Got $5? $500? Here’s How to Start Investing on Any Budget
We’ve all heard the old “make your money work for you” adage, right?
That means taking basic Finance 101 steps — like investing. But sometimes we’re a little too busy working for our money and forget to invest.
And sometimes the idea of investing becomes a bit overwhelming. You might picture scenes from Wall Street, starched suits and maybe people soaking in a bathtub full of money. (That can’t just be me?)
But investing can be for everyone — even if you only have $5.
Before You Start Investing, Here’s What You Need to Do…
First of all, your ability to invest — and how much you can afford to invest — is going to depend largely on your budget, goals and capacity to face risk.
For that reason, we can’t offer tailored, personalized advice. Sorry. You’ll need a financial advisor for that.
However, we can offer an overview.
Before you invest…
- You should establish a cushy emergency fund. Ramsey suggests at least $1,000 to start, but eventually you’ll want to get that up to three to six months of living expenses.
- You should have your debt paid off. He suggests using the debt snowball effect.
If you don’t meet these two Ramsey-inspired qualifications, you can still invest; it just might not be in your best interest.
Also, you might already be investing through your employer retirement account, such as a 401(k) or IRA. Yup, that’s investing, and it’s not too scary, right?
How to Start Investing — Based on Your Budget
You don’t need thousands of dollars to start investing. You can actually start with as little as $1.
We’ve aggregated a few investing platforms and have categorized each one based on your budget.
If you have $5 to spare…
Here’s how it works: When you sign up with the SEC-registered investment adviser, you’ll gain access to more than 30 investment options.
If you don’t know where to start or already feel overwhelmed, Stash will walk you through the process with personalized assistance. It even defines any financial jargon. You’ll buy fractional shares, which basically means you can pick and choose whatever dollar amount you can afford to invest — and not what a whole share actually costs.
You’ll pay $1 per month, though if you build a portfolio of more than $5,000, you’ll be charged 0.25% per year.
It all starts with $5. And by clicking here to get your $5 bonus.
If you have $500 to spare…
Hedge funds are considered to be an elite, aggressive, strategic and sophisticated way to invest — and out of reach for most of us. Because you have to invest at least $250,000 to join most hedge funds, they act as exclusive clubs for the wealthy, with a velvet rope keeping out everyday investors
Titan says you can still get in on the action, even if you don’t have a spare quarter-million dollars sitting around. In fact, all you need to get started is $500.
Titan is a simple, user-friendly investment app that mirrors the financial moves of top hedge funds. It puts its investors’ money into a portfolio of the top 20 stocks, based on what all those hedge funds have been buying. Titan believes these stocks have the best prospects for long-term growth.
All three of Titan’s co-founders are former hedge fund guys who are now heavily invested in their Titan portfolios — the same stocks they’d be investing your savings in.
The company earns a 1% annual fee on what you invest.
This article contains general information and explains options you may have, but it is not intended to be investment advice or a personal recommendation. We can't personalize articles for our readers, so your situation may vary from the one discussed here. Please seek a licensed professional for tax advice, legal advice, financial planning advice or investment advice.