Just because you don’t have buckets of spare money, doesn’t mean you can’t invest. Infact, quite the opposite.
A few dollars invested can go a long way!
Are you ready for a big secret?
One of the most important elements in making a return in the stock market is……TIME.
Yes, time. There is something called compound interest and to really make money investing you need to keep cash in the market.
Building wealth is created with good habits. An example of a good healthy habit is putting a little bit of money aside each month.
Now with that saving cash, you can begin investing.
Don’t let the word “investing” scare you off. Nowadays investing is as easy as a swipe on your smartphone. It truly is that easy!
We are going to show you how easy and fun it is to start investing with just a little bit of money.
Below are 4 straightforward ways to start your journey toward good healthy investing habits.
- Piggy Bank Technique
- IRA Accounts
- Investing in Real Estate
Let’s prepare for the future!
#1 Have You Heard of a Piggy Bank?
Putting aside spare change and actively saving money is a great start to good investing habits.
Saving money and investing aren’t so far apart from one another. In fact saving and having “side money” is the first step to investing.
If you’re not a saver putting aside money might sound difficult but it’s much easier than you think. Think about it like this, if you put $20 aside every week for a year you would have over $1000 of savings!
It’s a really good idea to get yourself into the habit of taking money out of your wallet and putting it somewhere. It doesn’t have to be an actual piggy bank, it could be a drawer, a jar or a saving app on your phone.
Getting into the habit of stashing away cash is a great way to save and is key in investing
#2 Invest With Robo-Advisors
Robo-advisors are digital investment platforms that provide automated algorithm-driven financial planning.
No prior investment knowledge is necessary when investing with a Robo-advisor and sign up is a breeze.
Robo-advisors build an investment portfolio based on your risk tolerance, that way you can invest passively. A big advantage of Robo-advisors is that their fees are low and you don’t need a lot of money to start.
Below are our top 2 choices:
Wealthfront is an impressive investment management firm that offers affordable diversification investment portfolios with top of the line planning tools.
What separates Wealthfront from the rest in the investment management industry is their Robo-advisory services.
Wealthfront believes in offering the best financial advisory services to those who would not have been able to afford it.
For more on Wealthfront, take a look at our Wealthfront review.
Betterment has become one of the leading Robo-advisors in the investment management field. They offer low-cost wealth advisory services and the latest strategy resources.
Betterment is not a traditional online broker. They help investors with their Robo-advisor services.
One of Betterment’s biggest advantages is that you can start investing with a little bit of money, their account minimum of $0! Just open an account and start investing.
Looking for more details on Betterment? Read our Betterment review.
If you’re looking for Robo advisory service with a low minimum balance, you can’t go wrong with either one of them. We wrote a more in-depth comparison, check it out, Wealthfront vs. Betterment.
#3 Set Up an Individual Retirement Account
An IRA is a tax-deferred savings account that gives investors a leg up when saving for retirement.
An IRA is ideal for those looking to save for retirement because your money grows and compounds faster than it would in a regular taxable account.
It is understood that you need a fair amount of capital to open an IRA. Thankfully for us, that’s not true!
The top IRA providers with low minimum balances are the following:
If you’re working for a company you should be set up with a proper 401(k). A 401(k) is a retirement account that is partially funded by your company and partially funded by you.
Although a 401(k) and an IRA are both retirement investment vehicles, there are differences. The main difference between a 401(k) and an IRA is that you can borrow from your 401(k).
Blooom is a fantastic 401(k) and IRA management tool. They will analyze your accounts and explain how to make your money work for you more efficiently.
#4 Invest in Real Estate
I know you might not believe it but you don’t need that much capital to invest in real estate. Before you cancel this option, just hear me out.
In the day and age that we’re living, investing in real estate isn’t exclusively for the mega-rich. Thanks to real estate crowdfunding you can invest with just a little bit of cash on hand.
Below are our top 2 choices for real estate crowdfunding:
One of the reasons why we love Fundrise is because of their minimum balance requirement. All you need is $500 to invest in real estate!
Fundrise is hands down one of the best real estate crowdfunding platforms.
They offer an investment vehicle called eREIT. A REIT is a Real Estate Invest Trust. A eREIT is just a “subcategory” of a REIT.
Fundrise allows you to invest in small investments without large fees.
Streitwise, like Fundrise, is a Real Estate Investment Trust (REIT). They advertise a 10% return on investment with a minimum balance of $1,000.
Streitwise is an easy and accessible way to invest in real estate. If you’re looking to create a passive income, Streitwise is a great way to make that happen.
What Are You Waiting For?
After reading our article, we hope that we destroyed the myth for you. Now you know that it is possible to invest with a little bit of money.
If you have some spare cash get going and start investing. We provided 4 great ways to start your wealth-building journey.
All you need to do is begin. Investing is all about time and exposure so get going!