Developing good financial habits at an early age will serve you well for the rest of your life. Investing wisely is a skill that everyone should learn. Even if you do not have hundreds or thousands of dollars in your savings account, there are ways that you can still invest.
Company Sponsored Retirement Plans
If you work for a company that offers a 401K or other employer sponsored retirement plan, you can have money automatically taken out of your paycheck and invested in the plan. You choose the amount you want to invest each month, subject to the maximum allowable amount. Even small amounts can add up over time and many companies will also help you out by matching a portion of your contribution.
Mutual Funds
If you are able to scrape up enough money to open an account, a mutual fund allows you to diversify your money among different stocks and periodically add to your holdings. You can buy fractional shares and invest any amount you choose. If you look hard enough, you can find funds that only require a $500, or even $250 minimum initial investment, to open an account like www.swellinvesting.com. You may finance your day-to-day living expenses with quick cash loans and invest every bit of your buck – that were previously a part of your daily expenses – in mutual funds investment plans!
Direct Stock Purchase Plan
Over a thousand major corporations including such Blue Chip names like Kellogg, Microsoft, General Electric and Pfizer, allow you to purchase shares of their stock without having to go through a stock broker. You purchase shares through the company’s transfer agent. Transactions are commission free, and you can purchase fractional shares. For instance, if you had $50 to invest and the stock was selling for $40 per share, you could buy 1.25 shares of stock.
Buying Gold or Silver
Investing in precious metals over the last 10 years has been very profitable for both gold and silver buyers. They have produced positive returns in every one of those 10 years and the trend is higher for the foreseeable future. As someone with a limited amount of money, rather than a gold investment, silver is probably the better way to take advantage of the rising price trend. You can buy one ounce silver coins for under $50 and they are also available in fraction of an ounce form.
Safety in Savings Accounts
Most financial experts will tell you that before you start buying stocks and other more risky investments, you should build up a savings account. While you will not earn much more than a low single digit percent interest, just putting away some money each month will allow you to accumulate enough money so you can make future investments with a better return.
I think for the investment amateur the best route to investing is probably through a global equity index fund. This diversifies your capital across multiple sectors, companies and countries minimising your risk but also exposing your capital to more emerging markets for higher returns. For the amateur I’d suggest avoiding investing in individual companies
I agree with you Green, anyone can build a well diversified portfolio using one or two ETFs these days.