Tips for Personal Investing With a Small Amount of Money


Most money experts say that investing is one of the best ways to secure your financial future. But if you’re living week to week, finding the money to invest in anything seems like an impossible dream. It’s not. Follow our advice to start investing with $500 or even less.

Get Involved With Peer-to-Peer Lending Websites

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Peer-to-peer lending websites help people who want personal loans to connect with people who have money to spare. People often turn to peer-to-peer lending websites to avoid the red tape of financial institutions. Some may also look to peer-to-peer lenders if they’ve been rejected by a bank because they haven’t been working at their current job for very long or they’re self-employed.

As a peer-to-peer lender, you might lend money to people who want to make improvements to their home, buy a car, or pay for medical expenses, for example. You’ll receive monthly payments and interest as the borrower repays the loan.

Use Investment Apps on Your Smartphone

There are a number of credible investment apps, like Acorns and Betterment Investment, that allow users to invest affordably via their smartphones. If you don’t already have a smartphone, an LG G6 makes a great choice. These smartphones are made of metal so they’re very durable, and they unlock via a fingerprint sensor so your financial information is kept secure. Connect your device to a reliable telecommunications provider like T-Mobile. This company has a reputation for its secure, fast 4G LTE network, which covers much of the United States.

One big advantage of investing via your smartphone is that you can monitor your investments anywhere you have an internet connection. If you’re waiting for a friend to join you for lunch or traveling on the train, for example, you can take time to check on your investments and make any alterations. You’ll love the flexibility that investing with your smartphone provides.

Invest With a Commission-Free Broker

Choosing a commission-free broker is a great way to save money. These brokers typically don’t have the extras like analyses reports and automatic investments that brokers who charge commissions have, but you can always fill those gaps with your own actions and research. Commission-free brokers tend to be found online rather than in brick-and-mortar financial firms. Loyal3 and RobinHood are two commission-free brokers that you may consider.

Enroll in a Dividend Reinvestment Plan

Dividend reinvestment plans (DRIPs) allow investors to buy shares directly from businesses they’re interested in, without the need for a broker. They’re an excellent option for people without large sums to investment because they let you contribute small amounts of money over an extended period of time.

To get started, you’ll need to buy at least one share of the stock you’re interested in, but you can certainly purchase more if your finances allow. Some companies have a minimum investment amount, but this is typically $100 or less. And some businesses have no minimum investment limit at all.

When you purchase your first shares, you’ll usually complete an online form. The business will then enroll you in its DRIP. You can add more money to your DRIP via electronic bank transfer or a check. Minimum monthly spends are usually low, at around $50. Your shares’ dividends are reinvested into the DRIP, rather than being taken as cash, to help your investment grow.

Choose a Low Cost Mutual Fund

Because many mutual funds require minimum investments of thousands of dollars, you might have thought this investment option was out of your reach. However, there are also a number of mutual funds with much smaller minimum initial investment amounts of $500 or even less.

Mutual funds are ideal for new investors because they let you diversify your portfolio. Rather than relying on just one stock, you might have several hundred working for you. If you don’t know a lot about stocks and shares, mutual funds provide a low risk way to invest in this profitable investment area.

Don’t let limited liquid funds get you down. With our expert tips, you don’t need a lot to start investing and paving the way for a brighter financial future.

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