One of the key reasons why people don’t invest is because they say they have little money.
While many waits for enough money to start investing, others have started with little and started to enjoy the power of compound interest, after all, compound interest works with anything over £0.01.
If you are waiting to have enough money to start investing, I can tell you now that it takes a while for the money to become ‘enough’ for many, as even the wealthiest continue to actively sort ways to acquire more as its just not enough.
So, if you are waiting to have more money to invest, my advice is to start with the little you have and let that little start to make more money so that someday you just might have enough.
While many waits for enough money to start investing, others have started with little and started to enjoy the power of compound interest, after all, compound interest works with anything over £0.01.
If you think you are too young to invest read this blog post on why you need to start investing at an early age and get started now by first gathering your spare cash.
Start By Gathering Your Spare Cash
The first thing you need to do to get started with investing is to save. Without attempting to save you will not have money to invest.
Get you a piggy bank, a cookie jar, an envelope, a shoebox, a small save or whatever and start to put some money in it. If it’s easier for you to use your savings account, please do.
Make sure you leave that money for a week or more and then transfer it into your bank account and invest immediately.
There are apps like Acorns and Stash to help you invest your spare change if you are in the US, Peaks if in Europe and Moneybox, Revolut if in the UK.
Start Investing 1% In Your Employer Retirement Plan
There are various reasons why you should use your employer sponsored retirement plan but the main ones are
- it’s your opportunity to get free money
- it reduces your taxable income the moment you invest
- it reduces your taxable income when you come to sell your shares
If not for anything but for the possibility of free money, you should start using your employer sponsored retirement plan. Start small, put 1% of your salary and get 2% invested as your employer puts in another 1%.
You would not miss 1% as much as you think you would.
Buy Fractional Shares of Stocks, ETFs, or Index Funds
You don’t have to save lots of money to own shares, you can buy a fraction of a whole share.
Even better if you don’t know which share to buy you can buy Exchange-traded funds or index funds which track the performance of an asset class or a stock market- this way you don’t have to decide on an individual company’s stock.
Because I am no expert at trading stocks and don’t have the time to do so, 90% of my investment in the stock market are done via an index fund. I use Vanguard, Invest Engine. And Freetrade.
I track the quarterly performance of my portfolio here. You can get started by investing in one of my favourites the S&P 500.
Use a Robo-advisor
Investing via a robo-advisor means allow the algorithm on a digital platform to automate where your money is put depending on your answers to certain questions rather than having a human fund manager or financial adviser invest your money for you.
These questions include your reason for investing and risk appetite rather than having a human fund manager or financial adviser invest your money for you.
The good news is because the algorithm is doing the investing for you it is often cheaper than a human will have charged you.
There are various Robo advisors out there with low fees that you can easily get started with. Check out;
Get Started in Property via a Real Estate Crowdfunding Platform or a Peer-to-Peer Lending Platform
There are peer-to-peer lending platforms where you can lend your money to individuals at high interest rates.
These sites are convenient for borrows as they can access money easier and quicker, in exchange for the convenience the lenders get higher interest rates.
Before you invest in any of these options make sure you are comfortable with the risk to reward ratio. Once you are, you can start investing with your little money.
Own A Piece of Real Estate By Buying REITs
A REIT is a real estate investment trust which is effectively a company that owns or finances properties.
You invest in REITs the same way you invest in stocks or ETFs by buying shares in this company. You earn from your REIT investment by getting a portion of the profits from either the rental income on the investments or the rising value of the property.
If you have ever wanted to get yourself started in real estate investing, then a REITS might just be the way to go.
Start Your Own Business
There is so much insight out there about various businesses that you could start with little investment. Examples are dog walking with a pair of shoes and some dog toys you can get started. Blogging with a domain for less than a pound on GoDaddy, Namecheap, Domain and the likes you can get started or even for free on medium you cans hare your knowledge with the world.
So, if you have an entrepreneurial spirit and wondering where to invest your cash how about you start by investing it in yourself through your business.
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Irrespective of the way you choose, remember to diversify your investment across various asset classes such as shares, real estate, and even more important invest for the long term.
I wish you all the best as you get started with the little in your hand.
*This is not financial advice. Do not consider this blog to be a substitute for obtaining advice from a qualified investment advisor. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional*
