5 methods of starting an investment with minimal capital

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Even with limited capital, you can make an investment that will give you big returns. The most important aspect to a rewarding investment is developing good investment habits.

1. The cookie jar strategy

This strategy requires you to put away some money away from your regular use money. It can be in a shoe box, a safe or a piggy bank. This may seem like a trivial affair but the little money put aside each month is so much at the end of one year. You can also save through online savings account which again is separate from your regular checking account.

In each of the method of saving, start with less amount and increase the amount as you go along so that you can reach your investment target sooner.

2. Sing up for retirement plan with your employer

Talk to your employer to find out if there is an employer contributory retirement plan which you can sign up for.

Usually, the amount deducted from your salary is so minimal you may not even notice it. You can start with 1% contribution of your salary and once you have adjusted your personal budget, you can increase the percentage of contribution.

3. Consider investing through betterment

Betterment is a cheap and user friendly investment platform which is automated. A short questionnaire on the platform helps betterment decide which investment options are best for you. Once you sign up with betterment, they provide you with a portfolio with various investment options including capital markets. They do all the ground work for you and charge a minimal fee for services provided.

4. Invest in mutual funds that are low-initial-investment

This option is ideal for investment beginners since it provides them with ability to invest in a range of stocks and bonds with only one transaction. The down side is the amount of money required by most mutual fund firms and the limits are in some cases too much for a beginner (£ 500-5,000). However, there are some firms that will waive this minimum account balance if the investor commits to an agreed monthly instalment.

A very popular feature with mutual funds is the automatic investment whereby you can request the HR department and the accounts office to set up an automatic deposit into your mutual fund account such that the amount to be deposited is deducted from your salary.

5. Invest in Treasury securities

It is possible to invest in the US Treasury securities, also known as savings bond, even as a beginner. The benefits of this investment may not make you an overnight millionaire, but this is a good place to save your money and earn some decent income in form of interest. It is easy to buy the Treasury securities through the US Treasury’s bond portal Treasury Direct.

In conclusion, the aspect of investment only requires you to start somewhere. With the online and app based platforms available, investment has never been this convenient.

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About Editorial Team 58 Articles
Watch My Wallet has everything you need to know about money, written by real people who’ve been there. Inspired by the philosophy of Early Retirement Extreme (ERE), our goal is to make informed decisions about our finances in order to achieve financial independence.

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