A lot of blogs provide information on how to invest your money. Problem is, most of these suggestions are more tailored to individuals who have tens of thousands of dollars to spend. However, just because you may be on a shoe-string budget, it doesn’t mean that you don’t have any investment options available. In fact, this article outlines seven ways you can invest while on a budget.
1. Invest in Your Debts
You can literally save yourself thousands of dollars by taking care of your debts right now. Before partaking in any investment opportunity, it would be wise to get debts paid off. In fact, the interest rate you will pay for several years may take away any profit you have made through any investment strategy. Some high-interest credit cards have a high rate of 20%. Student loans, on the other hand, can have an interest rate as high as 10%. Therefore, if you have a lot of high-interest debt, it makes sense that you clear those up before you invest.
2. Automatic Savings Plan
It may sound cliché, but every penny does count, and if committed enough, those pennies and dollars can turn to hundreds and even thousands as the years go by. One of the things you can invest in is an automatic savings plan. Many banking intuitions such as Bank of America provide you with this option. Usually what occurs is that every time you make a purchase, the bank will deposit a predetermined amount in your account daily. For example, one could customize their account to save just $1 for every transaction they make. Now, when you look at how many transactions you make per month, you could literally save hundreds if not thousands of dollars, just by using an automatic savings plan.
Robo-advisors are programs that have been developed to make the concept of investing in top penny stocks as easy as possible. They provide automated finance and investment platforms that run off a sophisticated algorithm. What makes this option unique is that it doesn’t require human intervention. The Robo-advisor would essentially provide advice after collecting your financial information and goals, as to which it would invest your capital automatically. In the background, this automatic finance planning algorithm tracks and analyzes your investments.
Another thing you can do is to invest in your company’s 401(k)plan, particularly if they provide a match of your investment. However, it is worth noting that if your 401(k)isn’t better than the S&P 500 rate of return, you should probably invest elsewhere.
5. P2P Lending Account
By opening a P2P lending account, you will have the ability to give small loans to people who need them. Depending on the overall total that you are willing to lend, you could get back 10% interest on it. Better yet, most companies do not require a large investment and you can get started for as little as $10.
6. Micro Investment App
If you have at least $5 to spare, you should download a micro-investing app right now. Apps such as Stash Invest provide you with a full investment portfolio. This portfolio consists of a mixture of exchange-traded funds and individual stocks. Interestingly enough, the app is very user friendly and provides you with a wealth of investment-related advice such as time horizon, investment goals, recommendations, and risk tolerance to name a few. Many of these apps provide a debit card which you use to make regular purchases. However, they feature a roundup setting which basically means if you purchase something for $8.24, it will send $.76 cents to your investment account. As such, not only do you get investment recommendations, they provide a savings feature to help you accumulate even more money.
7. Cryptocurrency Trading
The price of one single bitcoin was $80 back in 2013. In 2020, the price has risen to $8000. What this means is that if you had purchased $800 in bitcoins back then, it would be word $80,000 now. While it may be too late to receive such a high return on investment, it goes to show you that cryptocurrencies have the potential to provide some solid return on investment. However, it is worth noting that this market is highly unstable and prices drastically fluctuate.
Article Submitted By Community Writer