When you don’t have much money saved up, you believe that you can’t figure out how to invest it. After all, don’t the best investors have a ton of money to start out with, and then they only get wealthier?
This is a myth. The truth is, many investors were just like you. They were researching how to invest in stocks for beginners with little money just like you are. They only saved up a little bit, but they knew they wanted to grow their wealth and be more financially secure in the future.
If you have only $100 or maybe $500 to invest, you are in luck. There are many different ways to transform a few hundred dollars into a few thousand, if not much more, over time. All it starts with is putting aside that money for your investment, finding the right platform and investment, and watching your money blossom over the years.
First, let’s start with platforms that do not require a minimum balance to invest, or the minimum balance is very low. These platforms are great for learning how to invest in stocks for beginners with little money because there is no pressure to save up thousands of dollars to start investing.
Investing Platforms with Low or No Minimum Balances
The first step in your investment journey would be to open an investment account. Traditionally, this would begin with establishing what is known as a Brokerage Account. However, there are many platforms out there today that are great for learning how to invest in stocks with little money. Since many people in the younger generation are facing crippling student loan debt and other bills, these platforms have emerged to serve this stressed but motivated population. You can take advantage of these platforms and get on the right foot with your money management.
One of the popular platforms is Betterment, a robo-advisor that takes into account algorithmic calculations to determine where you should be investing your money. It doesn’t require a minimum balance, so all you have to do is transfer some money into your Betterment account to get started. A lot of people like Betterment because investing is based on logic; you don’t need advice from a stockbroker, who is subject to human error. This platform simply looks at the numbers and your goals and gives you suggestions on where to put your money.
Another platform that is great for investing in stocks with little money is Ally. Ally is a banking and trading website that gives you access to research materials on investing and allows you to make your own investing decisions. There is no minimum account balance, and it’s $4.95 per trade, which is on the lower end.
Merrill Edge is a popular platform for investing in stocks with little money as well. Though they charge $6.95 per trade, they also offer access to top of the line research and are a trusted financial advisor to many. There is also no minimum account balance.
By signing up for one of these platforms, you are taking the right steps to determine how to invest in stocks as a beginner with little money. You are on your way to financial freedom.
Now, it’s time to start saving money for your investments.
Here Are Some Ways You Can Start Investing Without A Lot of Money
1. Enroll in Your Employer’s Retirement Plan
When you are a full-time employee, often one of the benefits you’ll see is that you’ll get to enroll in your employer’s retirement plan. Through this plan, you can begin investing in stocks with little money, since your retirement funds are automatically deducted from your paycheck. Better yet, your employer might have a retirement matching program. For example, if you put 3% of your paycheck into your retirement fund every month, your employer may do the same. Make sure you take advantage of this incredible opportunity to build your portfolio. Then, choose a place to put your retirement money that will ensure it grows. This can include a mutual fund that is not very risky but offers solid returns, or a riskier fund that offers higher returns and focuses on the stock market. It’s up to you.
2. Set Up a Recurring Transfer into Your Investment Account
You may not be great at saving your money for your investments, and that’s OK. You’re still learning. Perhaps you need a push when it comes to learning how to invest in stocks. For beginners with little money, you can do this by automatically setting up a recurring transfer into your investment account every month. Even if you’re only transferring $20 per month, that will add up to $240 at the end of the year. If you put that $240 into an investment, that will only grow over time. If you’re better with cash, simply set up a piggy bank that you put your loose change into, and then cash out at the bank once a month. When you’re at the bank, put your money into your investment account. Small steps over a long period of time are going to make a huge difference in your life.
3. Use a High-Yield Savings Account
Right now, you may store your money in a savings account that only gives you .05% interest or something else that doesn’t add up to much. When learning how to invest in stocks with little money, you’ll discover that it’s important to save your money in a high-yield savings account. Look for accounts that offer good interest rates. These include Synchrony and One West Bank, which both provide a 2.25% interest rate. Set up those recurring transfers and you’ll be good to go in no time.
4. Choose Reliable and Inexpensive Stocks
Though you may want to invest in stocks that are booming right now, they may cost too much money per share. For example, Amazon (NASDAQ: AMZN) costs more than $1,800 per share, and Apple (NASDAQ: APPL) is at over $200 per share. You won’t get very far purchasing one stock of Apple, for instance. However, there are reliable stocks out there that cost less per share. For example, Banco Santander (NYSE: SAN) stock is $5 per share, and Sirius XM (NASDAQ: SIRI) stock is only $6 per share. Make sure you do your research on these companies when you’re looking up how to invest in stocks. For beginners with little money, you don’t want to buy stocks just because they’re cheap. They should also be reliable and guarantee you a solid return on your investment.
5. Find Low Minimum Mutual Funds
Though mutual funds aren’t all made up of stocks, they are a great way to get your foot in the door with investing. Mutual funds have a number of different investments and often, there is a low or no minimum balance required to get into the fund. You can do this either through your retirement fund or on your own. Look up the most reliable mutual funds before you make any decision on your investments.
6. Subscribe to Fast Fortune Club for More Tips on How to Invest in Stocks for Beginners with Little Money
Just because you’ve learned the basics about how to invest in stocks for beginners with little money, it doesn’t mean your financial education is finished. Make sure you continue learning by subscribing to Fast Fortune Club, a newsletter that shows you money management tips, investing techniques, how to save up for investing, and the best stock picks you can make.
Through Fast Fortune Club, you’ll discover how to invest on a shoestring budget, what stocks are going to be groundbreaking in the coming years, which platforms to use, and much more. Tom Gentile, a financial expert, spent years building up his own investment accounts starting from scratch, and he will show you how to do the same.
If you’re excited to take the next step of your financial journey, and you want to build real wealth for your retirement and much, much, more, then make sure you subscribe to Fast Fortune Club today. The sooner you grab the horns of your finances and take control, the better you’ll be set up financially for the rest of your life. What could be better?