Friday, May 17, 2013

Investing Small Money 101

You don't have to have tons of cash to invest wisely. You can use "small money" to become wealthy. There are a few tricks. Make sure to consult with your financial adviser before making any rash decisions with money. However, I am listing my tricks of the "small money" trade below.

Start with paying yourself. We all pay bills and have financial obligations. But, we often forget to pay ourselves. Take 17% of your net pay or profit and put it aside for yourself. Don't touch this money. It can help you gain a line of credit or act as collateral later down the line.

Look into buying stocks using Dividend Reinvestment Plans ("DRIPs") or Direct Stock Purchase Plans ("DSPs"). These plans are easy to use and only require $50 dollars to start. You also want to seek out mutual funds with a low minimal purchase. Some mutual fund companies will allow investors to start investing with small deposits, but you'll have to agree to an automatic investment plan whereby you let them deduct a fixed amount from your bank account every month for the purpose of buying additional stock.

If you can afford to set aside a thousand dollars (or more) consider a CD. This stands for Certificate of Deposit. The concept is to loan your money to a bank. The bank has a certain amount of time to pay you back with a higher interest rate. It is like a savings account but you can't withdraw the money during an emergency. The plus side is the interest on a CD is larger than that of a savings account.

You can use "small money" to grow major wealth for yourself.

Until next time,
Twyla

No comments:

Post a Comment

Twitter Updates