“Investing is just for the rich”, at least that is what I have heard. “Investing needs lots of money to get started”, which is something I was told. How can this be? How can I start?
When I started my journey towards financial independence, I didn’t know anything about investing. The jargon was lost in my head, and I was quite lost every time I looked up something. Plus, what I had heard was that you need lots of money to invest, which was not me. My question was always on how to invest with little money?
If investing really requires so much money, how is it that so many people claim to be doing it? That is the question people start to ask. Isn’t investing just for the rich? The answer is that it doesn’t require much money to get started, and it can be done with little money.
Here I want to show you how I changed that feeling of not knowing into a feeling of knowing. These simple ways will teach you how to invest with little money. It does not take thousands to start investing. It can take as little as $10.
You may be wondering if it is this easy, why doesn’t everyone do it. That is a good question. People are like me, and when they do not know about money, they can be uninformed, scared of risk, and may not have the money to start.
If you have $10 in your pocket now, it is time to start making that money work for you. Stop thinking that you will always have to work for money, and start thinking about how I can get my money to work for me even when I sleep.
Here are 10 Ways on How to Invest With Little Money:
1. Invest in Yourself
This may be too simple for most people, but investing in yourself is something that can reap benefits down the line. As we educate ourselves, we can make better decisions on what we can do with our money. We can upgrade our skills and do more, and get paid more.
If you would like to get paid more at your job, you need to upgrade your skills. This takes time, commitment, and more education. When I talk about education, this does not always mean going back to school. This could be taking a course on coding, reading a few books, studying to get certified in something passionate about.
Being able to increase your wealth starts with your mind and skills. You do not just wake up one day and know how to be a negotiator, and it takes time, practice, education, and experience. So if you want to put some of your little money to use, it is time to invest some of it in yourself.
Reading this blog post takes little money, and even reading financial books to help you understand what you are investing in can also help you with your financial future. Here are seven financial books to help you on your path.
2. Robo advisors
Robo-advisors are the neat robotic algorithmic investing platforms that can help you to invest early and often. The cool thing is they will help determine your allocations for you, and all you need to do is answer some questions about the risk you are willing to take, and they will do the rest. They will often be able to create significant portfolios at low costs and low investments.
These are easy ways to enter into the world of investing. If you do not know what to do, then let the algorithms help you out. It is as easy as a set it and forget it deal. It was something that got me hooked on investing. The robo advisor does the work for you, and you can reap the benefits. They will invest your money into the stock market for you. This can be a great way to begin investing.
One of my favorite robo advisors is Betterment. They will create a portfolio of Vanguard ETFs like VOO or VTI and other ETFs that can help you invest your money. An ETF is an exchange-traded fund that acts like a mutual fund or index fund, traded as a stock.
You can start with as little as $0, but you will need to start investing to start. So if you have $10, you can begin your investing journey now.
Here are some of my favorites to try out:
- Betterment- is a popular robo advisor that will invest money for you for a small fee of 0.25% of your portfolio. It is a great way to start your investing journey.
- Wealthsimple– This is a robo advisor that used to operate in the U.S. but operates in Canada. So if you are Canadian and looking for a great robo advisor to start helping you invest, try wealthsimple.
3. Mutual Fund Investments
Mutual funds can be a way on how to start investing with little money. Several of the brokerages offer some good mutual funds to help you out. I prefer to invest in index funds. Index funds are a type of mutual fund. They have a low expense ratio and allows you to match the market on returns. So you could invest in an index fund that matches the S&P 500 and have a piece of the 500 best companies in the USA.
You can start investing with as low as $100 or less with companies like Schwab or Fidelity. They offer some total index funds like SWTAX or even Fidelity’s FSKAX to help you get a portfolio of stocks that match over 3000 companies in the U.S.
If you want to learn how to start investing with little money, some of these index funds can help you on your path.
4. Micro Investing
Micro investing is the new term that most have not quite heard as of yet. It is a way to invest little money into many different things. For instance, Apple stock costs around $145; for most people, that could be expensive. Amazon is sitting close to $3,300, and Google has a stock price close to $2,700. These two companies are way more expensive than Apple, but how can we invest all this money to obtain a share of these companies. Micro investing is that answer.
A couple of apps and companies have come out in the last ten years and have been working on investing with little money into the largest companies in the world. It seems like a pipe dream for most, but it is real if you can take advantage of these companies' tools.
Here are some great platforms to try out:
- Acorns – They use your spare change from transactions to help you invest more money. You can get started with little money, and this is just the start of your investing journey.
- Stash – This app allows you to start investing with as little as $1. It will round up spare change and start investing in fractional shares to get you started on your journey
- Public- Public is known as a social media investing app. They help create slices for you to invest money into that can buy up shares and ETFs.
- M1 Finance- M1 Finance allows you to start investing with as little as $100. Then you can automate the investments. You can create your little pie, as they call it. They have slices that can mix ETFs, stocks, and bonds that you can build into your portfolio. They will automate everything for you according to your allocation.
5. Employee Sponsored Retirement Plan
One of the easiest ways on how to invest with little money early and often with little money is an Employee Sponsored Retirement plan. These plans are to help the workers. It can be as easy as a 401k plan that allows you to meet the company match. If the company offers a match that is free money provided to you, take advantage and invest with the 401k. If you
6. Your Retirement Plan
Talking about retirements plans, you also need to think about your retirement plan. A lot of countries offer plans to help you out. The IRA (Individual Retirement Account) is a great way to start investing with little money. These IRAs can help you make a retirement without relying on social security or anything else. It can be as easy as opening an account with Vanguard or even with M1 Finance and starting funding with easy ETFs like VTI or VOO.
This is your chance to start investing and making your money work for you.
REITs is another great way on how to start investing with little money. If you are interested in investing in real estate but don’t have the cash to get started, you can invest in REITs. They are a Real Estate Investment Trust that will support your money into properties.
This could be like investing in shopping malls, nursing homes, or other projects. They will pay you a dividend for the use of your money. That is great for many people to get paid for investing their money.
8. Real Estate Portfolio
If you want to start to get into real estate, you can start with Real Estate Crowdfunding. This is a new thing that has been popping recently. It is a bit more to start investing, but it is cheaper than going out and buying your property.
Fundrise is a program that can help you get started with crowdfunding on real estate projects. It takes a minimum investment of $500, and you can buy properties without paying all the fees that you will often see with real estate investments. If you manage your portfolio, there will be a fee of just 1%.
DiversyFund is another place to create your real estate portfolio. There are $0 management fees, and it allows you to start building your portfolio with as little as $500. This means you can compete with those people on the top of the real estate market. This is excellent news if you want to create your portfolio of real estate.
9. Treasury Securities
If you are looking for something that is super safe, then Treasury Securities or Savings bonds are a place you can start. Not many people start with these, and it is because they use to have a low yield rate. In the 1980s, these had a higher rate due to the interest rate being much higher, but as interest rates are starting to rise, the yield is much higher than a few years ago.
If you want to be on the safe side of investments, then these savings bonds from the U.S. treasury are a great way to stay safe with your money.
10. Online Business
Creating your own online business is a great way on how to invest with little money. It can take as little as $3/ month to start a website. If you have a little money and want to get things started online, you can invest in skills, equipment, and the necessities to start your own online business. There are many ways to create income online, and this can be a start on your investing journey.
As you are looking to start your investment journey, realize it does not take loads of money to start, and you can start investing with little money. There are many online platforms and ways to take $10, $50, $100, and $500 and start your investment journey.
Each person is different, and therefore, there are many other avenues to start your journey. No longer will you need to fear the fact that you may not have enough money to start. The time is now to begin investing. It has never been easier to take $100 and create more wealth from it.
It can be as easy as investing with micro-investing apps like M1 Finance or Acorns. You can get into real estate with Fundrise or DiversyFund. There are also many opportunities to invest in yourself by learning new skills or starting your own online business. The time is to stop making excuses and start creating more wealth with the bit of money you have. These are the ten ways on how to invest with little money.
What is another way you think you could invest with little money?
I’m Steve. I’m an English Teacher, traveler, and an avid outdoorsman. If you’d like to comment, ask a question, or simply say hi, leave me a message here, on Twitter (@thefrugalexpat1). Many of my posts have been written to help those in their journey to financial independence. I am on my journey, and as I learn more I hope to share more. And as always, thanks for reading The Frugal Expat.