Build your wealth

Building wealth

Investing even very small amounts can reap big rewards. Here are 5 ways you can start investing with little money today.

The single most important part of investing is getting started. Life is all about habits, and if you never get into the habit of investing, you could be financially impaired for a lifetime. One of the primary reasons people don’t start investing is because they feel they don’t have enough money to do so. But even if you start investing with little money, it may be all that’s needed to kick start your way to greater investing later.

1. The Cookie Jar

Saving money and investing it are closely connected. In order to invest money, you first have to save some up. But that will take a lot less than you think, and you can do it in very small steps.

You can start with small amounts of money, and then increase as you get more comfortable with the process. It may be a matter of deciding not to go to McDonald’s, and putting the money into the cookie jar instead. Or could mean passing on the movies, and saving the cash.

It’s not fancy, but it’s a start. And for people who’ve never been savers, getting that start is all the more important.

2. Your employer retirement plan

If you are living 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 that you won’t even notice them.

If you time the increases with your annual pay raise, you’ll notice the increased contribution even less. So if you get a 2 percent 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.

3. Betterment

Betterment is the perfect platform if you are new to investing and don’t have a large amount of money to open an account. Not only will Betterment handle the investing for you, but there is no minimum deposit amount to open an account and you can contribute as little as $10 at a time.

4. 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.

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.