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How to Start Investing with Little Money

Contents

Are you thinking of investing but worried that you do not have enough capital to get started? If the answer is yes, then think again. Now more than ever, there are a huge number of ways that you can start investing your money without having a “fortune” from the outset.

Here we will take a look at several ways that you can start investing even with small amounts of money, in many cases, even as little as $50 a month can get you on the investing roadmap. Every long journey starts with a single step, and today there are more ways than ever before to take that first step.

Open an Account with an Online Discount Broker

Whether it’s trading stocks, forex, bonds, options, ETFs, or other assets, the barriers to entry for opening a brokerage account have never been lower. No longer do you need to call up or visit a traditional full service broker and deal with the huge minimum deposits, trade amounts, and fees.

There are now so many great discount brokers to choose from, most of whom provide a wide range of features, are very transparent and trustworthy, and most importantly are accessible in terms of fees and trading costs. Many of these brokers have minimum deposits starting as low as $10. The minimum trade sizes are also flexible with many of these brokers in ways that they have not been in the past with traditional brokers.

With an online discount broker, if you are trading forex, then they will often accommodate trading in micro or nano lots which means you could open positions for as little as $10 or even less. When it comes to trading stocks or others assets, platforms now offer fractional trading in many stocks. This is a great way in which you can get into the market, and be invested in some of the biggest companies in the world, with a much lower starting cost.

Try Real Estate Crowdfunding

Another great way you can get started at a fraction of the cost in real estate is by joining one of the real estate crowdfunding platforms. These have grown in popularity hugely in recent years, and they give you the chance to invest in a range of different real estate assets types such as REITs, single property investments, and whole property portfolios, for a great value low investment.

The minimum investment amount here will depend on the platform, but you can often get started with as little as $100. Both short and longer term investments are often catered for which can range from 3-months to several years, and they are typically risk assessed and provide varying levels of return based on this level of risk. These returns can often be greater than you would receive from traditional forms of real estate investing, and this is often a lower risk strategy too since the whole concept of real estate crowdfunding is to pool your money together with a number of others in providing the required funds.

If you are looking for a low-cost investment that can be easy to manage, and can break down the barriers to entry on a lucrative sector, then this may be the ideal low-cost starting investment for you.

Get Started with a Robo-Advisor

Robo-Advisors are another method that have been steadily gaining in popularity in recent years. They not only make low-cost investments possible for you as a trader, but they also save you a lot of time by taking almost all of the work out of your hands.

This style of investment is now more accessible than ever before. You can get started using a robo-advisor with a very low minimum deposit, and the fees are also exceptional value. These are typically a small percentage of your assets under management, or with some, a set fee amount. Either way, they represent great value for money. Added to that, once you have set the parameters for your trading risk, the robo-advisor will make the required adjustments to your portfolio to keep you within your selected range to keep it optimized.

So, if you are searching for a great value investment that you can start with a little money, and is more hands off, saving you time too, then using a robo-advisor service may be the ideal choice.

Invest in ETFs

Another excellent way that you can start investing on a lower budget is through buying ETFS or Mutual Funds. These are both typically bundled investments in the sense that you are investing in a wide portfolio of companies.

With ETFs, you will be able to buy into the whole package of companies at a set share price. This can be much more affordable and economic than if you were to invest company as a single stock. The ETF share price is typically lower again and more accessible than the minimum investment if you choose mutual funds.

When it comes to returns, these are dependent on the performance of the companies within the ETF and how it is balanced, though you can choose one which is weighted in a favorable way towards where you would like to invest. With ETFs, you will automatically have a very diversified portfolio, and you will be able to choose one which fits your risk profile. When it comes to dividends, you can also receive these when you are trading with some ETFs. They will be made on a pro-rated basis depending on the stocks which are in your ETFs.

Final Thoughts

It is clear just from looking at a few of the investment methods above that, in today’s market, regardless the size of your budget, there are definitely ways available to get in on the action. Brokers across all markets are now more accessible than ever. With low minimum deposits, flexible trade sizes, low fees, and generally very safe and user-friendly trading environments. With that said, there is no reason not to take the first steps on your investment journey.

About the author

Kate Leaman

Kate Leaman

Kate Leaman is the Chief Analyst and author at InvestorGreg. She won the Sky News Fiona McDiarmad award and subsequently became a journalist for Sky News. Read more

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