You may be thinking that your options are limited, because you have very little money to invest. But I am here to tell you it’s never too little to start investing.
In fact, you can get started with just $5 through an investing app called Acorns.
Plus when you sign up through this link, you will get a $5 bonus in your account.
In this article, I will show you how you can start investing money in the stock market – even if you have $5 in your pocket.
How To Start Investing With Little Money
1. Start investing money as little as $5 into the stock market (Acorns).
No amount of money is too little when it comes to investing – even if it’s only $5. That’s why an investing app called Acorns has been popular among beginner investors.
Acorns takes your spare change from your regular transaction and save it and invest that change for you in a range of exchange-traded funds (ETFs). It rounds up all your transactions to the nearest dollar. And once the spare changes stack up to $5, Acorns will invest it for you.
That means if you spend $5.55 at the grocery store, 45 cents get dropped into your Acorns account. And Acorns invests it for you. The idea is that you will not miss this spare change and because the investment is automatic, it adds up fast.
While Acorns is not ideal if you’re saving for retirement, it’s a very good option for people to start saving and investing.
Plus, Acorns will give you a $5 bonus just for signing up.
So, if you feel like you don’t have enough money to invest, really your options are not limited.
Download the free app now. Once downloaded, you will pick your investment portfolio based on your age, income level and goals. Acorns will take care of the rest for you. That means, you won’t have to pick and choose individual investments.
Acorns will only charge $1 for their service. Once you have over $5000, they will charge you 0.25% of your balance every year.
2. Invest Your Money With Stash.
Alternatively, Stash lets you start with as little as $5 investment. It takes tow minutes to sign up, plus Stash will give you a $5 sign-up bonus.
3. Invest as little as $100 with M1 Finance.
M1 Finance is another way to start investing in the stock market with as little as $100. In fact, it’s a great way to invest in ETFs and index funds without worrying about picking up your own individual stocks.
M1 Finance is perhaps the best robo-advisors out there, not only because the account minimum is pretty low, but also there is no maintenance fee. That is a big advantage, especially if you have very little money to invest.
Plus you get a $10 when you refer a friend or family member. They will then use that referral link and fund their account with that $100 account minimum.
To get your referral money from M1 Finance, visit its website.
4. Your employer’s 401k plan: invest money for the future.
Without a doubt, one of the best places to invest your money is in a retirement plan. The money you invest in a retirement account grows free of taxes until you take it out. Of all of these tax-advantaged accounts, a 401k plan is the best, because you can invest as little money as you want.
The maximum you can contribute to your 401k account in 2019 is $19,000 if you’re under 59 1/2. But there is no minimum. In fact, you can invest as little as $5 every paycheck.
One you open a 401k or IRA account you can ask Blooom to help you. Blooom is an online retirement management software that can help you grow your 401k or IRA accounts.
They will do a free analysis of your account and get you personalized suggestions on how to invest your current 401k in minutes.
5. Online High Yield Savings Account.
Another logical place to invest your money even as little $100 is a high interest savings account. A high-interest savings account is different than a typical savings account, because the interest earned is multiple times higher.
For example, opening an online savings account with CIT Bank will earn you a 1.85% APY. Compare that with the interest from your local bank. And you’ll see the difference.
However, not all online savings accounts are created equal. Some charges you a fee. So it pays to shop around.
But do not worry, online banks such CIT Bank is one of the few online banks that offers accounts with no monthly fees.
6. Invest Money through a Certificate of Deposit (CD).
High interest savings accounts aren’t the only places you can invest your money. CDs can also provide you with little something in the way of interest. There are an easy way to invest little amount of money and earn interest at the same time.
All you have to do is to agree to leave a certain amount of money with a bank for a certain period of time, anywhere from a few months to several years. When the time is due, the CD matures and you receive your full amount of money back plus interest.
You will find one of the highest yielding CDs at CIT Bank. (www.citbank.com). It’s paying 1.85% APY for an 18-month term.
7. Invest money in stocks through a mutual fund.
Another safe way to invest you money is through a mutual fund. You’ll earn considerably more interest than a regular checking or savings account. A mutual fund is an invesment company where you buy stocks and bonds. A professional manager will pool your money and that of other investors together and invest it.
A downside of mutual funds is that they usually require a minimum deposit of $1,000 or $2,000 to open an account. This can be especially hard for someone with very little money to invest.
In conclusion, investing money as little as $5 is quite possible. Thanks to Acorns. Acorns rounds up your purchases up to the nearest dollar and puts the spare change into the stock market for you. It helps you save without even thinking about it. Acorns invests the money for you, allowing you to grow your savings without you studying stock prices or trades. Alternatively, you can use Stash, which does the same thing as Acorns.
- How to Save 100k: Money Saving Tips
- How to Invest 100k to Build Real Wealth
- Here’s How Much You Should Save a Month
Speak with the Right Financial Advisor
You can talk to a financial advisor who can review your finances and help you reach your goals (whether it is making more money, paying off debt, investing, buying a house, planning for retirement, saving, etc). Find one who meets your needs with SmartAsset’s free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals, get started now.