The best way to secure your financial future is to invest your spare money. If you’ve only got a little money to invest, there are still plenty of strategies that can help you make money. Let’s look at some easy ways to invest with not much money in this article.
1. Purchase individual stocks through an online brokerage that offers fractional shares
Online brokers have opened up a world of opportunities for individual stock investors. By offering fractional shares, these online brokerages make it possible for investors to purchase stocks without committing to buying the entire share. This makes stock investing more accessible and allows investors to diversify their portfolios in previously impossible ways.
Fractional shares allow investors to buy just a portion of a single share, so they can invest whatever amount they have available. The benefit is that regardless of budget size, everyone can access the same stock market investments and build a diversified portfolio with just one account. Newer online brokerages are embracing this approach and enabling smaller-scale investors to reap the same rewards as larger institutions by allowing fractional shares trading on some of their platforms.
2. Join an investment club with friends or coworkers
Joining an investment club with your friends or coworkers can be a great way to do just that. By pooling resources, you can access bigger investments and employ collective knowledge within the group. Not only will this provide a better return than individual investing, but it’s also an excellent opportunity to teach each other about financial markets and strategies while networking with like-minded individuals. In addition, an investment club allows members to access more options than they would have as individuals. This could include diversifying into riskier asset classes, such as stocks or commodities that may carry higher rewards and greater risks. Investment clubs are typically organized by one leader who assigns roles and responsibilities to the other members before setting up meetings where decisions are made collectively.
3. Invest in exchange-traded funds (ETFs)
Exchange-traded funds (ETFs) offer an attractive way to invest a small amount of money and gain diversification. ETFs are inexpensive and provide exposure to multiple asset classes without the volatility of investing in individual stocks or bonds. A single ETF can hold hundreds, even thousands, of different investments managed by experts. The holdings can include stocks, bonds, commodities, currencies, and more, giving the investor broad market participation.
Compared to mutual fund investing, ETFs have lower trading costs and expenses due to their passive management style. They also provide greater flexibility because they trade throughout the day on stock exchanges as other securities do; this allows investors to buy or sell shares at any time during regular market hours. For those looking for low-cost options that still allow portfolio diversification, ETFs offer an excellent solution for achieving long-term success.
4. Invest in a low-cost, diversified index fund
A diversified index fund provides access to a wide range of stocks and bonds typically unavailable to the average investor. This type of investing allows individuals to take advantage of the potential for higher returns over time without having to pay expensive fees or rely on more complicated investment strategies. A diversified index fund is relatively easy to access and manage, making it possible for even those who lack financial knowledge or experience to grow their wealth. The best part about investing in this type of fund is that you only need a small amount upfront; as little as $100 can get you started on your path toward greater financial security.
Credit: investopedia.com
5. Consider using a micro-investing app
For many, investing in the stock market can seem intimidating and expensive. But now, with a new type of app called micro-investing, it is easier than ever to make small investments in stocks and funds with just a few clicks – even if you don’t have a large amount of money to invest each month. A micro-investing app will take your purchases and round them up to the nearest dollar. It then takes that extra change and uses it to buy stocks or other investments for you. This way, you can form an investment habit without saving up large amounts of money at once. The idea behind this type of investing is that those small investments will add up significantly over time, helping create long-term financial security.
Benefits of Investing
For many people, investing can offer several key benefits compared to savings accounts or other forms of stashing money away. By investing, you have the opportunity to potentially grow your money more quickly than with a traditional savings account. This can create additional income and be used toward long-term goals such as retirement.
Investing also provides diversity benefits since you don’t rely on the performance of only one asset class. As an example, you could invest in stocks, bonds, and exchange-traded funds (ETFs) as part of a diversified portfolio, which can help dampen volatility in the market. Additionally, having access to different investment options can allow for more creative approaches depending on your individual needs and risk appetite.
Other benefits include:
- Liquidity – Easy access to money when needed.
- Automating recurring contributions for investments.
- The convenience factor of investing is also its simplicity, as compared to dealing with cash transactions yourself or transferring money manually from one account to another.
