October 14

How To Start Investing Even If You Aren’t Rich Yet

There is a common myth that investing is something you do once you get rich. After all, money is a rich man's game, right? In truth, the stock market and investment-based financial products are more available to someone living a normal working life than most people realize. Buying a few stocks on the market, savings accounts that gain value based on the stock market, and buying property that increases in value over time are all ways that you can start investing before you have a ridiculous amount of excess cash on hand.

In fact, what often goes unmentioned is that many people who are wealthy today got started investing when they didn't have a lot of money, and that is part of what helped them make the transition to greater wealth. So how can you get started investing if you're not wealthy yet? Let's take a look at some of the most approachable options for early investment.

1) Experiment with Penny Stocks

If you want to get a feel for the stock market – watching trends and predicting the rise and fall of company stocks – start with the penny stocks. These are stocks that cost far less than a dollar per share, meaning you can pick up a few dozen shares of a few dozen companies to start your first portfolio. Most of the time, penny stocks won't make you a lot of money, but making $5 off of a $2 investment is also great practice for carefully selecting larger stocks to invest in and earn gains from later on.

2) Open an Investment Savings Account

Not all investments require you to manage a stock portfolio or know anything about smart investing. Many savings accounts, especially those designed for long-term savings, are managed using investments. The bank quietly invests the money you spend and your interest rate and/or returns are determined by how well those investments do. Considering that financial institutions are experts at safe and profitable investments, this is a great way to get started benefiting from investments with only the account minimum to get started.

3) Invest a Steady Amount Each Month

Whether you are investing in stocks or through investment-backed savings, the best way to build wealth with your investments is to invest steadily. Treat your investment plan like your retirement savings. The more you put in, the more you can make back. Let's say you put in $100 into a portfolio of modestly priced stocks to start with. If you put in another $100 each month, or even less, when the value of those stocks rises to profit, you'll have more stocks and make greater gains over time. With stable investments, this acts as a savings account and a source of slowly self-generating funds.

4) Maximize Your Retirement Contributions

Did you know that many employer-managed retirement accounts are investment-based? Your 401k, for example, is usually invested in a selection of mutual funds along with the money from other retirement accounts with your employer. You can gain the benefit of those safe investments (and increase your retirement funds) by maximizing your retirement contributions. Put in as much as you can financially or legally each year so that the returns build up into a larger total sum.

5) Robo Advisor Investment Apps

Many people are getting started investing through a new wave of stock market mobile apps called Robo Advisors which provide basic automated advice on funds and stocks by sector that will make stable, safe investments. You tell the robo-advisor your budget and investment priorities, and it makes suggestions or offers to build you a basic portfolio with your funds. This is a great way to get your first experience in investing, though robo-advisors are rarely used for more experienced, strategic, or larger investments.

6) Buy a Treasury Bond

Treasury bonds are rarely mentioned alternative for long-term investment. These provide a fixed rate of interest and a set duration. When the duration is done, you receive your investment plus the interest, guaranteed. They are the most reliable investment because the payout is guaranteed instead of relying on a company's stock market value, however, most stable funds are comparably sure.

7) Invest through Property

Finally, you can also invest through various types of properties. Buying a house is one type of investment that many people choose for personal and lifestyle reasons. From there, you might invest in rental homes for a source of income and long-term property value investment. Some people find success through investing in collectible items that are guaranteed to gain value over time, though this method is based strongly on niche markets and discontinued products.

You don't have to be wealthy to begin gaining wealth from investment. It only takes a small initial investment to begin building a portfolio or start a savings account that will begin growing gains through safe, positive trending investments. Are you ready to start your first investment strategy toward long-term wealth? Contact us today.


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