Got $1? $5? $50? 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 only have $1 and some change to spare…
Rounding up purchases to the nearest dollar is all the rage right now. Those remaining pennies add up fast.
Acorns is embracing the trend and allows you to start investing with just a handful of change. Plus, it’s all done with a few taps on your phone.
Once you download the free app, you’ll pick your portfolio based on your age, income level and your aggressiveness. Acorns determines the rest; you don’t have to pick and choose individual investments.
Then, if you so choose to round-up your transactions to the nearest dollar, that spare change will stack up until it hits $5, which will trickle into your investments.
Each month, you’ll pay $1 for the service. If you work your way over $5,000, you’ll be charged 0.25% of your balance a year.
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.
Your first month is free. After that, 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 $50 to spare…
Investing can be a great way to grow your money, but have you carefully considered which companies you’re willing to back? Their morals and values? You probably wouldn’t want to invest in a company that’s destroying our oceans or cheating the system.
Impact investing is a simple fix. It adds a new layer of transparency to investing. Take Swell Investing, an SEC-registered investment advisor.
Swell offers investors (beginners to advanced) the chance to invest in high-growth companies committed to solving global challenges. “Swell is built on a belief that today’s biggest challenges will result in tomorrow’s leading industries,” its website says. And it makes cents — err, sense.
You can start with just $50 and invest in portfolios committed to clean water, zero waste, renewable energy or disease eradication, to name a few.
The portfolios aren’t just clouded with these do-good names. Interested investors can tap into each to learn more about the portfolio’s trends, performance and companies.
Swell doesn’t have any trading fees, price tiers or expense ratios. It does charge a 0.75% annual fee — that’s about the cost of one coffee ($3.75) per year if you invest $500.
Really, impact investing is a solid way to help tackle the world’s biggest challenges — while you face perhaps your biggest challenge: saving for retirement.
Get started with Swell by signing up with your email address here.
Disclosure: We have a financial relationship with Swell Investing LLC and will be compensated if consumers apply for an account and/or fund an account with Swell through links in our content. However, the analysis and opinions expressed here are our own.
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.