For those who are in their 20s and want to play the investing game, coming up with funds is probably the hardest problem. If you want to start investing and don’t have much money, there are ways to do it in 2017 and that is the good news. In fact, the power of starting small shouldn’t be underestimated because as T. Lawrence once said, “Big things have small beginnings”. Small investments might eventually grow into a big wealth if done properly.
Here are some suggestions you might find useful:
1. Invest in yourself. Learn a skill or two, it can be anything from learning how to code to playing musical instruments. Sign up to that hip-hop dancing class you’ve always dreamed about but never actually started. Visit a museum, go to a concert or take a backpacking trip to somewhere you’ve never been to. These things will develop you and help you see things differently. Every new experience and knowledge that we get is going to be useful in our lives sooner or later.
2. Learn about ETFs. It might actually sound little confusing and complicated, but in fact it’s just another financial jargon for a generally basic thing. Exchange Traded Funds are financial portfolios that combine stocks of different companies bundled together. Putting your money into an ETF helps your money be invested in many companies at the same time. In other words, one share of an ETF equals to a small piece of a pie; while the pie itself consists of many companies mixed together.
3. Pay off credit cards with high interest rates. An average American has 2.6 credit cards, some have more, some have less or none. If you have multiple cards with high balances and you are making monthly payments, the smart thing would be to check the interest rates on those cards. Find the one with the highest rate and maximize your payments on it. Instead of seeking investments that will earn you 5-10% return, better first pay off a card that charges you 15% or more. Investing in other things is still encouraged here, but your focus should be on paying off a card that charges you high interest rate first.
4. Fractional shares. When you have smaller amounts to invest, you are limited to buying a share that is at or below your investable amount. With fractional shares as the name itself says you can buy a fraction of a share. It’s done to make investing accessible to people who can’t come up with large sums of money at once. Nowadays, as the industry of robo-advisors is growing, investing with a dollar or even as low as few cents is possible. All you need is to find them online, compare their benefits and pick the one that matches your financial needs.
By Rashid Khasanov