5 Ways to Start Investing With Little Money

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5 Ways to Start Investing With Little Money

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  • Post last modified:01/07/2023
Starting to invest with little money can be challenging, but it’s not impossible. Here are five ways you can get started:

1. Invest in low-cost index funds:

Index funds are a type of mutual fund that tracks a market index, such as the S&P 500. They offer a low-cost way to diversify your portfolio and can be purchased through an online brokerage account with a small initial investment. Many brokerages have no minimum investment requirement for index funds, so you can start investing with as little as you like.

2. Use a Robo-advisor:

A robo-advisor is an online investment platform that uses algorithms to build and manage your portfolio. Many robo-advisors have no minimum investment requirements and offer low fees, making them a good option for beginners. The platform will ask you to answer a series of questions to determine your risk tolerance and investment goals, and then create a portfolio of low-cost index funds that align with your profile.

3. Consider fractional shares:

Fractional shares allow you to purchase a portion of a stock, rather than having to buy an entire share. This can make it easier to diversify your portfolio with a smaller amount of money. . Some brokerages offer fractional share trading, allowing you to buy as little as $1 worth of a stock.

4. Start with a high-yield savings account:

While savings accounts don’t offer the highest returns, they are a safe place to start investing and can help you build a foundation of savings that you can use to invest in other options in the future. Look for a high-yield savings account that offers a competitive interest rate and has no minimum balance requirement or fees.

5. Use a micro-investing app:

Micro-investing apps allow you to invest small amounts of money, often through automatic investments of spare change from your purchases. These apps typically have low fees and are a good way to get started with investing without a large initial investment. Some popular micro-investing apps include Acorns and Stash.

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