Investing money can mean lots of things. It can mean putting your funds in a savings account at the bank, retirement accounts, stocks and bonds, mutual funds, or playing the stock market. Some people do all three, and may also dabble in cryptocurrency assets too.
And there’s an explosion of apps on the market, making it easy for beginners to invest in real estate, cryptocurrencies, or stock funds.
Tip: Earn cash rewards from Swagbucks for signing up for investment and fintech apps like Coinbase, Robinhood, and Varo.
This post will discuss ways that beginners can start investing. Even with modest savings and low risk tolerance, it’s possible to develop an investment strategy.
How can I grow my money fast?
Before you can start to reach financial goals you have to set them. Before you can do that, you have to sit down and comb over your personal finance records so that you know:
- How much money is coming in per week or month.
- How much money you are spending every month and where that money goes.
- How are you saving the money that is not spent each month?
From there you will have to make plans to start saving money, building a retirement plan, and improving your cash flow. Before you can do any of this though, you have to get rid of as many debts as possible. If you can, set up an appointment with a financial advisor to discuss your short and long-term goals.
How can a beginner invest money?
If you don’t know a mutual fund from a 401K and you think that CDs are just a way to listen to music, you need to start investing money with extreme caution and perhaps a bit of research. The stock market is notoriously fickle and may not be the best place to try to learn about a complex concept like investment strategies.
Most people do have their personal preferences when it comes to how they will invest their money. Most investors of a certain age will steer clear of newer concepts like cryptocurrency while newer investors may be more open to it.
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Other ways to invest for beginners can include:
- High yield savings accounts.
- Certificates of deposit (CDs)
- Mutual funds
Remember that any investment advice given to you from an article such as this is just general advice and should not be considered the best way to invest for every situation. If you can speak to a certified financial planner, always do so. One of the best ways to earn your financial freedom is by education and guidance from real professionals.
How can I double my money?
There is an old joke where someone asks how to double their money and the other person will take a dollar bill and fold it in half for them. Old jokes are not going to build a nest egg or retirement savings, so it’s important to find realistic ways to get your account growing.
If your employer offers a 401K with matching funds, that is the easiest way to double your money with minimal risk. Every company has different rules regarding its funds, so get all of the information upfront and make sure you understand it all before committing.
If you do feel like investing in the stock market is right for you, open an account, make your initial deposit and then let your money work for you. You can use an online broker or you can go with a do-it-yourself account with Robinhood and related companies.
How can I invest $100?
If you do not have any type of savings at all, your best advice is to use $100 to start an account for future emergencies. An emergency fund should have at a minimum, three months of living expenses in case of illness, job loss, or other sudden changes. The more money that you have in this fund, the less a minor or major incident will hurt you overall.
That money can also be added to your 401K in most cases. Most will allow you to add additional funds to your savings on a one-time basis.
There are other investment options for $100 including savings bonds, individual stocks, and exchange-traded funds (ETFs). You can always put that money into a savings account and let it grow interest.
What is the safest investment with the highest return?
The answer is complex because even the financial experts are at odds with which investment risk is the lowest. Two of the safest are gold and government savings bonds. The latter can have some tax benefits but may take a long time to mature. The former can be difficult to purchase for beginners and may be an expensive investment.
Note: if you do choose to buy bonds, do so directly from the US Treasury rather than through a broker. Online brokers add fees and charges that are not necessary.
How can I invest money with no money?
You just maxed out your credit card to keep the lights on for another month, but everyone is still telling you that you should invest for your future. If you are living hand to mouth, paycheck to paycheck it may be impossible to see beyond the end of the month when you have yet again run out of funds before days until the next payday.
So what do you do?
If you can come up with even small amounts of money you can start investing in something called “DRIPS”. It stands for Dividend Reinvestment Plans and it is an interesting way to invest your money into well-established companies that are considered to be lower-risk investment vehicles.
Here is how it works. You buy a small amount of a company’s stock. At the end of each financial quarter, the stockholders will get a dividend check which is a percentage of the company’s profits. Even people with only a few stocks may get this benefit. Under the DRIP plan, you use the dividend to reinvest into buying more stock shares. Eventually, you can move to a more diversified portfolio, buying stocks with different companies.
Again, you can also just put anything extra into your 401k especially if your employer matches all contributions to that account. The more you add yourself, the more you earn from your employer.
What happens if I invest $1 in stocks?
If you listen to a knowledgeable investment advisor a $1 investment in the right stocks could lead to a large windfall over time. There are constant stories about people who take their last few dollars, invest them in the stock market and end up walking away from a very wealthy person.
On the flip side, investing money in individual stocks can be a real crapshoot and you may end up just losing that money and then some. Never invest money that you are not prepared to lose.
What are the best investment apps?
The best investment apps will allow you to start an account with a minimum balance, will not have enormous fees, and may also help you learn about mutual funds, the stock market, and index funds while you grow your investment. Here are some apps to consider:
- Coinbase. Learn about investing and cryptocurrency and earn with each short lesson.
- Sofi Invest. Start with just $5. Explore the information center to get information on all of the various investment opportunities before you take the risk.
- Ally Invest. Offers up to $3000 in bonus cash.
Investing money at any level can be scary. There are few investments that do not come with at least some risks, and that is important to remember. Always explore all aspects of an investment before committing and never try to invest beyond your current means.
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