Think about the goals you could accomplish as a Christian investor with a million dollars. Here’s the truth: you do not need one million dollars to accomplish those goals! You can get on the right track if you know how to invest with little money. However, the true challenge is understanding the options available for these small investments. In this blog post, I will share five great places to start if you want to learn how to invest with little money.
They are:
- Roth IRA
- Stock market
- Social Impact
- Bonds
- Real Estate
[Related: Invest in Yourself: The Foundation of Wealth Building]
1. Roth IRA
A Roth IRA is a retirement account that allows you to save after-tax dollars. This means you pay taxes on the money you contribute to your Roth IRA now. But, you do not have to pay taxes on the money you withdraw in retirement if you meet certain requirements. For 2023, the age limit for you to withdraw from a Roth IRA is 59 ½ and you can contribute a total of $6,500 annually. These unique tax benefits make this a great investment option.
So if you are considering how to invest with little money, a Roth IRA can be an excellent starting point. But, it is crucial to open an account with an investment bank rather than a conventional one. This decision will give you access to a wider array of securities and help maximize the potential for higher returns.
2. Stock Market
As a Christian investor, your goal is to choose the best investment options for you and your family. If you are on a tight budget or do not have much time, investing in the stock market is a good way to get started. The stock market is a place where investors can buy and sell company shares, giving them ownership and the potential to profit from their growth.
In the original version of my book, Money Mastery, I used a simple analogy to help you understand what it takes to invest in the stock market. Imagine you’re at the beach and you want to cool off with a frozen treat. You have three options: gelato, ice cream, or frozen yogurt. Gelato is the richest and creamiest option, but it is also the most expensive. Ice cream is a good middle ground between cost and quality. Frozen yogurt is the cheapest option, but gelato or ice cream is more flavorful. Investing in the stock market is like frozen yogurt. It is the cheapest option, but it also has the lowest potential returns.
How to invest in the stock market with little money:
- Start small. You don’t need a lot of money to start investing. Even if you can only invest $20 or $50 monthly, that is a great start. Over time, your small investments can grow into a significant sum of money.
- Do your research. Before you invest in any stock, take the time to research the company. This includes understanding the company’s business model, financial health, and competitive landscape.
- Diversify your portfolio. Do not put all your eggs in one basket. Instead, invest in a variety of different stocks. This will help to reduce your risk.
- Get professional advice from a Christian advisor. If you need help investing, consider working with a financial advisor. A financial advisor can help you choose the right investment strategies for your needs and risk tolerance. Christian financial advisors such as the ones we have at WealthBuilders Investments will ensure that you invest in companies that abide by biblical values.
- Invest in dividend stocks. Dividend stocks pay you on a monthly, quarterly, or annual basis without having to sell the stock. It’s a win-win!
3. Social Impact
Social impact investing is a great way to multiply your finances in a way that aligns with your values. Social impact investing seeks to generate financial returns while making a positive social impact. One of the great things about social impact investing is that it is accessible to people of all income levels. There are many ways to invest in social impact, some of which require very little money.
One example of a social impact investment platform that is accessible to investors who have more money to invest is Tricord Global. Tricord Global is a platform that allows investors to invest in microfinance institutions. Microfinance institutions are lenders that provide small loans to entrepreneurs in developing countries. By investing in social impact companies, you can make a positive impact on the world while also generating financial returns.
[Related: 5 Lessons I Learned From The Parable of The Talents About Investing]
4. Series I Savings Bonds
Series I Savings Bonds can be a great option for Christian investors on a budget. When you buy a bond, you lend money to a government or corporation for a period of time. In return, you receive regular interest payments. Bonds are considered a lower-risk investment than stocks. There are several different types of bonds available, including:
- Government bonds – issued by governments to finance their operations and projects
- Corporate bonds – issued by corporations to raise money for a variety of purposes, such as expansion, research and development, and acquisitions
- Municipal bonds – issued by state and local governments to finance public works projects such as roads, schools, and hospitals
One of the key benefits of bonds for Christian investors on a budget is that they are relatively inexpensive to purchase. Many bonds can be purchased for a few hundred dollars or less. This makes them a good option for investors who are just starting out or who have a limited investment budget.
5. Real Estate
Investing in real estate is my favorite way to build wealth over time. But, it can also be expensive to get started. Creative financing can help Christian investors on a budget.
Creative financing is any financing arrangement that falls outside of traditional mortgage financing. There are many different types of creative financing arrangements available, such as owner financing, lease options, and hard money loans.
To find creative financing deals, you can search online, work with real estate agents who specialize in creative financing, or network with other Christian investors. At WealthBuilders, we have an abundance of resources to guide you in the process.
[Related:Real Estate Investing For Beginners]
In addition, your first step to investing in real estate could be purchasing your first home! First-time homebuyers can secure a home for as little as 3% down. Over time, your equity in the property will grow, and you can use your home as your bank to purchase subsequent investment properties.
Investing with little money is possible. By following the tips above, you can start building your wealth today.
Take the Next Step
Knowledge is essential for any Christian investor. If you want to dive even deeper into your financial growth journey, we want to see you at The 2024 WealthBuilders Conference. The 2024 WealthBuilders Conference is for any Christian who wants to grow their financial and business knowledge to advance the Kingdom of God. This is an opportunity to network with successful people who have stood in your shoes. If you want to learn more about investing from some of the most brilliant minds in the business, this is your opportunity. Take advantage of the early bird price of $97 until the End of Black Friday Weekend!
