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How to Start Investing With Little Money

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Investing wisely can make your money grow and help you satisfy future financial needs. Retirement benefits and other social security measures may not account for your future expenses. For example, would you want to travel the world after you retire?

The retirement benefits may not fulfill such expectations and thus you should consider investing your money.

It does not matter whether you live from paycheck to paycheck, you can put a little money in shrewd investments that could earn big returns in a few years. You only need to develop financial discipline and make informed investment decisions.

You don’t need to have a ton of money to start investing! Learn how to start investing with little money and watch your money grow.

1. Establishing Your Bank Balance

Do you have your money in your savings? That can help you kick-start your investment bankroll. Do not let the little money in your savings accounts lie idle. Instead, use it as the initial capital for investing in various avenues.

Don’t have savings to your name? Do not worry. You could build a bank balance by changing your lifestyle.

First, you could reduce some unnecessary expenses such as drinking alcohol and indulging in too much coffee. Use the money to build your balance.

2. Enroll in Your Employer Retirement Plan

Do you live from paycheck to paycheck? Are you willing to make investments with no money? Before you look any further, consider whether your employer contains a retirement plan.

Does your employer have a 401 (k) plan? That would be a good start to make investments. Ensure that the employer has remitted a percentage of your salary to the fund.

The fund managers will use their years of experience to invest the money to earn annual returns. As an employer, you will only need to ensure you have work to sustain annual remittances to the fund.

Some employers also provide some extra money for the employers to invest in the 401 (k) plan. Do not hesitate. Send the money to the fund and watch it grow as you age.

3. EFTs

If you lack an employer retirement plan, you can consider many other options such as EFTs. The securities act as a good investment for beginners with little money. The EFTs track the performance of a specific section of the financial markets and therefore you don’t have to spend the whole day following stock market news.

The funds provide one special advantage; it provides diversification for the users. Diversification helps to lower the risk of losses in the stock market and other financial markets with high volatility.

As a first time investor, you may not have the experience and insight to understand the importance of diversification and thus the EFTs ensure that you don’t learn through the hard way.

The EFTs will pay some dividends on your money. Your initial investment will grow gradually if you reinvest the dividends in the fund.

4. How to start investing with little money in DRIPS

You can start investing with little money on DRIPS. DRIPS refer to investment plans that allow you to buy stocks from some companies with limited funds. The approach will allow you to purchase dividend-earning stocks directly from selected companies that use DRIPS.

Your patience and self-discipline can help you to grow your portfolio over time and eventually lead to the purchase of more stocks from other organizations.

5. Target Date Funds

The target date funds align your portfolio to your retirement date. The funds manage the money on your behalf and ensure that you get some good returns over time. Such an investment option could appeal to individuals engaged in manual labor and lack of 401 (k) investment plans.

However, some funds charge a lot of money and thus you should strive to consult with your fund manager about the charges set on the fund.

6. Worthy Bonds

Ever hear of worthy bonds? They are bonds issued by creditworthy American companies. The bonds help the companies to undertake various projects and therefore your money serves as a debt to the organizations. The firms will then repay the money with some interest at a future date.

Normally, worthy bonds contain a fixed term of 36 months with interest paid on a weekly basis. You can withdraw the interest at any time you like. However, you should strive to plow back the gains to enhance your portfolio.

7. Low-Initial-Investment Mutual Funds

Are you wondering on how to invest money with low funds in mutual funds? Well, unlike hedge funds that require thousands or millions of dollars to manage your money, mutual funds have lower capital expectations. Most mutual funds allow investors to invest using an initial capital of between $500 and $5,000.

That may seem a lot of money for some people. Don’t worry. Some mutual funds allow the members to use lower amounts in a monthly plan where they remit between $50 and $100 every month.

The mutual funds will help to grow your money by providing you with an opportunity to buy several stocks and bonds in a single transaction.

8. Treasury Securities

Are you afraid of losing your money in the stock market? The government provides bonds with a zero risk of losses. The usually have a fixed term of about 30 days to 30 years.

The choice of length will determine with the purpose of your investment. If you plan to create a fund for your retirement, you should consider a 30-year period bond. The treasury securities provide constant interest rates that will compound over several years.

You could as well consider the Treasury Inflation Protected Securities, TIPS, which account for market forces such as inflation. The government will ensure to adjust your returns to match inflation so that your money contains the same value in a few decades time.

You Now Have an Idea on How to Start Investing with Little Money

You can use various methods to grow your money over time by learning how to start investing with little money. Individuals in employment can consider employer investment plans. Those in the non-formal sector can consider other avenues such as mutual funds and EFTs that require little initial investments.

You have to use money to make money. Get your savings, or rather create some savings, and build your portfolio from a few hundred dollars to millions of dollars.

Read about how to blog away your debt on our website today.


Motivating Mom!

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While I do not follow the Dave Ramsey plan, I am a member of several Dave Ramsey Facebook groups. I found them very educational and sometimes, like this, super motivating!! This is a recent post to the group by another single mama. (At least I’m assuming she’s a single mom since the post is from a Single Parent Dave Ramsey Group. I don’t know her personally.)

motivation from another mother
Wow! That’s all I could say after reading her post. A full time job and several part time side hustles. Way to go, mama!

I’ve seen more and more posts regarding donating plasma. Does anyone in the BAD community do this to earn extra cash? Personally, I’m pretty scared of needles. But I’m also pretty motivated to pay off my debt (and save money to purchase a car.) I would love to hear about your experiences with this.

I am now entering my “kid free” two weeks while Princess is at camp. (Yes, I know the twins are both still here, but with them being 20, in school full time and working part time, well, I’m still considering this my kid free time.) Once again, I have divided the house up to do a thorough purge, clean up and rearrangement over the next two weeks.

Last year, I hoped to really take a vacation during this two week period, but in all my growing, I now realize that the money I would have spent on that…well, that would have been a very bad decision. So, no vacation, no extra money spent. Go me. Another proud moment!


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