You know that investing in the financial markets or starting your own business is the way that other people make themselves wealthy. But you can’t afford to buy a rental house or buy up a thousand shares of some trendy stock. You’ve got a job, a family, and a mortgage to worry about. How could you possibly risk a large amount of money trying to get in on the action?
The truth is that you don’t. There a lots of small investment ideas for the faint of heart who want to stick their toe in the water before they jump in to the deep end. When you start out with less money, you have less risk in your prospective venture. And once you experience some success, you could likely scale your success on a much broader scope to expand your chances for earning passive income.
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Small Investment Ideas That Don’t Take Much Cash to Start:
Even if you only have a small amount of money to start out with, you can still make money with less than $1,000. Though your returns may not be as outrageous as those with bigger initial investments, there are other benefits.
For example, you will gain some knowledge of how to use these strategies which can help you for when you do decide to go big time! Here are my tips for getting started.
Stocks are always available whenever you want them. And depending on which ones you want, you can find them for pretty cheap (as in less than $10 each).
The media would have you think that you need to be some kind of big-time high roller to buy stocks. But the truth is that you have the option to buy them individually if you want and for little or no fees.
For example, Public lets you buy “slices” of just about any stock you want for just $5 each. Or, you can buy whole stock shares or pieces of mutual funds as well.
And Public is commission free.
And you can buy just a couple of shares of an expensive stock and make money too. For example, I once did some research and found Apple to be a good potential buy.
Unfortunately I was kind of low on funds. But that didn’t stop me. I took the $1,000 I had and bought 3 shares. That’s right – just 3 shares. Good thing too – it doubled in just under a year later!
If you’re willing to do some research into the financials of a company, there are lots of options for dividend stocks or growth prospect stocks that are under $10 each.
Just be sure you do your research first so you can minimize your risk. Starting with the Dogs of the Dow might be a good idea.
2. Mutual Funds
Investing in mutual funds can be an affordable way to invest as well. Mutual funds buy you shares in sort of a “basket” of various companies’ stock holdings. As you may already know, mutual funds make great investments because of their tendency to grow using the principles of compounding interest.
Though most of them require $3,000 or more to get started in, there is at least one that I know of that takes a small $1,000 investment to get started in: The Vanguard STAR Fund (VGSTX).
And Wealthfront will help you open an account to invest in mutual funds with a minimum of just $500.
If you’d like to combine the passiveness of mutual funds but the fluctuation of stocks, then perhaps something called an exchange trade fund (ETF) is a good investment idea for you to try.
An ETF is basically the same idea as a mutual fund. However unlike a mutual fund where the share price changes each day, it’s value fluctuates every minute just like a regular stock.
The other good news: Similar to a stock, you can buy shares individually with small investment sums. So if your budget is only $100, $500, or $1,000, you too can own them.
One company that helps people buy ETF shares for cheap is Betterment. There’s no minimum amount needed to start investing with Betterment.
And their fees are just 0.25% per year.
4. Real Estate Investing
Real estate investing IS possible–even with less than a thousands dollars. There are companies out there that are doing crowdfunding real estate investment projects.
Crowdfunding is where a lot of people each contribute different amounts of money to fund a project. In the case of crowdfunded real estate investing, hundreds of people contribute to the purchase of a real estate rental property.
They share in the purchase and then share in the profits. Depending on the company, you can buy pieces of residential real estate projects or commercial real estate projects.
For example, Fundrise helps people invest in real estate for a minimum of $500. For that amount, you can invest in a diversified portfolio of real estate rental properties.
You earn a return on the profits the company makes from the real estate rentals.
5. Crowdfunded Lending
6. Internet Business:
Do you think it costs much money to start a website such as this one? Not even close! As long as you’re willing to learn a little bit about the tech side of things and don’t mind writing your own content, you can keep your costs really low. Try less than $100. From personal experience, I can tell you that building a blog or niche website is one of the cheapest and enjoyable small investment ideas I can think of. And even if the site doesn’t make as much money as you thought it would or turns out to be more work than fun, you can always try to sell it on an auction site like Flippa.
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