When it comes to investing, many new investors have no idea where to start or let alone know how much they should spend on investing.
However, it is good to know that it does not take a lot of experience to be able to make an investment. In fact, there are even ways to invest that don’t need much money to start.
The thing to keep in mind about wealth and building it is to incorporate habits that will benefit you in the long run. This means you can save a bit each month. A good way to see this is by simply making homemade coffee as opposed to visiting your favorite coffee shop. Saving the money that you would have spent could add up quickly. As soon as you have saved enough, you can then begin to make investments.
With so many advancements in investing, you only need a computer or even your cell phone to make an investment. Automation is made simple for you to make investments.
Luckily, the new investor has many options available to invest with very little money. These make it simple to make money. After a while, you will begin to notice the addictive nature of buying investments with not a lot of money. Below, we have listed the top three ways to invest with very little money.
1. Stocks Under Five Dollars
There are many stocks under 5 dollars. These stocks are commonly known as penny stocks. The reason for this name is due to the fact that they are cheap in nature. To be honest, many of these types of stocks are unable to attain the same recognition as those worth much more.
These cheap stocks consist of companies that have started on a small scale and have yet to prove their financial potential. With that, you can easily locate good, cheap stocks that have experienced a drop in share price but have a strong foundation to bounce back in the future.
2. Integrate a Piggy Bank
When it comes to investing and saving money, the two are very similar. Plus, to be able to invest, you need money. When you do save, you will understand just how quickly it can add up in a short amount of time.
By putting aside a small amount of only $5 to $10 weekly, you will easily save a few hundred dollars in just a year. There are many different forms of a piggy bank aside from the traditional method and a few examples that you can use include a shoebox, envelope, a cookie jar, or a safe. Although it may seem strange to do, it can be a good habit to get into when you want to save up for something big.
3. Integrate Automatic Investments
By allowing automatic investments, you won’t have to remember to do any remembering to put aside money each month. By doing this, you just need to make sure that you are ok with living with a little bit less in your bank account. A good way to invest automatically is with a method known as a robo-advisor. As you may have realized by the name, they take care of both the easy and hard work involved with investing so there is no investing experience needed.
4. Take Advantage of 401k Investing
Being on a budget does not mean you cannot save a little. In fact, just getting started with a 401k offered through your employer is a good start. You can also choose a very small amount to get started.
A good amount to begin is with just 1%. This amount is so small that you will unlikely notice it missing. The other good thing is that the contribution may even be smaller thanks to the deduction of tax you will also achieve.
You will have the option to increase the contribution each year if you wish. This means every time that you obtain a pay increase you can contribute that amount to your 401k.
5. Get Familiar With Stock Market Investing
Before, the stock market required the investor to have a lot of money to invest. However, today that has changed and the amount needed is not as high as it once was. This is thanks in part to the internet and the ability to invest even if you don’t have very much to start with.
You have quite a bit of freedom as far as amount is concerned and you can buy just a bit of a share instead of paying the whole price for a single share. This is good as you do not need to make an entire commitment at once.
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