There is a misconception that you need a lot of money to invest. This simply is not true. Investing is an everyday thing done by everyday people with small amounts of cash. How do they do it? Read on to learn about three small investments that make money.
- Robo-Advisor Investing
Investing has never been more accessible since the Robo-Advisor came on the scene. The masses can now easily invest a small amount of money and watch it grow. You don’t need to spend hours learning about where to invest because the Robo-Advisor takes the guesswork and leg work out of investing.
The Robo-Advisor will start by asking you a few questions to determine your risk tolerance and then take your small investment and stretch it out among a large body of stocks and bonds. Algorithms are then used to optimize your portfolio for both tax purposes and continued growth while offering you automated investment plans.
It’s easy to get started with a small investment of $500 or less. Many also charge a small fee based on the size of your account. or the amount of your balance. The average is about 0.25%. Note: These fees are in addition to any ETF fees. An example of a Robo-Advisor is Betterment.
- The Stock Market
Didn’t think this one would be on this list, did you? Another misconception about investing is that you just don’t have enough money to invest in the stock market. Again, not true. You can invest with very little upfront money thanks to the Internet and the ease with which you can do so. You can start out by buying as little as ten or twenty shares to get a feel for investing. Basically, you’re putting very little money at risk and watching it grow.
- Open an IRA
You can never have too much money for retirement. Although you may have a 401-K already, consider opening an IRA as well. You can contribute up to $6,000 a year and enjoy the tax benefits. You make payments to your IRA using pre-taxed income so you don’t have to pay taxes on that income. Sweet deal.
As you can see, there are some small investments that make money that you can start doing today. With as little as $100 you can start investing in the stock market. With a more sizeable amount, open an IRA or take advantage of a Robo-Advisor.