Investing money can seem a little bit complex and daunting at first, especially if you’re new to the idea of actually saving in any way shape or form! However, plenty people up and down the country have made brilliant returns on shrewd investments without having too much risk to their bank balance.
Therefore, online investing has only gotten more and more popular. With the internet having opened things up on a colossal scale in various ways, no longer is investing money something that only people who already have lots of money can do. You can now invest any money you have with the right people in just a few minutes. Even if you only have a small lump sum or can only afford a small regular monthly payment.
If you are completely new to investing and are not ready to start looking at picking your own funds or shares then there area number of reputable services available these days that will take all the complications out by offering simple managed and ready made investment options. Meaning all you have to decide on is your risk level.
However, please remember if you currently have debt then investing on any level may not be right for you and you may want to consider paying down debt before looking to invest any money.
5 Ways to Start Investing with Small Amounts of Money
You don’t have to be earning lots of money to start investing. The beauty of making money from regular investments means you may often only need to put small amounts away here and there, whatever you are able to afford. Here are five great tips to get you started if money’s looking tight.
Look at Retirement Options at Work
All workplaces should have some form of retirement scheme laid out, which you’ll be able to pay into. The benefit of enrolling lies in the fact that you only have to sacrifice a small amount of your income each month.
All UK companies now have to offer a workplace pension pot of some kind. Therefore, you could split a small amount of your regular PAYE statement off to go into safe keeping. You could be shrewd about investing in this way be gradually increasing your contributions each year.
What’s more, your workplace is obliged to match any money you put into the pot. Therefore, if you’re investing £250 of your income per month, that’s already going to be doubled.
Retire From Home
Alternatively, if you run your own business or if you prefer not to enter into the workplace pension scheme, you could set up your own pension initiative at home.
Look at an IRA scheme. These will allow you to pay into a retirement lockbox that is tax-protected until you come to withdraw it at a later date. You won’t be getting the company cash matching, but you will have much more flexibility over where your money goes, and how it is used.
The more skills you have, the more money you could potentially be making. Have you got a few hours each week where you could be learning profitable skills? You could learn how to program, how to use illustration software, or how to speak a new language.
Think about your current skill set and your current field of expertise. How could you expand your remit with additional skills? Investing time is the best possible route to take if you simply don’t have the money available. The more skills you have, the more opportunities will become available. You could expand your business, or you could take on new jobs and roles on the side.
You could also completely change your career. If you have found a lucrative role or career pathway which you are particularly keen to try, it makes all the more sense to invest serious time in skilling up. Never stop learning, and never stop training, no matter what you do.
This is going to seem fairly obvious to anyone who may not have much money to invest, but think about approaching saving and investing from the perspective of a rainy day fund. You don’t have to save much to get started. Even if it’s as little as £5 or £10 here and there, money will mount up if you simply don’t draw on it.
It’s possible to save £10 a month and eventually look at making a million. You simply need to look carefully at your expenditure and work out where money will be better used investing and saving on a regular basis. If you are passionate about making money for the future, you should be more than willing to cut off a few unnecessary expenses in the here and now.
Building up small is easy. Take out a small ISA or savings account and strive to put in small amounts, to begin with. A new ISA will carry a powerful interest rate which you can use to start building compound interest on, year after year. If you have little money to invest, do still try to save, especially if there’s a chance for you to claim interest on top.
Pay Off Your Debts
This may seem counter-productive, but it makes sense to pay off debt sooner rather than later. Investing small amounts of money while you have debt to pay off isn’t a wise idea in the long run. While you still have debt to pay, you are going to be chasing your tail as far as your credit score is concerned.
Debt remaining on file is going to impact heavily on how much you will be entitled to borrow and invest in future. Therefore, it makes sense to start digging yourself out of a hole little by little. It can be done!
Best Investment Platforms for Beginners
If you’d like to make use of an investment platform but aren’t sure where to start, don’t worry. Here’s my pick of some of the best beginners’ services available for you to check out online right now.
Wealthify is a well-reviewed online investment system which leads with a simple website and a simple message. You can, as the site says, invest as much or as little as you want, either in a one off payment and or regular monthly payments from as little as £1.
The company has been around since 2016 and has firm backing from Aviva. This system allows you to choose your product and enter a few details including your level of risk tolerance. Your investment will then be managed by experts who will be able to minimise your risk of loss by spreading your money across a wide array of opportunities.
There’s no minimum investment here, but there is probably less control over your portfolio than you may like, depending on how involved you want to get. However, it’s nice and flexible, and there’s tons of support.
Moneyfarm is a pleasant, appealing little service which focuses on the importance of saving for the future. Their three-step program simply allows you to fill in your investor goals and they will match you up with the right portfolio. You’ll then be able to start funding your investments on the go. It really is as easy as that!
Moneyfarm is a great starter option for any would-be investor, and it’s certainly one of the most user-friendly. It’s had scores of great reviews from investors, too.
You get complete access to your investments 24/7, but is that enough? Some investors may want to take more absolute control over what they can and can’t invest in, in which case, Bestinvest, detailed below, is probably a better fit. You’ll also need to have £500 minimum to start with.
Bestinvest is an online system which largely focuses on ISAs, and is perfect for the self-starter. Boasting several multi-investment portfolio systems, the site lets you fine-tune how you want to invest your money, and how much intervention you’d like from managers. You can choose from a selection of investment scenarios with ease.
Bestinvest is a great option for any new investors looking for a wide range of options. It’s probably best marketed to ‘DIY investors’ who want to avoid stuffy plans and restrictions.
However, if you are completely new to investing, you may wish to look at a more user-friendly service first and foremost.
These are just a few of a number of great platforms available online for you to start investing through. There are plenty more out there, but do make sure to read up on what other investors have had to say and pick the platform most suited to your investment plans and experience level.
You shouldn’t ever be dissuaded from investing if you have little money to spare. We all have to start somewhere! Focus on clearing any debts you may have as much as you can, before thinking about saving, even if piecemeal and sporadically, for the months and years still to come.