One of the top questions I get is what to do when you have very little money. Many people want to become wealthy, but they don’t know how to, especially if they don’t have that much money, to begin with. In today’s post, I am going to give you some of the best ways I know how to build wealth and invest when you don’t have a lot of money.
Before we go deeper into anything though, I want to caution you on something that I tell my clients all the time. Before jumping into any new endeavor, be it real estate, business, the stock market, or anything else, you have to gain knowledge, understanding, and wisdom. Never invest in something you don’t understand.
Have little money? Here are your first steps!
1.) Savings Account
The first way you can invest with little money is by starting a savings account. Now, this isn’t what people typically think of when they think about investing. However, if you don’t have much money to invest in real estate, a business or the stock market, this is the perfect place to start. Savings accounts don’t offer great interest rates, but they are a great place to start.
By investing in your own savings account, you are building wealth to invest in larger assets in the future. You can save up a down payment for a rental property! Whatever you decided to do with the money when you’ve saved it is up to you.
2.) Retirement Account
Secondly, you should invest in a retirement account. The post that I wrote on Monday outlined the differences between a Roth IRA and a Traditional IRA, which includes 401k accounts. Roth IRA’s have better tax benefits, especially when it comes time to take the money out of the account.
However, if your employer sponsors a traditional IRA, you should absolutely opt-in. Many employers will contribute or match your contributions. The nice thing about employer-sponsored IRA’s is that the contribution typically comes out of your paycheck before you even see it. That means you don’t have to transfer the money in there yourself, and you don’t have the opportunity to decide you can’t each month.
3.) Open a brokerage account
I have talked about brokerage accounts in other posts as well, but they are basically bank accounts where your money is invested for you. Many brokerage accounts can be opened with small amounts of money, like $100-$1,000, but some can also be opened with as little as $25.
Places like Charles Schwab will help you set a brokerage account up. They also will provide “normal portfolios” to you, so that the hard work of figuring out your first investment portfolio is already done for you.
I hope this post has inspired you to start your wealth journey, even if you have very little money. Nothing changes if nothing changes. Do you have any questions about building wealth or investing? Comment below!
Finally, the opportunity to invest in my non-profit, Tricord Global, is closing in just two days! Secure your spot in this investment group by contacting my office at (720) 989-0222 or email@example.com. You can also find more information here!