Don’t be one of those people who thinks they need to have lots of money to make lots of money!
Obviously, the more dough you have, the more you will be able to save but the main thing that will turn your finances around is developing the habit to save. It’s a mental thing. And for that you need hardly a dime to your name – especially today.
It has always been the case that saving small amounts regularly and in the right places will add up to financial wellbeing.
However, it has never been easier or cheaper to get started.
Here are 12 suggestions to send your finances north!
Buy and sell individual stocks – from $0
Stocks and shares may not be the best place to start if you are a novice investor but it is now possible to set up a trading account with no buying fees and no minimum balance requirement.
Robinhood is one of the most widely talked about commission-free trading platforms and to get started you simply need to be a US citizen with an SSN.
There are plenty of options for getting started from $10 and upwards including businesses dealing in fractional shares which enable investing into high value company stocks.
For example, a company dealing in fractional shares of up to a hundredth would open up a $1000 valued share to traders with only ten cents to their name (subject to minimum balance restrictions, if any).
Help your employer to help you
If you are in work and you haven’t yet invested into a 401k or similar retirement fund, you should look into your options.
Depending on your finances you can usually choose to invest from 1 per cent of your salary upwards into a variety of funds.
If your firm offers matched contributions then your employer will donate an equivalent sum to the pot.
Some people start off at the lower end of the scale and increase their contributions as their finances improve.
There are plenty of private retirement funds on the market too and they are usually tax-free until you withdraw the money (although some remain tax-free after you reach a certain age).
The cookie jar method
As we mentioned in the intro, creating a saving habit is more important than having stacks of capital to invest.
Literally put aside a cookie jar (or shoe box, coffee pot, etc.) and commit to adding $10 a week to it (you can split that down to a couple dollars a day if you prefer).
Over a month, you will have $40 in that jar and over a year $480. Of course, you will want to grow that money through investments so you will need to transfer the money into your chosen investment option at regular intervals.
A standard bank savings account is unlikely to yield much in the way of returns and may be inconvenient to manage.
However, high-tech savings options have arrived on the market include automated online saving accounts such as digit.co or micro-investing apps like Acorns.
Acorns works by rounding up your card purchases and investing the change in the stock market.
Low-entry investment accounts
If you don’t have the time or courage to invest in stocks yourself, there are now a number of automated and manually managed investment accounts which require minimal money to start with and charge low fees.
Betterment is one such option. After you’ve answering a few questions about your goals, a robo-advisor will build an appropriate portfolio on your behalf.
Fees are 0.25 per cent and you won’t get charged for a zero balance.
Mutual (and Mini Mutual) funds
Even mutual funds are now accessible to investors with limited capital. For a lump sum of $100 (or a commitment of $50 per month), you can now enjoy access to professionally managed funds investing in a wide range of assets (stocks, bonds, money market instruments, etc.)
The main benefit of a mutual fund, when compared with investing in individual shares, is that it includes a diverse portfolio, helping to even out risks.
Selling structured settlements
If you have been awarded a structured settlement in the past, it may be possible to access your structured settlement cash early and to use this to increase your investment potential.
There are many firms willing to buy structured settlements. However, the trade will need to be approved by a court as you will need to demonstrate you will not be adversely affected by giving up your future payments for a lump sum.
Trade in ETFs
Exchange traded funds (ETF) offer the diversity of a mutual fund with the convenience and returns potential of investing in stocks and shares.
Although you can buy ETFs without a minimum investment, brokerage fees can make them a costly option for those on a budget unless they have a lump sum to invest.
If you have $100 to invest and a low appetite for risk, government bonds may be up your street. These include savings bonds, treasury bonds and TIPS (treasury bonds which are protected against inflation).
As these are backed by the government, they are considered very low risk although bonds from countries with poor credit ratings are riskier.
Bonds offer relatively low returns compared to riskier investments such as stocks and shares.
Invest in yourself
Rather than think about how you can make your money work for itself, consider increasing your own potential by enrolling on a worthwhile course.
From trade schemes in plumbing and meter installation to language and business courses, there are plenty of options to boost your skills base and open up the jobs market. Spending money on training should be treated as seriously as any other investment.
Make sure that the jobs you are training for are actually available and that the expected salary is worth the course fees.
Ever fancied yourself as a banker?
The peer-to-peer lending market, which include companies such as the Lending Club and Prosper, matches investors to borrowers with various risk profiles. Investors can choose whether to opt to fund lower risk loans for less return or increase their exposure for the potential of higher returns.
Prosper provides investments in blocks of $25 and offers an auto-invest service with optional cash reserve. No minimum balance is necessary.
Clearing your debts
If you are carrying any debt, you will need to weigh up the logic of paying these down before you start investing. For high interest debts, such as those racked up on most credit cards, it is generally a no-brainer.
There is no point putting your hard-earned cash into an investment paying 3 per cent interest if you are racking up four times that in credit card debt.
Investing in crypto currencies
This is the wild card of these investment tips.
It is easy to set up an online wallet and immediately start trading in cryptocurrencies such as Bitcoin, Ethereum, Litecoin and Ripple.
However, the market for these new forms of currency has proved to be very volatile and the verdict is still very much out on their overall value as an investment.
Hopefully this has given you some ideas about how you can make your money go forth and multiply. Remember, the most important thing is getting into the saving habit in the first place.