How to Become an Investor Even If You Have Little Money

how to become an investor

There’s never been a better time to get into the stock market. Far too many people stop themselves from creating wealth in the market due to the belief that they don’t have the knowledge or experience required. However, it’s easy to learn how to become an investor even if the money you have to invest with is very little.

That’s right, you don’t need to be the son of a banker or the Wolf of Wall Street in order to make a steady income from your investments.

How can you get started even when your available finances are slim? Read on and we’ll walk you through what you need to know.

Investing With Little Money

There’s a false idea out there that you need thousands of pounds of disposable income in order to make money from the stock market. While having that much money to throw around would certainly yield bigger results, you can begin investing even with a handful of pocket change.

It’s true! Most online brokerage companies allow general trading free of charge. Many also have no minimum amount required to get started. That means you could get started on trading for as little as £50 a month.

Hitting a £50 or £100 benchmark shouldn’t be too tricky. You could try the cookie jar method, a saving methodology practiced by many early traders. Simply siphon off a small amount, whether it be £5 or £10, every time you get a pay cheque into a separate spot.

At the end of the month, you can use this pot to invest. There are many stocks out there that you’ll be able to get a few shares of, even with the little money you’re able to put forward.

What Stocks Should You Buy?

There are many great stocks for beginners out there. If you only have a few pounds to spare, choosing the right stocks to invest in is still important. You want to get a good bang for your money and grow what you’re able to put in. What stocks can do this?

Generally speaking, blue-chip stocks can be a great investment choice for beginning investors, these are huge companies with deep roots and long histories. Most of the time, you can rely on them for steady growth and a strong sense of stability, though there are a few you might want to avoid.

Those are the exact traits that a new investor in the stock market is going to want to look for. Plus, these companies often offer dividends to investors as well, which can result in additional income.

There are companies such as Coca Cola, Verizon, Microsoft, and so forth. Not all of these companies will be in your price range, but if you shop around you should be able to find a few that will be suit you well.

Getting Investment Help

It can be difficult to get all the education you need about the stock market.

If you’re having trouble determining what to spend your money on, you might want to utilize the help of a robo-adviser. Robo-advisers are free services that many brokerage companies provide these days.

They are automated systems that aid investors in a similar fashion to how a human financial advisor might. You simply input your available finances, goals, and comfortability with risk and the robo-adviser will come back with a number of stocks worth investing in.

This can really help to take the guesswork out of your initial investing process. No one, not even your robo-adviser, knows exactly what will happen with the market. However, these services can point you in the right direction.

Employer Investment Plans

Another way to enjoy the stock market with little money is to speak with your employer. Many companies actually have investment plans in place to aid their employees and assist them in growing long-term wealth.

In most cases, you can opt into a plan that will take a small portion of your pay cheque and put it towards a retirement plan for yourself. This money typically goes towards a collection of stocks organized by your employer. These are generally a safe and diversified collection of stocks that will grow steadily over many years.

Even if you are only able to afford to put a slim 1% of your pay cheque towards this account, it can still add up. Even small amounts of money can grow over years. Plus, many companies offer to match your investment as they get a tax right-off for doing so.

It’s recommended that you speak with your employer and see what kind of arrangement they offer. 

As time goes by and your money grows, you might find that you’re able to put a larger percentage of your income towards this retirement plan. You can increase to up 2% or beyond when you feel ready to.

Investing through your employer provides an easier way to invest. These payments are often set up automatically, so you don’t even have to think about it on a weekly basis. Your money is set up to be siphoned off in this function and you don’t need to manage it.

This can be a great, stress-free way to get into investing.

How to Become an Investor With Little Money

Many people who don’t have large incomes think that they are unable to invest in the stock market. This simply isn’t true. By saving carefully and investing your money in the right areas, you can grow your wealth no matter the amount of funds you have to start with.

Have more questions about making money in the market? Check out our FAQ for more.