7 Ways to Start Investing With Little Money: Your Best and Complete Guide to Investments

But nowadays, investment has become easy to reach and cost little for you to actually get into investing.

7 Ways to Start Investing With Little Money

One of the best things you can do with your money is to invest it.

Investing is a great way to save money and is like a business where you can actually make the money you put in to grow and work for your needs.

But you may think investing is hard for you because you don’t have much money to invest in.

Don’t worry!

We have come with 7 ways to start investing with little money.

Before you know it, your investments have grown and it can be something you can withdraw and make it work for you in the future.

If you read on, we’ll be talking more about investments, what they are and how people can make each investment work for them.

What Are Investments?

Investment is the process of allocating funds that you have into something that will bring a future benefit for you.

Often this would result in additional funds or savings which you can use later on.

Generally, an investment can be a risk as not all investments yield profits and can go down in value if not careful.

The higher the risk though, the higher the yields. 

Now you don’t have to be some kind of Wolf of Wall Street to start investing.

Even if you just have a few dollars to spare, you can invest that and it can grow with compound interest.

The real key to investment is developing good habits.

Habits that can become a part of your regular life.

This could be as simple as putting money away every month or switching from expensive items like barista-made coffee for regular coffee you can get at home which could actually save you more than $50 a month.

So even if you have little money to start with, you can invest.

If you can use your smartphone to get a date, get a ride, or order pizza then you can do also with investment.

The thing is, if you can automate your bills and purchases, then that is also very possible with investments.

There are many options are available such as a robo-advisor to a savings account.

You can also use a stock trading app and start off with as little money as possible.

There are so many ways to invest with just a bit of your cash you can get started right away.

There simply is no excuse not to put some of your extra cash here and there into an investment that can net you a profit in the future. 

So, let’s take a look at 7 ways to start investing with little money and how you can make that investment work for you. 

7 Ways to Start Investing

Let’s take a look at some of the 7 ways to start investing with little money that we are sure can get you started.

These include:

  1. The Cookie Jar approach
  2. Have robo-advisor invest for you
  3. Invest in the stock market with little money
  4. Tap the real estate market
  5. Take advantage of your employer’s retirement plan
  6. Low-initial-investment mutual funds
  7. Invest in Treasury securities

We’ll take a look at each of these methods and see which is the best way to invest money.

The Cookie Jar approach

Savings and investments are very closely connected. 

If you wish to invest, you need to save up some first.

The great thing is that this can be done easily and fast if you take some small steps.

One way you can start saving is by putting away $10 a week which you can put into an envelope, shoebox, a small safe, or even a cookie jar.

This may not seem a lot but over the course of a year, this will actually be more than $500.

Get into the habit of doing this and before you know it you would have saved some money you can already invest in.

You can also create an online savings account that is separate from your regular bank account.

By this, you can keep the money there and if it gets large enough, you can withdraw it and use it on your investments.

There are also some bank accounts that offer interest rates.

This means that your bank account can actually earn interest and start making money even if it’s just a small amount.

This is probably one of the most important of the 7 ways to start investing with little money.

Have robo-advisor invest for you

7 Ways to Start Investing With Little Money

There are usually two ways to invest money in stocks and other investment options.

You can either do it yourself or get advice from a brokerage firm. Many firms offer a robo-advisor that can automate the system for investments for you.

All you need to do is enter your details plus the money you’d like to spend for investment and a robo-advisor can then decide for you what to invest on and try to gain a profit as much as possible.

A robo-advisor may invest in stocks, mutual funds, bonds, etc. whichever seems to be the wisest choice that matches your profile. 

Of the 7 ways to start investing with little money, this is probably the easiest one to follow and can start you off right away. 

Invest in the stock market with little money

A while back, if one wanted to invest in the stock market, they would often have to save a large amount like $25,000 or more and go through a brokerage firm to process those transactions.

However, as technology has improved a lot since the early days of the stock exchange, there are now online brokerage firms that you can approach which can invest money for you.

In fact, there are apps like Robinhood, that allows you to purchase stocks with as little money as you have as the app doesn’t have any minimums.

That means, stock trading can happen even for just a few dollars so you can transact with any number of stocks or even a fraction of a stock. 

Tap the real estate market

Apart from the stock market, you can now also invest in real estate without having to buy a new property on your own.

A new time of investment called real estate crowdfunding is now possible where you can own a fraction of shares of large commercial properties without the headache of actually owning and running the property.

This kind of investment though requires a larger minimum investment than a robo-advisor ($5,000 instead of $500).

It’s also known to be riskier as this investment places all your eggs in one basket (one property) rather than a diversified portfolio like when you invest in multiple stocks of a company or mutual funds. 

Take advantage of your employer’s retirement plan

7 Ways to Start Investing With Little Money

Does your employer have a retirement plan? 

Then you should piggyback on your employer’s plan and add yourself to the plan. 

This is probably one of the most neglected of the 7 ways to start investing with little money because it can easily be forgotten as an option for investing.

This retirement plan will be a great option because you set it then forget it afterward. 

You can, for example, invest about 1% of your salary to go into the retirement plan.

Your company will deduct it from your regular salary and because it’s such a small amount, you probably won’t even notice it.

You can then annually increase your contributions every year.

This means 2% for your second year, then 3% for your third year in the company.

And because it’s timed with your increases, you won’t even notice the amount because it’s likely to be less than your actual annual increase. 

Low-initial-investment mutual funds

Mutual funds are great options for investment securities that allow you to invest in a portfolio of different stocks and bonds but with just a single transaction.

Most mutual funds require an initial minimum amount of investment of around $500 or $5,000.

This can be a bit out of reach for first-time investors.

However, there are now mutual fund companies that waive the minimum amount if the investor agrees to automatic monthly investments of around $50 to $100 which is doable for most people who have just several bucks to spare to invest.

Automatic monthly investments have become more common nowadays and something you should consider.

Invest in Treasury securities

Not many new small investors start with investing in US Treasury securities.

You won’t get rich quick with these investments, but they are a good safe place to place your money in where you can earn a bit of interest and later on withdraw those funds once you are ready to invest in something higher risk/higher return.

These savings bonds, as they are also known, are easy to buy through the US Treasury’s bond portal Treasury Direct where you can buy fixed-income US government securities of anywhere from 30 days to 30 years with denominations as low as $100.

7 Ways to Start Investing With Little Money

Final Thoughts

Most people are either scared of investment or think that they don’t have enough money to do so.

But nowadays, investment has become easy to reach and cost little for you to actually get into investing.

It’s no longer when or how to invest your money but why you aren’t investing yet.

Through these 7 ways to start investing with little money, anyone can be an investor in no time.

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Author: maharot22

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