Investment is far beyond the glamorous movie scenes where people wearing suits discuss millions of dollars on a round table. You don’t need to be an experienced trader or a CEO of a huge company to start investing. Even if you have your savings from the last skip on Starbucks or a month of cutting on your metro charges, you can put the money at work.
But is it difficult? Of course not! Thanks to digital advancement, you can invest from the comfort of your couch. Automated investment is a thing that allows you to invest and keep track of your money while you see it grow with time. From stock trading apps to Robo-advisors, you have access to your portfolio at your fingertips.
1. Start Small with A Cookie Jar Saving Habit
Investments and savings are the members of the same family. No matter how superior investment is, saving money comes first in the journey of investment. Start small by saving just $10 a week in a jar, shoe box, envelope, or jewelry box. It might sound like a tiny saving plan, but over a year, you’ll end up saving $500. This little habit of savings can give you huge returns in the long run.
Another alternative to cookie jar saving is an online savings account. The account is separate from your debit card account and is easy to maintain. Keep on adding small weekly or monthly amounts, and when your savings are big enough, you can withdraw them in two business days and invest the money at various places.
All you have to do is start now with an amount as low as $10. Whether you decide to cut on your outdoor meals or a movie theater plan, cultivate a habit of saving each penny to invest big in the future.
2. Low-Investment Mutual Funds
If you are new to investment, you might have heard a lot about mutual funds, stocks, and bonds. It allows you to put your money in a portfolio with just a single transaction. The downside is that it requires around $500 to $5000 initial investment. It isn’t profitable for first-time investors.
However, you can look for mutual fund companies that charge low initial payments, usually $50 to $100 a month. These investments are automatic and are best for beginners. You can also set the automation through your payroll, just like a retirement plan.
3. Retirement Plan Investment
You might have seen companies offering a 401(k) plan along with health insurance to their employees. Investing in an employer’s retirement plan can help stay financially strong post-retirement.
You can invest as low as 1% of your salary into your retirement plan. This investment can easily be increased with time, depending on your income and savings.
4. Investing In the Stock Market with Little Money
Do you think it takes a lot of money to invest in the stock market? Let’s debunk this myth for you. Thanks to the internet, you can start with as little as $1 when buying stocks. It’s a game-changer for young investors who have just started their journey of making money with money.
You can also invest in penny stocks — tiny stocks with low investment rates, usually below $1. These stocks have a high-risk factor but having someone to guide you can help you make a high profit on high risk. Experts at pennystocks.today say that it’s crucial to keep track of every ticker in the stock market. You can follow popular influencers or stock traders on social media in order to stay updated with the market.
Put a small amount and learn the good and bad of investing. The risk will be low, and so will be the profit, but you will learn the dark and bright side of investing before making a big commitment. Gone are the days when stockbrokers charged a big chunk of commissions in stock investment. Look for platforms that charge zero commission fees.
You don’t have to put all your money in a single share. If you want to buy stocks of a huge company, like Apple, instead of purchasing a complete share, put a few dollars on a fraction of it. Being able to invest in big and small companies and buying stocks can help you grow your portfolio and generate better returns in the future.
5. Utilize Your Robo-Advisor
If you are a beginner in investment, you can find assistance in Robo-advisors. They have been helping people invest over the past ten years, making investment easy and accessible.
These advisors invest your money on your behalf once they understand your risk tolerance and investment goal. If you are thinking of building a diverse portfolio, reach out to a Robo-advisor to guide you better. Be it using algorithms for a smart investment or optimizing portfolios for taxes, Robo-advisors will do the things for you.
You can invest just $500 or less via a Robo-advisor with a nominal fee depending on the type and size of your portfolio. The plans are usually automated with great returns. The cost charged by Robo-advisors can go up to $25 annually. It might not look like a huge amount, but it can add up to thousands of dollars within years.
The fee you pay to your Robo-advisor is additional to that of the exchange-traded funds (ETFs) you invest in. If you build your own ETF portfolio, you can skip the fee charged by Robo-advisors. However, it will add up a lot of extra work and responsibility.
6. Real Estate Crowdfunding
No, you are no longer required to invest thousands of dollars in real estate. Thanks to real estate crowdfunding, now you can own parts of shares of different properties without having to spend a fortune.
The minimum investment required in crowdfunding for real estate is $5,000. The risk factor involved is huge, but owning a part of land or property can enhance your portfolio.
Just like Robo-advisors, you will have to pay additional charges via crowdfunding investment. However, you are free from hectic paperwork and property maintenance. Besides, you’ll share the cost and risk with other investors.
We hope these tips give you a fair idea of how and where you can invest your little savings. The key is to save every single penny and put it in various investment plans. Every penny counts! That being said, you should start investing your savings for better returns.