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by on February 26, 2019

Some people think that you must have a huge income to start investing, but this could not be farther from the truth. You can start investing even with small amounts. There are many options available for investing with various amounts—even for the seemingly tiny ones. The most important thing is to start investing, and you will be surprised by the big rewards you may reap from those small amounts.

So, what are some of the ways you can start investing with tiny amounts?

The cookie jar approach

Saving and investment are inseparable. If you do not have a big income, start by setting aside small amounts, like $10 every week. In a year’s time, you will have a good amount exceeding $500, which you can transfer to a real investment vehicle. By putting a small amount in an envelope, a  small safe, or even a cookie jar, you will have started cultivating the important habit of living on less than your income and putting some savings away in a safe place. In this era of electronic and mobile banking, you could open an online savings account that is separate from your current or checking account. The amount in the account is only accessible in two business days when you need it, and it is delinked from your debit card. In the same way as a cookie jar, you can withdraw the amount and put it in an investment.

Having learned to live on less than your income and to save some money will ensure that you avoid getting into bad credit situations that ruin your credit score. However, if you have credit score issues, all is not lost, as you can engage professionals like Boostcredit101 to help you improve your score.

Low initial investment mutual funds

With mutual funds, you can invest in an assortment of stocks and bonds by doing a single transaction, which renders them favorable for new investors. However, mutual funds require some minimum starting amounts in the range of $500-$5000, which could be a tall order for first-time investors. The good news is that some mutual funds companies can put aside the requirement if an investor commits to automated monthly remittances from $50 to $100. You can have a check-off arrangement with your employer, as you do for an employer-sponsored retirement plan.

Employer’s retirement plan

Despite your meager pay, you could enroll in your employer-sponsored retirement plan and start investing with tiny amounts so that you hardly feel the pinch. What if you decide to invest 1 percent of your pay in your employer’s plan? You will most likely not be missing such small contributions, and even better, your contribution will be reduced after tax deductions. You could go on to gradually increase your contributions each year, even if it’s by just 1 percent. Moreover, you could match the increase with your annual salary increment so that you even hardly notice the increased deduction. In case your employer contributes the equal amount of your contribution towards your saving, the plan will be even more awesome.

Robo-investing solutions

Robo-advisors make investing easy and accessible, as they do not require any investing experience from you and it is easy to get started. You only pay low fees and have automated intelligence monitoring your investments in the background. Some robo-investing solutions include:

·   Betterment- This is ideal if you’re just starting and have small amounts, even less than $100. There is no minimum starting balance. It’s ideal for beginners, as it offers a very easy platform and approach, thereby investing without any hassle on the investor.

·   M1 finance- With at least $100, you can start investing with M1 finance. It has no commission or management fees. You can use one of their pre-made portfolios or tailor yours by buying stocks or exchange-traded funds (ETFs) through their site. The greatest advantage is that their user interface is unbelievably easy to use.

·   Swell- If you have at least $50 and are cautious to invest in a socially responsible way—not in industries like tobacco, weapons, or others—Swell investing is your best option.

Final thoughts

There are a myriad of investing options, even with small amounts. It is on you to choose the one that best suits you and commit to it—you will thank yourself later.

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