Everyone knows how important it is to invest their money, but the truth is that for many of us, it simply seems like a goal without hope at the moment. Most of us are looking for ways to simply save money, in case of an emergency or to keep a couple luxury items in our lives, so the concept of having enough capital to actually use it to make more just seems like wishful thinking. Fortunately, there are some very practical ways those of us living on a budget can still invest.
For one, your company may offer a 401(k) option you can be using to make some really easy returns. Many employers will even match the funds you put away, which essentially means free money.
But be smart. If your company’s 401(k) hasn’t outdone the S&P 500’s rate of return, you’re probably better off going a different route. It only takes a few minutes to research mutual funds that are outperforming the S&P 500’s rate of return, for example. Choose one, begin investing in it and simply check back once a year to make sure it’s still performing well.
Another option is to look into exchange traded funds. These act a lot like mutual funds do, but they’re much easier to buy and trade because, in that regard, they’re more like shares. What’s more, you have countless ETFs to choose from which means plenty of diversity. Just about any industry you want to invest in is represented by ETFs.
It’s also worth considering low-cost brokerages you can find online. You’re not the only one who wants to invest but doesn’t have thousands of dollars lying around to do it. A market has grown for brokers who can make people modest sums without requiring large amounts upfront.
So don’t tell yourself you can’t invest until you’re already wealthy. It’s just as important that you have money set aside that’s growing every year. With the above options, this can be a reality.