Investing even very small amounts can reap big returns. Here are 5 ways you can start investing with little money today
Many people do not think about investing because they think that they need a lot of money—thousands of dollars! - to start investing. This just isn’t true. You can start investing for as little as $50 per month.
The key to be wealthy is developing good habits—like regularly save money every month. If you make investing a habit now, you’ll be in a much stronger financial position down the road.
Don’t believe me? Here are five ways you can start investing with very little money:
Try the cookie jar approach
Saving money and investing it are closely interconnected. In order to invest money, you first have to save some up. That will take a lot less time than you think, and you can do it in very small steps.
If you’ve never been a saver, you can start by putting away just $10 per week. That may not seem like a lot, but over the course of a year it comes to over $500.
American Express National Bank currently offers a strong 2.10% Annual Percentage Yield on their online savings account. There is no minimum deposit amount required and no monthly maintenance fees associated with a Personal Savings Account from American Express so the yield is earned on all balances.
The brand also offers high-yield CD’s if you’re in the market for a place to park your cash and are in need of high-interest rates.
Try putting $10 into an envelope, shoebox, a small safe, or even that legendary bank of first resort, the cookie jar. Though this may sound silly, it’s often a necessary first step. Get yourself into the habit of living on a little bit less than you earn, and stash the savings away in a safe place.
The electronic equivalent of the cookie jar is the online savings account; it’s separate from your checking account. The money can be withdrawn in two business days if you need it, but it’s not linked to your debit card. Then when the stash is large enough, you can take it out and move it into some actual investment vehicles.
Start with small amounts of money, and then increase as you get more comfortable with the process. It may be a matter of deciding not to go to McDonald’s or passing on the movies, and putting that money into the cookie jar instead.
Prefer that money to be invested right away? Acorns is an app that rounds up your credit and debit card purchases and invests the difference. It’s not fancy, but it’s a start. And for people who’ve never been savers, getting that start is all the more important.