How to Start Investing Even if You Have No Money
Is a lack of money preventing you from investing? If yes, you are not alone.
Lacking money is one of the most common reasons why people do not invest. However, the fact that you do not have money to start an investment deal, does not mean you can not start something right now.
All you need to do is to prioritize your finances. Reduce your expenses and improve your revenues. Here are some ways on how to invest with no money for you that we have packaged for you.
If you do not have any money to start investing, you may need to check your budget. Consider your expenses and find a way to reduce. Reducing your excessive spending could save you some bucks which you can invest in some investment instruments. As time goes on, you will find it easy to cut down more unnecessary expenses and channel it to your investment.
You may choose to sell off some of the things that you no longer need. You can sell them on eBay or through any platform to make some money for you to start investing. According to Forbes, budgeting can be stress-free, it just takes planning. Saving is an optimal place to start.
Clearly, there are some investments that you would need a huge amount of money to start. However, there are plenty of ways to start investing with just a little bit of money.
The first step to saving money is to invest in a savings account, in any federally backed financial institution. You can open an account in a bank or credit union depending on your choice. However, federal credit unions are known for paying out more to the average consumer than national banks. Before you start looking for a federal credit union, make sure to weigh the pros and cons of banks and credit unions.
In short, banks are for profit organizations that tend to have higher fees, pay lower interest rates and have more locations for the average consumer. On the other hand, credit unions are non-profit, community-based, non-profit organizations that have less locations, less variety but can offer better rates.
Get Micro-Investment Apps
Most traditional investment companies require you to have more than $1,000 for you to invest. This requirement has been a turn off to several people who do not have up to that amount. However, with the introduction of micro-investment apps, things have become easier, and one can invest without having the required $1,000.
Most of these apps do not require a minimum balance for you to open an account. All you need to do is to connect your credit or debit card for them to deduct a small amount of money for investment.
For example, if you purchase an item for 75 cents and you pay with the card you connect with a micro-investing app like Acorns. The app will round up your money to $1 and invest the remaining 25 cents. Financial experts state that research shows even starting with a small investment can pay off long-term. The key is to start and to start as early as possible.
If your employer offers a retirement plan, you can contribute a percentage of your salary into the retirement plan (401k). In most cases, your employer will allow you to invest your contribution in any asset of your choice. According to U.S. News magazine, compounding interest is the key part of a retirement plan that will grow your wealth.
In case your employer does not have a retirement plan, you can contribute your money in an IRA. Some brokers like TD Ameritrade provide you with the opportunity of opening an IRA account without any initial deposit.