I hear it everyday.
I don’t have enough money.
I don’t know how to invest with little money!!!
Well fear no longer, this post is all about how to invest with little money.
And just a reminder…anyone selling you on something that sounds like you can invest with “no money” … well those people are full of … you know what.
It takes money to make money. Don’t forget that.
Now when looking for the best strategies to invest with little money. It is important to remember Warren Buffet’s Rule number 1 “Don’t lose money” and of course Rule 2 “Don’t forget rule one.”
This is super important when investing with small amounts. You can’t afford to lose too much.
- Anyone can invest but it takes some money to make money
- Look for ways to cut spending
- Look for ways to increase income
- Develop creative ways to save money
- Buy partial shares
- Do a monthly challenge
These following 5 tips are going to help you strategize ways to save money and invest wisely.
1. Look for ways to cut spending
So, you say “I want to invest with little money.”
Well now is the time to decrease expenses and increase available cash.
Now I’m not saying don’t buy nice things and never go out to eat. But if you are struggling to invest…I have to ask you … “Do you really need Hulu, HBO Max, and Netflix plus cable?”
Could you keep your old iPhone and buy a share of Apple or buy a fractional share if you are on the monthly plan to pay for the iPhone?
Could you afford to eat out once a week instead of three times a week?
Could you wait to buy those new shoes next month?
If you’re not doing a budget, start. Your money may be leaving quicker than you can say “hello” to it because you forget to check in with it before it hits the bank account.
In the word’s of Dave Ramsey, “a budget is telling your money where to go, instead of wondering where it went.”
In other words, if you do not talk to your money, you might find yourself watching it leave. Somehow or another this is always true.
Pro hint: You might not even want them by then.
2. Look for ways to increase income
Is your income diversified? Do you have income coming in from more than one source? If the answer is no, look for ways to diversify your income.
Michael Dinich from Wealth of Geeks says passive income requires minimal effort and typically helps your money work for you. Check out his list of 35 passive income ideas to get you started.
Think about finding jobs that pay cash near you, writing a book to sell on Amazon, creating a digital product to market on Etsy, or starting a blog to drive traffic and cash in on advertising.
You have a lot of ways to make some extra money with little to no start-up costs.
Please, please, please figure out a way that you can capitalize on YOU.
Investing with little money, could change to investing with a lot of money with the right side hustle. You deserve to live the dream too.
3. Develop creative ways to save money
When you want to invest with little money, you need to be creative.
Perhaps, you could try saving the money you saved when you bought something on sale. If you save 25% on a new output, you could put that 25% back into your investment account. Just a thought!
Or maybe you had to prepay for an upcoming trip or work outing. You could also take the money you used to prepay and put it in your investment account.
Robo-investing with apps like my referral link with Acorn are wonderful as well. Because they help you save without noticing it. Acorns offers round up investing with your change. Say that burger cost you $4.50. Well Acorns will take $0.50 and add it to your acorn account when you hit $5 worth of change round-ups.
Robo-investing is automatic.
Get use to that word…automatic.
You want to be investing without thinking about it. And Acorns is a great way to make that happen. Acorns invests your money into Exchange Traded Funds with a variety of the best companies.
The great thing about ETFs, is you do not have to think about them. They have analysts constantly analyzing the companies that are in the funds and removing ones that perform poorly, while adding the ones that perform amazing.
Again, it’s automatic.
Acorns is a low-fee robo investing platform with an easy to use interface. Saving my change this past year, I have seen a more than 20% return on investment. It’s actually fun to take a look at my account sometimes.
Robo-investing has to be one of the best ways to invest with little money in some of the world’s most amazing businesses.
4. Buy partial shares
Now is one of the best times in the history of investing to get started. Technology has completely transformed how shares are exchanged and the days of outrageous fees are gone.
You are able to make trades for yourself in some of today’s prime companies without a broker and without the fees.
Charles Schwab, Robinhood, and Fidelity all offer the ability to buy fractional shares. If you only have $10 and you want to own a piece of Apple, you can buy a fractional share for $10 or you can buy a share of an ETF.
Either way, you only own a fraction of a share. Over time, if you keep adding to the fraction, you will have a whole share.
It’s just about getting in the game and getting started.
5. Do a monthly money challenge
That’s right. Get engaged with your social community….wherever it is. And if you don’t have one, find one. Communicating your goals with other people helps you learn and stay on track.
I love challenges. Because I am always a winner. I refuse to lose money.
Anyone can do these types of challenges. Do it for yourself.
There are so many social media groups and perhaps someone from your inner circle doing money challenges. These challenges range anywhere from no spending fasts to savings/investing daily or weekly challenges.
If you don’t want to look on Facebook or Instagram for a challenge, try this ONE. You save anywhere from $25-$100 every week to every other week for 8 weeks. At the end of 8 weeks you have enough to buy one stock or several stocks depending on the price per share for the company you want to own.
I know you can DO IT! Just start today.
Now when you’re doing the challenge, the key is to take the money out of your checking account and actually transfer it to your brokerage account or your robo investing account.
And the nice thing about today’s digital age is that you can do as many transfers and trades that you want without all of the fees.
Again, it’s just about getting in the game and getting started. Where can you start. Comment below.
Theresa is a personal finance blogger. She writes content for busy professional women to take control of their money and investments. She enjoys reading, traveling, cooking, and writing. Her work has been featured on GoBanking Rates, Your Money Geek, Savoteur, the Corporate Quitter, Thirty Eight Investing, and more.