By now, everyone knows the power of investing. Some of the richest people in the world have generated wealth through investments. It is a well-known fact that you can make a lot of money by investing in different assets. The big problem for the majority of the population is that the wealthy are able to invest lots of money into things. Therefore, their gains are substantially bigger than what most of us would see from the same investment.
It makes you wonder if it’s worth investing in things if you can’t invest that much money. Let’s say you have under $1000 to invest – is there much point in putting this money into investments, or is it too small a sum to see significant returns?
The quick answer to this question is that it is worth investing, even if you have a small sum of money. It’s not so much a question of whether or not this is a good idea, it’s more to do with how you should invest when you can’t pump lots of money into things.
Invest little and often
A common misconception with investing is that you need to put a lump sum into an investment right away. You can do this, but an alternative is to drip feed your money into an investment. Instead of investing $5,000 all in one go, you slowly make smaller investments month after month. You might put $100 a month into an investment, but it slowly adds up. It’s almost like you’re treating the investment like a savings account, only benefiting from the more generous returns you get from investments like stocks, gold, crypto, etc.
Look for investment funds
Investment funds are set up to allow lots of people to pool their money together and invest in the same things. There are plenty out there, and as these DiversyFund reviews show, they can be very safe and reliable in the right hands. The idea is that, instead of investing hundreds of thousands, you invest whatever you can. This can be as little as $500, but you still contribute to the fund.
The fund itself can be worth hundreds of thousands, but it’s made up of other investors’ money as well. It lets you make the big returns associated with large investments, only without needing to put lots of money in. Earnings from the fund are distributed based on what you invested, but it’s a great way to get on the investment ladder with hardly any money or knowledge.
Enroll in a retirement plan
If you’re employed, your employer should have some sort of retirement plan for you to enroll in. This is one of the best ways to get started in the world of investing, and you don’t need to use much money at all. The idea is that your employer will take a small percentage of your salary – this can literally be 1% – adding it to the retirement fund each month. They will also make a contribution, which could be a percentage of what you’ve put in, or they might match it. Month after month, year after year, you slowly generate more wealth from the investment.
See, there are ways to invest your money, even when you don’t have much to play with. You just have to realize that your gains will take longer to come through, so you need to be patient. People with lots of money can see big gains in a short time, but that’s because they can afford to throw around loads of cash with ease.