It is great to invest especially when the future is unknown. However, many people might say that they will love to invest, but their funds are limited. Nevertheless, there are various ways you can invest for as low as $5 to $50 in some cases. You also can invest for an amount of more than $100 to $1,000 per month to get a profitable return. With all this said, the following includes various ways you can invest with limited income:
1. Savings Accounts
This should be your first option where you can earn interest on your money in the bank. You can easily open a saving account for as low as $100 in some cases. However, the interest rates are low, ranging from .5% to approximately 3%. Also, these are risk-free investments in which FDIC bank accounts provide total protection for up to $250,000.
2. Robo Advisors
Robo advisors are particular investment programs that assist in enhancing capability and maximizing your wealth. It is ideal for an individual who can not afford to hire a full-time financial advisor to oversee his/her assets. Some of the most popular Robo advisors are Wealthfront, M1 Finance, and Betterment.
3. Utilizing Micro-Savings App
Micro-Savings apps are as the name implies: They are apps in which you can invest a smaller amount of money than a regular savings account. You can pay as low as $25 per month in some cases, $5 in other cases, and even spare change round-ups. Stash is a good example of Robo-advisors.
4. Public
Public is an option where you can purchase fractional stock shares. There are no account minimums and no fees for trade commissions. To sign up, all you have to do is to download the app and then choose your investment amount.
5. P2P Lending
P2P Lending is becoming a popular, alternative to traditional loans. A pool of investors put their resources and money into an account, and the bank will have total control over which business projects or loans they want without the input of the investors. Lending Club is a leading P2P platform for borrowers and investors.
6. Employer’s Investment Plan
Enrolling in a retirement plan is a good option under your employer if you are on a tight budget. You can contribute as little as 1% of your salary to the plan.
A deduction of 1% of your salary is hardly something you will miss. But the contribution gets matched by your employer and you also get a tax reduction for contributing to the plan.
7. Mutual Funds
This is a portfolio of bonds and stocks that are managed by experienced financial advisors and stockbrokers. You must invest at least $500 to $2,000. You also must maintain your fund balance. In some investment firms, you can start investing with as low as $100 to $250, but you must deposit $50 to $100 monthly when starting with such a low balance. Some of the best online brokers for this type of investment include Ally Invest, E*Trade, and TD Ameritrade.
8. Pay Off High-Interest Debt
Your budget could be significantly drained when you have debt with high-interest rates. So, it is best to eliminate debt from high-interest credit cards, student loans, etc. Also, the astronomical interest rate for many credit cards can range from 15% to 30% annually.
When you double down on this high debt, your credit will improve significantly, and you will be eligible for credit cards, car payments, and more with very low-interest rates. You can just imagine how much money you will have in your possession to invest more, save more, and to splurge.
Conclusion
Taking these steps above will go a long way with your investment portfolio. Even the ones with a very small investment will eventually be very beneficial.