Investing is one of those activities where the most important step is getting started. Here are ways to invest small amounts of money, so there’s nothing stopping you from investing in something.
Start your own business
Investing in your own business could prove to be the best choice of all. Many business owners start out by picking up a part time job or a side hustle to make extra cash to get their business up and going. A great side hustle can enable you to create a schedule which earns you extra cash to throw at that dream of yours.
Create a budget
Budgeting is one of the easiest ways to keep track of your spending and ensure that you're not going overspending in any particular category. If you really want to get your finances on the right track, map out a budget and review it every few days or months to make sure it's something you can actually stick to. If not, you may need to look at cutting some expenses to avoid debt or cripple your savings efforts.
Watch The Fees
Investment fees can eat you alive if you’re not careful. There are several fees you need to be aware of:
Transaction Fees The fee charged every time you buy or sell shares of an investment. These fees are generally pretty low.
Front End Loads- Some mutual funds charge a fee as high as 5-6% of the total amount invested to purchase shares of that mutual fund.
Annual Fees- Fees can be really subtle. Every time you pay an investment fee, that’s money that does not get invested and never has a chance to grow. Obviously, the more investment fees you pay, the more investment growth you give up over the long term. High fees can literally cost you tens to hundreds of thousands of dollars in investment returns over your lifetime.
Dividend Reinvestment Plans (DRIPS)
These are plans that allow you to invest small amounts of money into stocks of companies that pay dividends. Many large companies offer DRIPS, so if you want to invest directly in stocks, and you like certain companies, you can invest in those companies; usually without having to pay any kind of investment fees.
Typically, they allow you to build your investment over time by making periodic contributions. Often, this can be done using payroll deductions. This can also be an excellent way to cost average your way into large investments in major companies. And when you earn dividends, the money will automatically be reinvested to buy more company stock.
Bank Investments
However, the advantage that banks offer is that you can invest very little money (in money market accounts or certificates of deposit), earn a little bit of interest on your money, and have virtually zero risks of principal loss.,To be sure, you won’t be able to earn much money on your investments at the bank, at least not in the current investment environment.
Investing in Your Own Skills
Are there any skills that you could acquire that could bring you up to the next level in your career? Think in terms of learning a new computer application, a foreign language, or taking a public speaking- or sales-course.
It’s possible that you could acquire certain career enhancing skills that would enable you to either get a promotion on your current job or even transfer to a new, higher paying position with another employer. A little cash is often what it takes to take a course to learn that kind of skill.
Be patient and stay the course
Great wealth is generally accumulated over time, don't let fear or impatience derail your progress. Read up and learn enough about investing so that you're comfortable with the investments you've chosen, so that you know to expect occasional downturns in the market. The more you learn, the better choices you'll likely make, and the more your money will likely grow.
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