Many people are mistakenly under the impression that they can’t invest because they believe you need a lot of money to get started, but the reality is that you can begin investing for as little as $100 a month. The key is to make investing a habit, which will result in being in a much better financial position down the road.
While savings bonds, also referred to as treasury securities, aren’t a way to get rich, they can be a great way to earn some interest until you’re able to invest in higher risk/higher return options. You simply buy them through the bond portal Treasury Direct through the US Treasury. They can be purchased with maturities that range from 30 days to 30 years in denominations as low as $100.
Use a Robo-Advisor
When you only have a small amount of money to invest, you don’t want to be paying large broker fees. Robo-advisors like Wealthsimple and Acorns provide online automated investing services. You enter your risk tolerance and goals, and the computer will do the rest, selecting investments based on your input. There is no account minimum, and you can even invest your spare change by linking debit and credit cards to Acorns. This robo-advisor rounds up each purchase to the nearest dollar and then invests that change in a diversified portfolio. The minimum balance to get started is only $5 a month. Accounts worth less than $5,000 are charged $1 a month so you’ll want to take that into consideration.
Lend to Others in Need and Earn Interest in the Process: P2P
P2P, or peer-to-peer lending, allows you to invest in others lives and earn interest too. This can be done for a variety of things, whether it’s for Atlanta real estate or stock. You’ll lend to borrowers through an online service that brings lenders and borrowers together. There are a number of options, like Prosper and Lending Club, which allows you to either automatically invest using specific investment criteria or manually investing by browsing various loans and choosing the ones you prefer. Some are riskier than others, but this information is provided to users so you can make the best decision possible.
While in most cases you have to have thousands of dollars to invest in real estate, Fundrise makes it possible with as little as $500. It allows you to invest in real estate without having to become a landlord or “flip” a house as it’s invested in real estate developments. When they make money, you make money, with historical annual returns at 8.7 to 12.4 percent. It pinpoints the most profitable real estate projects for you to invest in based on your particular goals.
Many companies, including Charles Schwab, don’t have a minimum balance requirement for investing in index funds. You can invest even just $100 in a variety of stocks, with the basic index fund following the S&P 500, though there are many other options.
Online Brokerage Firms
You can open up an account with an online brokerage firm with a relatively small amount. There is no minimum initial deposit to open an account with TD Ameritrade, while E*trade has a minimum of just $500. The advantage is that you’ll get a wider range of investment choices than you’d be able to get with direct investments alone.