How to Invest Without Much Money

Investing your money is one of the wisest decisions you will ever make, but many people worry that they don't have enough saved up to invest. In reality, the statement that only the wealthy can afford to invest their money is one of the biggest myths ever. The best way one can build wealth over time is to invest whatever amounts have been saved up, even if they seem minuscule at first. Setup a detailed plan for how you want to go about investing your savings and keep close track of exactly how you are doing in sticking to it over time.

How should you get started saving money to invest?

The best way to save up some money is to set aside a certain amount, even if its tiny, on a pre-scheduled date. While many like to just say that they will invest some when they have some extra, if they don't set aside that little bit ahead of time, it will never get invested. For example, set aside $10 every week to invest and work backwards from that with all of your spending. If you have this set amount you can then adjust your spending habits to account for the new savings.

Where can I invest my money?

There are numerous places you can invest your money and as technology grows, the options continue to grow more plentiful. Your local bank is the most obvious place you can go, but it's far from the only one. Online discount brokerages have grown more popular and have added more investing tools over the years. Local financial advisors also can be an option to use to invest your money, although many of these require larger minimums. If your interested in mutual funds, dealing directly through the mutual fund company can also have some nice advantages.

Tools for investing without much money:

-DRIP (Dividend Reinvestment Plan)- A DRIP allows the investor to purchase partial shares in a stock, and allows the dividends to be reinvested in the stock.
Most of these plans allow you to start with a minimum as low as $25, or even as low as $10. This is a great way to buy individual stocks with very little cash.

-IRA's- Most IRA accounts have fairly low minimum investment amounts, and they are a tremendous investment. The tax advantages of IRA's are so great that an investor is losing out in a big way if they don't take complete advantage of this investment tool.

-Index funds- If you want to get into mutual funds, but have very little money to do, the easiest way is generally through an index fund. Index funds typically have the lowest minimums and they also have very low expense ratios. Some index funds allow you to start investing with just $250.

-Treasury Bonds- Recently Treasury Bonds were opened up to investors with a minimum of just $100, rather than the previous $1,000. Treasury bonds are very safe and are an effective way to start a portfolio.

Don't Use The Excuse of Having Too Little

With all of the tools now available, there are simply no excuses for saying that you don't have enough money to invest. Every few dollars that you invest has the potential to bring you a large sum in the future with compounded returns. The truth is, you can't afford to not invest, even if you have very little!