Invest in 2020: Less is more and little of anything goes a long way. Investing even very small amounts can reap big rewards. Here are the ways you can start investing with little money today.
For many people, the word “investing” conjures up images of men in suits, monitoring the exchange of millions of dollars on a stock ticker. There is nothing more obvious as people fear to invest in.
Storing money every month, to subject it as saving is the key to building wealth. developing certain habits—like regularly putting money away every month is most likely heading to a safe future. Swap out the barista-made cappuccinos for coffee at home and you could already be saving more than $50 a month.
Once you have a little money to play with, you can start to invest.
In 2020, a year that is indeed for execution can get a date, a ride or a pizza with the swipe of a smartphone screen. Investing is no different either. If you can automate your bills, why not your investments? It’s just as easy.
With a Robo-advisor, you can make your money work while you play. And just like Halloween costumes, investing comes in many different forms. It shouldn’t be a scary word.
Whether it’s opening a savings account, investing in your retirement or the real estate market, investing for beginners is simpler and more straightforward than ever before.
Soon you’ll see how addictive growing your money can be.
Here are six simple ways to get there:
Get the piggy saver first
Saving money and investing seem connected there is a thin line of difference. In order to invest money, one should first have to save some up. That will take a lot less time, and can do it in very small steps.
- Start small but start anyway, even if it is a dollar. That may not seem like a lot, but over the course of a year, it comes to over $500.
- 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.
Read More: 5 Best Alternative Investments – 2019
Make your first steps in the real estate market
Real estate investing does not have to be for the very rich. There are many options for real estate crowdfunding and though this may seem like something you’d be nervous about looking into – it actually can be an intriguing investment.
- As a beginner, it can be difficult to understand and start accelerating the growth of your investment.
- Though you’re an unaccredited investor, you can buy properties without paying those very large fees that end up being a deal-breaker if you want to start dabbling in real estate.
- Just by managing the portfolio there is ample amount that could inbox your growth percentage.
Read More: Should You Be Investing In Gold In 2020?
- Enrol in future employer’s retirement plan
If you’re on a tight budget, even the simple step of enrolling in your 401(k) or other employer retirement plan may seem beyond your reach. But there is a way that you can begin investing in an employer-sponsored retirement plan with amounts that are so small you won’t even notice them.
For example, plan to invest just 1 percent of your salary into the employer plan.
You probably won’t even miss a contribution that small, but what makes it even easier is that the tax deduction that you’ll get for doing so will make the contribution even smaller.
Once you commit to a 1 per cent contribution, you can increase it gradually each year. For example, in year two, you can increase your contribution to 2 percent of your pay. In year three, you can increase your contribution to 3 per cent of your pay, and so on.
If you time the increases with your annual pay raise, you’ll notice the increased contribution even less. So if you get a 2 per cent increase in pay, it will effectively be splitting the increase between your retirement plan and your checking account. And if your employer provides a matching contribution, that will make the arrangement even better.
Blooom is a great tool for the hands-off investment management of your 401(k). They’ll give you a free 401(k) analysis, telling you where and how they can optimize your investments. Check out our review of Blooom; if you decide to use their services, you’ll be charged a reasonable $10 per month.
And Blooom has got a special promotion right now: get $15 off your first year of Blooom with code BLMSMART
- Put your money in low-initial-investment mutual funds
Mutual funds are investment securities that allow you to invest in a portfolio of stocks and bonds with a single transaction, making them perfect for new investors.
The trouble is many mutual fund companies require initial minimum investments of between $500 and $5,000. If you’re a first-time investor with little money to invest, those minimums can be out of reach. But some mutual fund companies will waive the account minimums if you agree to automatic monthly investments of between $50 and $100.
Automatic investing is a common feature with mutual fund and ETF IRA accounts. It’s less common with taxable accounts, though its always worth asking if it’s available. Mutual fund companies that have been known to do this include Dreyfus, Transamerica, and T. Rowe Price.
An automatic investing arrangement is particularly convenient if you can do it through payroll savings. You can typically set up an automatic deposit situation through your payroll, in much the same way that you do with an employer-sponsored retirement plan. Just ask your human resources department how to set it up.