Does the thought of investing scare you because you need a lot of money to get started?
That’s one of the biggest reasons people are missing out on the best way to build wealth over the course of their lives. It’s hard to just take that first step when you’re also concerned about feeding yourself or your family, covering your rent or mortgage, and affording every other necessity in life.
But you don’t need a lot of money to start investing. For example, $10 a week can turn into $75,000 if you give it some time. Here are a few ways to make that happen for you.
WealthSimple. WealthSimple arrived in the United States after its success in Canada, and its strength is its cost. When you’re starting out with investing, you don’t want fees digging into into your profits.
There’s no charge to transfer money from a bank account into your WealthSimple account. I started out with a $10 weekly investment, but you could start with $5 a month if you want, or if that’s all you can afford right now.
And there’s a special deal right now. If you open an account, you will receive a $50 bonus. Open an account today and get that $50.
When you sign up, you fill out a short questionnaire to determine how your money should be invested with a mix of exchange-traded funds — one of the most frugal ways to invest in stocks and bonds. You can accept their suggestions — and if you’re new to investing, that’s what we would suggest you do — or change them to suit your tastes if you have a little more experience with investing.
If your account stays under $5,000, you will not be charged any fee for the first year. Above or after that, the management fee is a small 0.5% — though, if you find yourself with more than $100,000 invested, they’ll reduce your fee to 0.4%. This is a great deal when it comes to investing, especially if you’re starting out with just a little bit of cash to invest.
LendingClub. If you’re open to a different kind of approach to investing, take a look at LendingClub. Rather than investing in stocks and bonds, you’re investing in loans. The returns are similar to stocks, and the risk is managed. The only drawback is that your investment is a little less liquid. That means if you need the money you’ve invested in an emergency situation, it might be hard to withdraw immediately. (That’s why it’s always best to have an emergency fund.)
LendingClub helps you pick out the best investments and gives you a good idea of what you can expect to return. You can use your investment to create an income stream. There’s a higher minimum investment of $1,000, but you can save up in a savings account until you are ready to start. After that, you can increase your investment with only $25.
Ally Invest. Ally Invest is a discount brokerage with truly low prices. Yes, the $4.95 fee per trade will cut into your profits if you invest small amounts in stocks or ETFs. If you want to invest frequently, WealhSimple mentioned above might be a better option, though your investment selection is limited. On the other hand, Ally Invest really lets you take control of your investments. There’s less guidance, but more flexibility.
Ally Invest used to be known as TradeKing, which made its name as one of the most popular discount online brokerages.
There are three great options above for getting started with your investment portfolio. This is something every adult should have, and every adult should invest for their future, regardless of how difficult it might feel to let go of even $1 of cash today. Your future-you will thank your today-you if you just take one simple step forward today, even if it’s not a huge step. Thankfully, these resources are here to help you out.