Investing, even a small amount of money can have great rewards. In this article, we have outlined what the different ways to make decent investments with a tiny budget are.
Lots of men tend to avoid investing as they believe that lots of money are needed to get involved. This is factually not correct as you can start making investments already with £50 a month.
The most important thing to building wealth is to have consistency and regularly been able to put away money every single month. If you are starting to invest in the right way, you will have a much stronger financial position down the line.
Don’t you believe us? Below we have hand-picked five ways so that you can start investing with very little money:
Cookie Jar Approach
Make savings and investing them are two linked concepts. To have enough capital to invest, you first need to save a certain amount. You can do that in steps and even if you have never been a saver by putting away just £10 every week you will see that over a year you will have more than £500 in your jar.
To help you with the routine try to place £10 into an envelope or a small safe. If you can succeed in living on a little less than what you earn, your savings will increase over time.
Of course, you don’t have to have savings in cash, you can also use an online saving account which will be separate from your main account. The idea is that, although you can withdraw the money if needed, the funds will not be linked with your debit card. When you have reached an amount of savings that is big enough, you can start thinking about investments.
It is essential that you start the investment with a rather small amount of money and you can then increase as time progress. You might be surprised but merely avoiding to go to McDonald’s or to skip some movies you will save some good money.
Nowadays there are also free apps that do analyse your bank account and make small transfers to a savings account on your behalf. Others apps do rounds up your debit and credit card and use this cash to invest.
Remember even the biggest investors have started somewhere. The important thing is that if you have never been a saver, you get going with it.
Enrol in your employer’s retirement plan
If you don’t have enough budget, you can start by enrolling in your employer retirement plan. The amounts will be, and you will not even notice them, but over time you will get great benefits. The way it works is that the plan will invest 1% of your salary into the employer plan before the wage. You can then progressively increase your contribution to 2%, 3% of your pay and so on.
Let The Experts Invest the Money For You
There are online investment platforms that are cheap and easy to use. The online brokers will figure out how to invest your money based on the budget and target you have. Not only those experts will handle the investments on your behalf but there isn’t a minimum deposit amount, and you can increase your investments in steps. Fees usually are very reasonable at around 0.25%
Put your savings in low-initial-investment mutual funds
Mutual funds are investments made on a portfolio of stocks and bonds with a single transaction. It is perfect for new investors however they do require a minimum investment of around £500 to £5,000. If you only have little savings, this might be out of reach although some mutual fund companies will reduce the account minimums if you make a fix monthly investments of between £50 and £100.
Automatic investments it is particularly interesting if you can do it via payroll savings. You can set up an automatic deposit through your payroll in the same way you can do it with the employer-sponsored retirement plan.
Take Advantage Of Online Casino offers
Yes, we are not joking, but we are not telling you to go to a casino and gamble your savings either. As you can see on dedicated sites like CasinoBiggestBonus.com the competition between online casino operators is so fierce that they are offering huge bonuses to new customers that will merely register or make a little deposit. Taking advantage of the best offers can be a speedy way to increase your savings amount with minimal risks. It is essential however that you don’t get too greedy and start gambling for real.
There are lots of different ways to start investing even with tiny budgets. All you need to do is to have a plan and start somewhere. Once you have a habit, you will begin to see the benefits and the positive impact with your financial situation that will become stronger and stronger every single day.