How to invest when you don’t have extra money

Let’s be honest. In my 20’s I hadn’t really thought about investing for my future. As I was once a single mom struggling to make ends meet– I was looking to just buy a new car and make sure we had a roof over our head. Retirement? Ha!

Even if someone had talked to me about retirement I don’t think that would be a high priority on my to-do list as I didn’t really have a lot of money. However, I wish someone would have told me how little cash I really needed to start investing in my future.

Most people think that being able to invest takes a bank account with hundreds of thousands of dollars in it or a fancy financial advisor. but that thought process couldn’t be farther from the truth. In fact, there are plenty of investors who all started with small investments that they allowed to grow over time to create a large portfolio. 

You can even start investing as soon as right now! Betterment.com allows you start your own account with $0.00 deposit and charges a small fee each month (rates depend on how much you deposit) It also takes the guessing out of retirement and gives you suggestions on how you should invest your money. (Take a look here)

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Here is a real life example: Let’s say you spend $5 a day at your favorite coffee shop. Okay, so you’ve just spend $5 you will NEVER get back.. That is $25 a week if you go 5 days a week or $1200 a year! Again, you will never see that money again.

Let’s say you invested $5 a day into your future for one year. That $1200 can turn into almost $40,000 in 40 years on a 9% return (think of a return as interest being paid to YOU!) Imagine what you can do with $1200 EVERY year that you invest!

Year 1 ($1200) = $40,000 in 40 years

year 2 ($1200) = $80,000 in 40 years

year 3 ($1200)  = $120,000 in 40 years

and so on..

If you’re looking to start investing, but don’t have a lot of money, check out these 6 ways to “find” money to invest. They’re small, but each one will help you build a portfolio that will grow into something big.

Invest Your Grocery Savings – If you’re a couponer, you know just how much money you’re saving each week or month. Why not use that savings to invest? At $50 a month savings, that is $600 per year that you could be investing. If you’re not the couponing type, why not work to cut your grocery bill as much as you can? Even $10 per month savings adds up over the course of a year to money that can help build your portfolio.

Invest Your Sales Proceeds – Having a yard sale soon? How about when you consign your kids clothing? Those proceeds are perfect for small investments. Use them to buy small shares of stock or pool them together to buy a bond. If you’re not the risky type, put them into a Money Market account or CD and let a higher interest rate help them grow.

Bake Your Way to Investments – If you can bake well, take a look at selling baked goods. At an average profit of $15.00 per cake (based on a sales price of $25.00), it would only take a few cakes each week to bring in a tidy sum that can be invested. If you sold 3 cakes per week, at $15 profit each that would give you $180 per month ($2,160 annually) to toss at your investments.

Round Up to Investments – Doing your budget? If you’ve got bills that have odd cents on them (i.e. $155.31), round those numbers up to the next whole dollar. Take the difference and invest it. You would be really surprised at how quickly those little pockets of change can add up to strong amounts.  If you’re looking for something to do this for you, check out the iPhone app called Acorns. It will do the rounding for you once it’s connected and withdraw the differences once a week to invest.

Take a second job for investment cash– If you’re truly serious about building your financial portfolio, taking a second job may be the answer you’re looking for. Even working part-time just a few hours per week can easily bring in a couple of hundred each month that you may not have on hand now.

Nickle and Dime Your Way to Investments – As financially savvy people, we can often overlook the small ways to save. One of the best that I’ve found is Digit. Digit connects to your bank account and every few days will pull a small amount of cash out of your checking and keep it in your Digit savings account (FDIC insured). The best part about this is that the amounts are based on your own spending so you will never truly miss them. Let Digit do the nickel and diming for you and once a month or so, withdraw the cash and invest.

The reality is.. If you have enough money for that $5 coffee–you have no excuses. 🙂

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