How to Start Investing Small Amounts

It’s no secret that saving for the future is challenging when you’re working to cover daily expenses like rent, utilities and food. Add in inflation and it can seem like the money you make doesn’t go as far as it used to. While it’s important to take care of more immediate financial goals, like paying off debt and building an emergency fund, it’s also crucial to start investing. Even if it’s just a small amount, investing consistently over time can have significant financial returns thanks to compound interest.

Many people are put off by the idea of investing because they believe they don’t have enough money to make it worthwhile. The truth is that you can start investing with very little money, especially now that micro-investing apps have eliminated the minimum investment amounts required by brokerages and robo-advisors. This article will outline some of the ways you can invest with a low-roller budget and how to make it a sustainable habit.

Before you begin investing, it’s a good idea to have a solid savings plan in place and make sure you’ve taken care of more immediate financial goals, such as paying off high-interest debt and building an emergency fund. Then you can focus on setting aside a small percentage of your income and watching it grow over time.

The first step is deciding how much you can afford to save each month. Some people are able to set aside 10% of their income while others may only be able to spare a few dollars each week or month. It’s less about the exact amount you save, and more about making a commitment to stick with it each month or week.

If you have some income to spare, you can start by putting money into a retirement account or an emergency fund. You can also invest in commodities, which are raw materials that are either used directly or indirectly to produce other goods and services. An example of a commodity would be oil, which is used to power airplanes, among other things. You can also invest in individual stocks, which are small companies that have a higher risk of failing than larger firms.

Another option is to invest in mutual funds, which are a collection of assets that are managed by an experienced team. These funds can be a good option for beginners because they typically have lower fees and offer diversification. This means that you don’t have to worry as much about the individual risks of each investment.

Finally, you can also invest in real estate through online platforms that connect you with local and national property managers. This is an alternative to renting and can be a great long-term financial investment. However, you should speak with a real estate professional before making any decisions. It’s important to understand the risks and benefits of each type of real estate investment before you proceed.