3 Ways to Start Investing without Much Money

We all know that we need to invest our money if we want to make the most out of it. Leaving your extra cash sitting around in your bank account won’t help it to grow quickly. Since you work hard for your money, you want to make sure that it’s working hard for you in return. 

One of the biggest mistakes that people make when it comes to investing, is that they assume they’ll only be able to get started when they have a lot of money to spend. However, you don’t necessarily need to go and take out a loan just so you can start an investment fund – unless you think that’s a good idea. You can start investing with very little money upfront using some of the following options. 

  1. Use Investing Apps 

The digital world has made a lot of things easier for today’s investors. For instance, you can sign up to spend your money with an online discount broker that allows you to start spending small amounts of money on huge investment opportunities. For just a few dollars, you’ll be able to create an automated investment plan that keeps your portfolio growing bigger and more diversified all of the time. Keep in mind that some brokers will impose restrictions on your account depending on how much you invest. 

Another option is to use one of the investing apps that are available for your smartphone. These apps are quickly growing in popularity. Some of them allow you to round up the change from your previous purchases and put them towards your investment, Others simply help you to keep track of your investments into tiny fractional shares. 

Like online brokers, investing apps can charge their own fees and service costs depending on who you go with. The investment choices offered can also vary widely depending on your chosen app. What’s more, each available option will come with an investing minimum to get you started. For some, you can start at $0, for others, you’ll need to start with at least $100 or more. 

  1. Try Investing in ETFs 

If you’re thinking of investing in something like a mutual fund to help with your stock diversification, but you don’t have a high amount of cash to get started, you could consider ETFs instead. Exchange-traded funds are a kind of investment opportunity that doesn’t come with any minimum on the initial investment you need to make. ETFs generally trade a lot like typical stocks. They have a specific share price to consider, and they can be available through most brokers too. With an ETF, you can buy just a handful of shares, as long as you have enough money to buy those individual investments. 

ETFs are pretty valuable for a lot of beginner investors, but they don’t come without their drawbacks. For instance, you need to purchase the whole selection of shares unless you’re going through a specific type of account. Additionally, most of the time you’ll need to pay a trading commission whenever you make a trade using an ETF too. Since commissions can generally run between $4.50 and $11 for every trade, the cost can quickly eat into your investment. 

Fortunately, if you purchase your ETFs less frequently than you would other shares, and using slightly larger amounts, you can keep transaction costs relatively low. 

  1. Look for Companies with Low Minimums

Finally, one easy way to get started with your investments without spending a lot of money, is to consider funding companies that provide low minimums. There are a lot of brokers out there that require a minimum investment for you to get started. For many people, this could mean that it takes a lot of time and effort to save up that kind of money. Some no-load fund companies like Vanguard charge up to $3000 for a single investment. Luckily, there are some other no-load fund options out there that cater to newer investments. 

For instance, one option might be to check out the Charles Schwab company, which offers a tiny $100 minimum on the no-load investment funds available from the company. There are also some alternatives that come with absolutely no minimum at all. The lower the minimum for your investment opportunity, the less you’ll have to worry about having enough money to get started with your investment. You’ll be able to jump into an investment portfolio whenever you think that the time is right.