People often think that in order to invest you have to be rich in the first place, or at least to have a disposable income that is large enough. If you don’t feel like banging your head over your next investment, it is highly recommended you read the reviews and, perhaps, engage in a more light-hearted form of investing, which could still result in massive profits.
It Is Possible to Invest a Small Amount of Money
Many would argue that it is pretty easy to be a successful investor when you already have a lot of money. Even with an amount as large as $10,000, there are more than few serious investment ideas, but what about if you have even less than that? Is it even possible to make a reasonable investment with a, some would say, ridiculously small amount of money.
Many value investors have given up on their strategy over the last 15 years amid concerns that value investing no longer worked. However, some made small adjustments to their strategy but remained value investors to the core. Now all of the value investors who held fast to their investment philosophy are being rewarded as value Read More
Yes it is possible to be successful investor, even if you start with a very small amount of money. It is not easy to make a profit, though, it takes a lot of patience, understanding, you’ll have to understand the market and make the right decisions at the right time. Some would say that you also need to have ‘Lady Luck’ on your side too.
Few Valuable Tips
Even though it is difficult, it is not impossible. In fact, there are quite a few people who became extremely wealthy even though they started with peanuts. There are few things that many people seem to forget when they’re investing.
- Always calculate your risk – Did you know that George Soros calculated that his losses would’ve been at worst 4% when he short sold $10 worth of Pounds Sterling in 1992?! That was the decision that made him $1 billion richer. It is possible to calculate your risks and you should never take a risk that’s simply not worth taking.
- Do your own research – If information on investment opportunities that would make you filthy rich were available in the papers, everybody would simple do as told and we’d all be rich. It doesn’t work like that, you have to do your own research and always remember that there are no guarantees. Sure, someone can give you a sound advice concerning the direction in which you should be moving, but nobody can tell you with a degree of certainty that buying this or that stock will make you rich.
- Think outside the box – We read this phrase everywhere and everybody tells us that we should do it. But it is easier said than done. If you could just copy other successful investors, than it would be too easy. You sometimes have to be bold and see potential and challenge where everybody else sees an obstacle.
There’s Always Investment Potential
Now, what can you invest in, if you have only a small amount of money at your disposal? There are more opportunities than you may think.
- Peer-to-peer lending – It is an alternative form of investment where you are investing directly into a company, usually a small enterprise, without having a bank, a broker or any third party to act as an intermediary. This type of lending usually goes through online platforms. Despite the fact that the platform charges a small fee, you’ll still manage to get a higher return rate, whereas the borrower will probably benefit from a loan with a lower interest rate compared to loans offered by banks and other financial institutions. Some platforms allow you to invest as little as $25. You can choose the enterprise you want to invest in yourself. Do your research and if you’re stuck and don’t know who to entrust with your money, the best thing to do is follow your gut feeling.
- Pay off your debt – This doesn’t sound like an investment, but it actually is. It is surprising how many people decide to invest when they haven’t even paid off their debts. Debts usually cost you a lot of money per year and if you return them, you’d be actually saving money. For example, if you have a $1,000 debt on your credit card and the annual interest rate is 14%, you’re losing $140 per year. If you repay it, you’ll actually be saving that much money.
- Your education – Even if you have finished college long ago or you feel you’re too old for traditional education, it is never too late. Whenever you have some extra time and a small amount of money you’re not sure where to invest, education is always a smart decision. There are many cheap online courses which can be very useful. Learn something, acquire a new skill. It may very well be a further source of income for you. Smart investors always expand their horizons and broaden their knowledge.
- The stock market – You can make a rather small initial investment. Look for companies that allow you to buy shares without a broker. It can be a great experience especially if you’re new to stock investments. You’ll learn how the market works without risking a large amount of money. If you managed to identify a stock share which is going to grow in the near future, your $300 might turn into $500 and soon into a $1,000. Even if you earn just a small amount of money, the experience is invaluable.
- Start a company – It takes a lot of time, effort and energy to build a successful company, but it won’t happen unless you take the initiative. You have a lot of ideas, but you keep convincing yourself that now is not the right time and that you should acquire a bit more capital, or new skills. It is never a bad time to start a company. And when you think you stand no chance, just remember that many hugely successful companies started during the recession. And you don’t always need a huge amount of money to start a company. Plus, if you believe that your idea has the right potential, there are available loans, or perhaps someone who already has the capital might be willing to invest in you and your ideas.
There are so many opportunities and with the right approach and attitude you can succeed. You’ll never succeed unless you try though, and that involves taking risks. If you take only smart risks and assess every investment potential thoroughly and carefully, you increase your chances significantly.