How to start investing with a small budget?

By Stephen O.

Are you thinking about investing? But not sure how to start? Or thinking about starting multiple income streams but has a minimal budget? Or have a very minimum budget on the stock market, and you don’t know where to invest to?


No worries. We understand that the word investing is often stigmatizing, with corporate capitalism and very risky business that may lose up to millions! But investing does not have to be like that, you can always start small and lose small, what is economics without a little bit of risk. Here are a few investment methods you can start with a low budget.


1. The Cookie jar Approach

Investment and savings come side-to-side. To start investing, you need to start saving up. This approach is a straightforward approach that even children could start this investing.

Imagine this, you have never been a saver, wind up spending most of your incomes paying up bills, utilities, debts, and food. But try putting aside $10, every week, in your cookie jar, shoebox or an envelope. Do this consistently, and in over a year you will at least come around with $500 in a year. The key here is consistency.

And the cool thing now is you do not need a cookie jar or a shoebox for this. You got the electronic bank system to help you with this.

A few recommendations for this;

Bank Annual Percentage Yield Minimum Balance



Marcus, Goldman and Sachs

1.05%

$0




Discover Bank

1.15%

$1




CIBC

1.01%

$0





2. Real-estate crowdfunding



It is not news that many investors invest in real estate, and many millionaires became millionaires with real estate investment. But do you know that you no longer need a massive sum of budget to start investing on real estate?

“real estate crowdfunding” makes it possible to own fractional shares of large commercial properties without the headache of being a landlord. You share the cost and risk with other investors, and you have no responsibility for maintaining the property (or even doing the paperwork to buy it!)

A recommended platform for crowdfunding real estate would be Fundrise, and you simply need a starting minimum investment of $500. And Fundrise offers a 90 days satisfaction guarantee.

Worth to check out!

3. Robo-advisors.

Robo-advisors has been around for almost a decade now, and yet still many are not aware of its existence. They make investing a simple as possible and alas, you do not even need prior knowledge or experience even to start investing.

Robo advisors would ask you several questions to determine your goals and risk tolerance. It will invest your money in a diversified and low-cost stock investment and bonds. Robo-advisors would later use algorithms to rebalance your portfolio and optimize it for taxes continually.

Sounds too good to be true, right? The only downside to Robo-advisors is their price, although most Robo-advisors need at least $500 to start. And Robo-advisors charge an annual fee of 0.25% equal to a small percentage of your balance. So, if you invest $10,000, you’ll pay $25 a year. Although it is not much money, if you add up more thousands of dollars, the number will increase. Not bad right?


Here are a few recommendations.

1. M1 Finance

M1 Finance charges no commissions or management fees, and their minimum starting balance is just $100.

2. Betterment

If you have less than $100, try Betterment. Like M1 Finance, it’s great for beginners

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