It is possible to start investing even when you’re on a low income. In fact, it’s more than possible – it’s a good idea.
If you slowly start investing you’ll learn what to do and, more importantly, what not to do, without risking a ton of money. I got started when I was making very little and have since gradually been increasing those amounts.
Here’s how to get started investing on a low income.
Start with $20 a Month
We all know that investing when you’re young is one of the best ways to build wealth overtime. This is thanks to compound interest.
Compound interest is the force that helps your interest earn interest. And while small amounts won’t earn you a ton of interest you’d be surprised at how that money can add up over time.
If you’re living on a tight budget start by investing $20 per month.
There are many places like Betterment or Loyal3 that allow you get started with only $10.
Increase By 10% Every Six Months
Ten percent might sound like a lot of money but if you’re starting out with a small sum it really isn’t.
If you start with your $20 per month investment, in six months raise that amount to $22. Six months later raise it $24.20 and so on.
Make sure you mark your calendar so you don’t forget.
Invest Bonuses and Tax Refunds
If you get work bonuses or tax refunds invest as much of that money as possible.
I understand that some of the money may be needed to pay bills or necessities. Save what you can and invest it. Even an extra $20 will be helpful!
Start a Side Hustle
Last, but not least, start a side hustle.
Having your own side business is one of the best things you can do in order to create financial stability. Your side income can be used to pay down debt, save, and invest.
Here are some side business ideas to get you started.
When it comes to investing the most important things is to just start! You can learn as you go and up your contributions as you see fit.