This week's article is written by Andrew from Slick Bucks. You might only think you can invest when you only have large sums of money. That's far from the truth!
Realistically, you can (& should) invest every month with small capital. Consistency is the secret to being a successful, long-term investor. Here's Andrew:
Investing is the cornerstone of growing one's net worth so that a comfortable retirement is a real possibility. It is great to work hard for money and save it up, but it is even better to have that money working for you to earn even more money.
While many can see this as something that they must do, it is also true that many do not know how to get started. They may even worry that they cannot truly get started with the small amount of money that they have set aside for this.
In reality though, it is possible to start investing even with a small amount these days.
Online brokers are eager to snap up as many clients as they can. There is a fierce competition for every single account, and they are happy to work with even someone who just has a small amount of money to get started.
Given this, it is up to the investor to look for the right online broker to get the job done. There are plenty of them out there, so you will need to decide which one provides the best service.
#1: Choose a Broker With a Low Account Minumum
The best way to start screening them is to look for the ones that offer a low account minimum to get started. This is the best thing to do because you will find that you cannot meet the minimum requirements for some of the brokers. However, most of them will keep it pretty low so that the barriers to entry are not that bad.
Once you have selected a broker that has low enough minimum requirements, then it is time to look at what kind of tools of the trade that broker has to offer so to speak.
This means taking a look at the platform that is offered as well as the variety of other tools which may be used to help you make the trades that you need to make.
#2: Learn Investing Lessons With a Small Amount of Money To Avoid Costly Mistakes Later
When getting started with a low bankroll keep in mind that you are not likely to make very much money. At the same time, you are not likely to lose that much either. You are more or less just learning the ropes of the market and hopefully learning how to avoid some of the mistakes that you may make when you are still new to it.
Everyone makes a few errors here or there, so it is not that big of a deal. The problem comes only if you continue to allow those mistakes to consume you with a bigger account.
#3: Make Routine Trades As Capital Become Available
Most with small accounts are planning to add more to them as time goes on. That is a very reasonable thing to do. You can continue to add money over time and thus increase your positions in the various stocks that you may want to own.
#4: Avoid High Trading Fees
When starting with a small amount of money for investing consider which brokers offer the lowest trading fees as well.
While trading fees should matter to everyone, they are particularly important to those with small accounts. It is easy to have trading fees eat up a good portion of one's funds that were meant for investing if one is not careful about managing this. The lower the fees, the more money can be put towards actually investing in stocks.
#5: Automate Investing
There are some brokers which make it possible to invest in the markets automatically. It is possible to set this up to work automatically. Doing so means that you can essentially set up your investing on auto-pilot so that you do not have to keep so close of an eye on it. You can set it and forget it and then just let your money stack up as you stop even noticing it coming out of your paycheck each cycle.
To get started today just review which broker you would like to do business with and get started. You may just be surprised by how easy it is to get started and how you really do not need as much money to start as well.
Related Articles: How to Start Investing for Beginners
Josh founded Money Buffalo in 2015 to help people get out of debt and make smart financial decisions. He is currently a full-time personal finance writer with work featured in Forbes Advisor, Fox Business, and Credible.