 or so.  $1,256 is worth a few minutes of my time.

I only wish they had a way to sign up for this pricing on their website, since that would eliminate the $5 shipping charge AND be a heck of a lot easier. I think I can understand why they don’t offer that, though: their service is naturally very sticky (who wants to have to change brokers after you have an account with one? Its $50 to get your stock shipped over, can potentially have negative tax consequences if you have to sell your fractional shares, and is a big hassle) and they want the $40 of revenue they’re giving up hook a new person on investing with them rather than just replacing revenue from a customer who would be using them anyhow (*cough* me). This is very different than most software subscription models, where the software is not sticky and the price differential rewards the customer partly with reduced card processing charges and partially compensates them for promising not to cancel. For example, MMORPGs like WoW love customers who subscribe for a year at a time because their customers typically churn out within a year. Speaking of which, since I never play it anymore I should cancel WoW sometime…

Two notes: If you’re not already a sharebuilder subscriber, sign up through ebates and get $25 free. I did, worked fabulously.

Second, the standard disclaimer: Periodically I plug folks on this blog because I use their products myself and like them, and think other folks might be able to use them as well. I don’t get or really want anything in return for doing it.