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8 Realistic Ways To Invest Small Amounts Of Money To Become Financially Free

8 Realistic Ways To Invest Small Amounts Of Money To Become Financially Free


Investment always gets one of two reactions from people: motivation or fear. Those who are fearful are usually crippled by the fear of the unknown as they would rather splurge on the seafood platter they’ve been eyeing all week rather than invest in something they aren’t fully convinced would be a win. The motivated, however, are inspired by the opportunity every investment brings. Yes, it all depends on perception. If you are in the latter category, this article is for you. Read on. How to invest little money.

There are several low-cost investments you can begin to get you started on the road to financial freedom. From savings to mutual funds, these investment opportunities are open to everyone, especially those with little budgets. Like most things in life, investment requires a dedicated plan and faithful consistency to achieve the desired results. By investing small amounts of money regularly, you will surely have better financial health compared to the one who clubs every Friday.

Photo: Burak Kebaber/Pexels

What is an investment plan?

An investment plan is a detailed investment process put in place to accomplish your financial goals. It maps out a clear path that takes you from where you are to where you want to be financially, using an investment vehicle.

The right investment plan begins with the identification of goals and objectives. Then you need to match those goals with your available financial resources. This means that according to the funds available, you can invest in vehicles (as highlighted below) to obtain your goals and objectives. While every investment isn’t guaranteed to make you quick bucks, it is inarguable that everyone needs an investment portfolio no matter how small. After all, little drops of water make the mighty ocean. This is how to invest small amounts of money. 

Check out 8 tips to begin investing with small amounts of money…

#1. Pay off your debt


He who lives by borrowing will almost always be at the mercy of his lender. It seems as if you never get to keep anything for yourself and consequently, are unable to grow financially. The secret to starting your journey toward financial freedom is being debt-free. So ignore those shoes and expensive wigs for now. Trust me, you will be alright eventually.

#2. Try the piggybank

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This is old but still gold. It’ll amaze you the amount of cash you save up in the long run if you will only dedicate a certain percentage of your income to savings. Whether it’s a piggy bank, cookie jar, or regular savings account, try putting away some cash often. Saving up enough to make a tangible investment is a good financial decision.

#3. Look to mutual funds

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A mutual fund is a company that pools money from many investors and invests the money in securities such as stocks, bonds, and short-term debt. This investment is a good complement to a savings account as it has a slightly higher interest rate. Although you’re unlikely to become an overnight millionaire through mutual funds, it is a step in the right direction. For a beginner, mutual funds investments are one of the easiest ways to start investing little money as you don’t need a Harvard-level education to begin.

#4. Explore stocks

Photo: Anna Nekrashevich/Pexels

The stock market is highly volatile and risky for newbie investors, so you will need to get an investment advisor before delving into this world. This shouldn’t deter you as there are lots of affordable brokers available online to help manage your portfolio. If, however, you can’t afford the fees, then research exhaustively because apt financial knowledge will get you started on the right foot. The volatility and risk factor of stocks also makes them a conducive environment for tripling your investment or losing it all. However, with constant knowledge, you too could become a savvy stock investor. No pain, no gain.

#5. Look to cryptocurrencies

Photo: Marta Branco/Pexels

One of the ways to start investing little money is to trade cryptocurrencies. There are over 3,000 different cryptocurrencies out there, but only a handful really matter. As with stocks, you have to research extensively to ensure you’re trading the right crypto. Before trading, it is advisable to look for breakouts of long-term moving averages. If this sounds like jargon, it’s an indication you need to do further research before dipping your feet into the cryptocurrency deep waters. Before diving into trading cryptocurrencies, you should also study and compare different cryptocurrency exchanges to find out which one best meets your trading experience and needs.

#6. Peer-to-peer lending for startups

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You don’t have to be a big-time venture capitalist to secure an investment in a startup with good potential. Although highly risky, peer-to-peer lending makes it possible for you to be part of the success story of the next big business. Crowdfunders connect investors with money to lend and entrepreneurs trying to fund new ventures. As the loans are repaid, investors receive a share of the interest in proportion to the amount they have invested. This is highly volatile due to the fact that many new ventures fail, but when they work, the earnings are pretty high. 

#7. Real estate crowdfunding

Photo: Oleksandr Pidvalnyi/Pexels

Yes, it’s a thing. Real estate used to be for the big money investors, but not anymore. Real estate companies are making it possible for different individuals to invest irrespective of their financial status. Opportunities like real estate crowdfunding allow investors to buy into different properties and become shareholders. These are sure ways to start investing with little money, although you will need to run a background check on the company’s financial history before investing.

#8. Start an online business


Unlike a brick-and-mortar business, starting an online business isn’t capital-intensive. Online businesses like dropshipping, affiliate marketing, and e-Commerce are great investment ideas in this digital age. However, they can be competitive and time-consuming, especially if you’re running it alone and are yet to build a customer base. Nevertheless, it’s a highly lucrative business that you can easily do from the comfort of your home with little capital.

Featured image: David-Prado/iStock


Our content is intended to be used and must be used for information and education purposes only. It is very important to do your own analysis before making any investment based on your own personal circumstances. You should take independent financial advice from a professional in connection with, or independently research and verify, any information that you find on our Website and wish to rely upon, whether for the purpose of making an investment decision or otherwise.

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