The answer to the question “which is can you invest if you don’t have much money?” is of course yes. However there are two main challenges to it. But you are lucky because these two challenges can be easily conquered.
Before we go to talk about these two challenges I need to mention that there are online investing sites where you can begin to invest with only $200 or less. I personally began invest with only $200 on my brokerage account.
A lots of people think that you have to be a millionaire or billionaire to invest. But this is far from the truth, everyone can invest. I began investing the day I turned 18 years of age, and at that time I didn’t have a job and I just invest the $200 I got as a birthday gift from my sister on that day. This is a example of that you can invest if you have only couple of bucks to do so.
One of these two challenges which was mentioned above is that many investments require a minimum amount of money. As it was said above some brokerage accounts requires a minimum amount of money to get started, and of course different stocks, bonds and funds costs different amounts which is another thing you need to worry about.
There are brokerage websites like eToro were you can start with only $200, which I began with and it worked fine for me. But I’m sure that there are hundreds and hundreds of brokerage accounts where you can start with less than $200.
For $200 or less you will also not be able to buy stocks as Tesla Motors, Amazon or Apple. But there are a lots of penny stocks and other cheap stocks which will probably do good in the future. Which means that you will have a huge return if you invest today or tomorrow.
The second challenge is that it’s hard to diversify small amounts of money. This means that with small amount of money it will be hard to buy stocks, bonds and funds in different fields of the investing market.
Every smart investor should diversify their portfolio as much as they can, and with small amount of money to begin with it will be hard to do that. But as a beginner investor don’t worry about that as long as you will be able to choose a field which will not drop down in the near future. By investing regularly you will eventually you will eventually get more and more bigger and more diversified portfolio than you had at the beginning.
You as a beginner investor should always remember that investing is a long-term game. So you should never invest money you might need in the near future, this of course includes the cash cushion for emergencies and other unexpected events which might pop out in the near future.
A good advice for the beginners will be to save at least 20% of their monthly income, and spend half of that these 20% savings onto investing in whatever you would like between stocks, bonds and funds.
You can find my investing portfolio here