Starter Tips on Investment Even When You Only Have Little Money
The word investment may seem a tad overwhelming and intimidating for some. Many would think of investing as something only done by men in suits—those who know a lot about big numbers and have a long list of credentials to back them up.
That is why many think of investment as a responsibility that should only be undertaken by individuals with big money.
But this is not true. In fact, investing is for everyone. Not just for those who have big sums of money in their bank accounts. Even people who have little money can try their hand in investing. Success in investing all comes down to the right strategy and mindset.
Here are seven simple yet effective ways one can start growing an investment even with little money
Start with your trusty piggy bank
Every one of us was taught during childhood to save money for the rainy days. As kids, we were taught how to save by keeping money in our trusty piggy banks and cookie jars. Be it for emergency purposes or just to have extra cash to pull out when you’re low on money to pay for your electricity bills—everyone was taught to set aside money. The thing about stowing money in a piggy bank or a cookie jar is that you need not confine yourself with just one. In fact, you can have as many jars as you can for specific purposes. Do you want to set aside money for a nice family vacation abroad? Do you plan on buying a new car in two years? Or are you planning to take up online classes and need money for enrollment? Having different jars lets you see your plans and priorities. Of course, when your money gets bigger, you’ll need to transfer them to your bank.
You can open an online savings account or choose accounts that have nice interest rates. This way, you can grow your money over time.
Hire an adviser to handle your money for you
If you are busy making money working from a full-time job and your sideline, you can hire someone to do the investing for you. Ever heard or robo-advisers? You can avail of the services of a robo-adviser who will do all the grueling investment planning for you and make your money grow. All you have to do is pay them an ample monthly fee, answer a few questions about your plans and priorities, and they’ll handle all the money management tasks you simply don’t have time for.
Consider investing in the stock market
People are often intimidated by entering the stock market because of the large money required to enter it. But times have changed. Today, the stock market is open for anyone willing to invest their hard-earned cash. In fact, one can start trying their luck on the stock market with just $1, investing with no trade commissions to think about.
Of course, when you grow your money in time, you need to hire a financial advisor or a broker to help you out.
Try real estate crowdfunding
Investing in real estate used to require large sums of money. But today, with the advent of real estate crowdfunding, it is now possible for multiple investors to own shares in large properties without anyone being the sole landlord.
Compared to robo-advisors, however, crowdfunded real estate investments may require the investors to risk a larger amount of money. The risk might also entail having to make an investment in one property rather than on a diversified portfolio. The only advantage of this is that the investor can actually see the investment as it is not in the stock market. However, it is highly encouraged to just have real estate investment as a side investment and not put all your money into it.
Employers usually include benefit packages in the retirement plans of their employees. This type of plan can actually be put into investments. Many people can invest 1% of their salary in their employer’s plan. One may stary with 1 percent and increase it to 2 percent in the following years, depending on your annual raise.
Invest on mutual funds
Another way of growing your investment is through mutual funds. These are investment securities that allows one to put their money in a diverse portfolio of stocks and bonds with a single transaction.
However, some mutual funds need $500 and $5,000 as minimum investments. If you have little money at hand, you may opt for mutual funds companies who can waive the minimum investment requirement in exchange for automatic investments of $50 and $100.
Consider Treasury securities
Much has been said about Treasury securities. It has been known that Treasury securities do not really make investors that rich. But it can be the perfect place to park your little money and earn some interest over time. When the time comes that you are ready to be a big investor, you can get your money and take on another investment with a higher return.
Material based from Finance Train