Investing on a Budget

invest, moneyThere is a common misconception that investing is only for people who have plenty of extra money lying around.  But unlike many large purchases, investing requires no hefty down payment and it will have huge benefits for you in the future.

Pay yourself first.  We have all heard it but how often do you actually live by this rule?  It doesn’t have to be painful to save money.  Instead of using holiday bonuses and tax refunds for splurging, use them to save for the future.  There are also programs offered through many banks such as rounding your purchases to the nearest dollar and saving the change, or similar processes that will help you save without noticing a significant difference in your day-to-day life.

There are many investing options.  No money to hire an investment advisor?  No problem.  There are many options out there that allow you to invest without the help of an advisor.  One option is Exchange Traded Funds (ETFs).  ETFs are similar to index mutual funds but are traded more like a stock.  These funds attempt to imitate the performance of the S&P 500.  Another option is Automatic Investing Plans with online brokerages.  Sites such as Sharebuilder.com offer low cost brokers, one-time stock trades, money market accounts, and no minimum investment amount.

Check out low minimum fund companies. While many fund companies have substantial minimums, there are a few quality companies that have no minimums or very low minimums.  One company offering low minimum funds is Charles Schwab which has a $100 minimum on no-load funds.  Look around for companies like this and you’ll be investing in no time.

Once you’ve invested your money, make regular contributions.  Even if your contributions are small, making them regularly will give you the best chance at reaching your financial goals.

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