We often mistake investors as being rich business owners in suits. However, realistically anyone can become an investor. Whilst the likes of real estate may require a large minimum investment, there are many other places where you need only invest a few dollars. Here are a few ways to invest using only a small amount of money.
Use your spare change
Few of us put our spare change to good use. What if you were to invest this leftover money? Micro-investment apps have been developed to encourage just this. Rounding up every purchase to the nearest dollar, some of the apps then take the leftover cents and put them into a small savings pot. Others allow you to put one dollar per day into a small savings pot. At the end of each month, the apps chooses the best way to invest this small pot of money. The best part about using these apps is that you barely notice the money going out of your account. Sites such as https://www.moneywise.co.uk/investing detail some of the free apps out there on the market for getting into investing.
Team up with others
You may not be able to invest in certain places due to a high minimum investment, however teaming up with other investors might allow you to reach this minimum figure.
One way of doing this is to get involved in a mutual fund. These funds allow you to contribute a small amount along with other investors to a special fund ran by a fund manager. The fund manager then finds the best way of investing this collective sum of money. Sites such as https://www.marketreview.com/mutual-funds/ offer more information on mutual funds. From these funds it’s possible to make a healthy return from only a small amount money, although you may also have to pay a small fee to the fund manager to be part of the fund.
Peer-to-peer lending sites are another form of investment that allows you to team up with other investors. These sites allow you to pay loans to other users. These loans collect interest which you then make as a return. By teaming up with multiple lenders, you need only contribute a small amount, although you’ll get interest on this amount too.
Avoid risk with a savings account
If you’re worried about gambling your money away, you could consider investing it into a savings account. There are lots of different savings accounts out there all offering different interest rates. Those with the highest interest rates may have certain conditions such as a minimum starting amount or a minimum monthly payment requirement. However, by shopping around you may be able to find a savings account with a high interest rate that doesn’t require a hefty starting sum.
Look beyond banks when searching for a savings account – a government bond is technically a savings account with little if no risk attached. Some of these can have high interest rates allowing you to make a good return on your money.
In some cases, accounts may be locked for a certain amount of time so that you can put in money but can’t withdraw it. This could turn out to be a positive, preventing you from dipping into this account and allowing to make a healthy return.
Start thinking long-term
Some small investments such as peer-to-peer lending might not gain you much money short-term. However, it’s possible to keep investing your returns allowing you to accumulate more and more over time. This might allow a small amount of money to eventually turn into a large amount of money, which you can further invest with or spend on something you’ve always wanted such as a property or a dream holiday.