Most people will agree if you say it’s easy to invest if you already have a lot of money. But how to invest small amounts of money in 2021. No doubt, we can’t overemphasize the importance of investment in the present-day U.S. economy. Most importantly, when the world is currently experiencing economic recessions due to the nova coronavirus. This event has dramatically led to the breakdown of several businesses within the United States and around the globe. You agree with us-many investors reap the benefits of their investments during the several lockdown periods across the U.S.
How To Invest Small Amounts Of Money In 2021
On this note, investment is the key to human survival. Think investment no matter how big or small. Remember,
the money you invest – is a slave to work for you in the future
This statement is visible during the pandemic among those who invested their little cash in various businesses before the global pandemic. In this blog post, we shall be monitoring top ways on how to invest small amounts of money. Before we proceed, let’s take a look at why it is significant to invest your money.
Why Should You Invest Your Small Amount?
There are multiple reasons or benefits why you should prioritize investing your small amount of money. For the sake of this blog post, we shall be listing a few reasons.
- Financial security
- Multiple Streams of Income
- Passive Income
- Ability to plan and execute projects
Financial Security
Investing your money makes you grow financially. It further guarantees your financial stability. You don’t have to worry about where the next payment of bills would emanate. Investing in your small amounts prepares you for unforeseen circumstances.
Multiple Streams Of Income
No one becomes wealthy by a single paycheck. Investing your little money creates an avenue for multiple streams of income. Never rely on one source of income- it’s detrimental to do so. Always look for investment options where you can stake at least 1 to 10% of your income.
Passive Income
No income source like a residual income; you earn while you sleep. You should invest; why you still can. You don’t have to work for everything. Time will come when you cannot go to your regular job. The money you invest today would be your saving grace.
Ability To Plan And Execute Projects
Without money, you are limited, but money gives you the umbrella to plan and execute projects with ease. Show me a man without money, and we can tell you how frustrated and unorganized he is. If you have a reliable investment, you have time and resources to plan for future projects.
The above reasons are some of the numerous benefits of why investing your small amounts of money worth every dime you put or invest.
Top 2021 Ways To Invest Small Amounts Of Money
Since you now understand the reason why you should invest your small money. Let’s get down to the main essence of this blog post. Here we shall be looking at the best approach on how to put your little money to work. Below are the most proven ways to begin your investment journey with little capital.
- Invest in Precious Metals
- Register in Your Company’s Investment Plan (Retirement Fund)
- Decent Savings Accounts
- P2P Lending Platforms
- Try out the stock market
- Avoid High-Interest Debt
- Invest in Real Estate Business
- Consider Robo Advisors
- Lending Club Investment
- Robinhood
Invest In Precious Metals
Are you looking for an investment opportunity for your little capital? Look no further. Investing in precious metals like gold is an ideal way to put your money to productive use. These precious metals appreciate the time, and you would be glad you invest your small amounts of money.
There are risks in investing in precious metals, but the profits outweigh the risks. Gold has increased by 300% during the last three decades. Investing in gold or other precious metals is the best way to start investing your little sum. But be aware. Always only invest money that you don’t need. There could be an unknown risk, which leads to losing a lot of your investment, especially for beginners.
Register In Your Company’s Investment Plan (Retirement Fund)
Here is another stress-free way to invest little money. You can invest in your employer’s investment plan if you are low on budget and cannot spare huge cash for investment. 1% of your salary will be just fine. You don’t need to contribute a large sum of your income.
You can begin with 1%, but you are not permitted to remain the same way you started. As time progresses, you can increase it to 2 to 4%. This investment can serve as a retirement fund for you.
Decent Savings Accounts
Another way you can invest your small amounts of money is through consistent savings. The opening of a savings account is the primary option to begin your investment journey. You can make a profit from the money you save. A savings account is seamless to open. With little as $100, you are good to go.
Though the profit rates are low, about 0.50% to 3.00%, but over time, it will appreciate. One of the main advantages of savings accounts is, it’s risk-free. Many individuals begin their first investments through savings accounts.
P2P Lending Platforms
P2P investments have become one of the best ways to invest small amounts of money in today’s changing world. It has become an alternative to traditional bank loans. Many small investors like you put money into a bank account, and resources are pooled together for investment. The bank control and manage the project or business the investors want to fund.
P2P lending allows investors to have a say over their investment capital. Here the borrower gets a flexible loan without hassle. One unique benefit of P2P lending platforms over saving accounts or CD is the higher yield rate. The return on investment is always high compared to the return you get from savings accounts.
Try Out The Stock Market
Stock market investment is one of the most striving and promising investments in today’s digital world. Unlike before, you can begin your stock market business with small capital. Money used to be a barrier but has become old fashion. The presence of mobile phones and internet services has done this business to be a lucrative venture.
The stock market is accessible anywhere and anytime. All you need is a smartphone and internet connection. You can start with a small amount and increase as you progress. There are varied options; you can start as low as $1. You invest without any form of commission. But as mentioned before, be aware! Investing in the stock market contains high risk, leading to losing all of your investment, especially for beginners.
Avoid High-Interest Debt
A wise investment is not all about putting your money into multiple projects but the ability to limit high-interest debt. Clearing off debt gives you access to improve your financial situation. If you like to put your money into an investment account, you should make sure your credit card debt is minimal. Undoubtedly, credit cards have an extreme interest rate (15% to 30% within a year). Avoid debt to save for the future.
Invest In Real Estate Business
Gone are the days when you need to have some chunk of money before penetrating the real estate market. In recent times, anybody with small amounts of money can invest in a real estate business popularly called “Real Estate Crowdfunding” The investment option gives you an ample opportunity to own fractional shares of large properties.
In other words, you and others invest your resource (pool) to buy some real estate properties. You become a partial co-owner of commercial property. You get profit from the rent or sale of the property. Therefore, your return on investment bases on the percent of your actual investment. With crowdfunding, you can begin with $500 to test the water.
Consider Robo Advisors
Becoming a professional investment manager comes with different challenges, like the vast amount to be paid. To invest your money wisely, you need someone to guide you, so you don’t invest wrongly. Robo advisors allow you to choose different investment options like dividend stocks, U.S. stocks, natural resources, foreign stocks, emerging market bonds, real estate, and more.
You don’t have to employ an investment manager. Instead, you can use Robo Advisors near you to manage your investment at an affordable rate (0.25% per annual rate). Robo Advisors helps you maximize wealth and boost your investment capacity. This investment is suitable for individuals without the financial strength to hire a full-time financial advisor to manage their investment portfolios.
Lending Club Investment
You can make your money work for you by becoming a lender on the Lending Club platform. Lending Club remains one of the best and the largest P2P lending platform in the United States. It strictly addresses both investors and borrowers. The platform offers users different account options such as individual accounts, joint accounts, or corporate accounts.
You can start investing as low as $1000 for a 3 to 5 years plan. The investment platform has concluded over $45 billion worth of loan transactions since inceptions. It has a defined operational model that guarantees the safety of your investment.
Robinhood
Here is another investment app, the last on the list. The app allows you to buy and sell shares and ETFs. You can also trade cryptocurrencies like bitcoin and other altcoins. You don’t need to pay a commission before you can invest. There is no minimum account balance. Robinhood offers various investment options.
The Bottom Line
On the final note, there are multiple ways of investing your small amounts of money in today’s economy. All that you required is to do your due diligence to ascertain the investment type. Suitable for you and your size of investment capital. As you know, investment comes with risks, especially for beginners. There are risks which not everybody recognizes in the first place. But with time comes experience, which can be one of many tools to manage the risk. In the end, it’s like a big player in the investment industry once said:
The hardest thing to judge is what level of risk is safe.
George Soros
