If you are interested in investing your money but feel like you need to have a lot of money saved up.. this post is for you!
Nowadays, you no longer have to save up a lot of money to begin investing. The amount you need to get is the exact amount you want to invest in. With options in the market such as the micro-saving and investing app Acorns and (upcoming) FataFeat, individuals can use the amount of money that they have to begin investing in stocks or ETFs for example.
The idea that you have to have a lot of money to begin investing can be considered a myth. With the availability of apps, people can begin investing with the money that they have on hand. It goes without saying, only invest the amount of money you are willing to part with… no matter the outcome.
So, if you are not sure how to start, to make it simple you can follow this simple rule to get started in investing:
Rules of 3: spending, saving, and investing.
Distinguish between your savings account and your investing account. When you get your salary, immediately set money aside in two separate accounts: the investing and saving accounts.
Spending (aka the money in your Current Account)
Have a set amount for your fixed costs (i.e. bills, rent, and subscriptions).
Once you have allocated the money for your spending and general expenses, put a set amount aside for investing purposes. How you choose to invest that money is up to you. But, make sure to keep it. Put some money away into the stock market that you are not saving for life.
This goes without saying that it is important that you save a portion of your money for a rainy day, retirement, or a goal. Typically, if all our money is allocated in the savings account, it is harder for us to take money out and use it for investing or other purposes. We also want to encourage our readers to always set money aside in a savings account and ideally not touch it unless necessary.
If you set some money aside monthly for investment purposes you’ll be more likely to use it for that purpose. Of course, look at your financial situation to determine how much you are willing to set aside. And invest only that amount which you are willing to potentially lose as there is always some form of risk in investing.
It is important to note that you should do extensive research. Make sure to look into the best options for yourself and look at your goals (both short and long-term).