How to invest small amounts of money
When you are still young and only working part-time, it’s hard to find any money to invest. Most of the money you do save you probably put towards college.
Still, even with just a little bit of money, you can invest. But where can you invest such small amounts of money? So many brokerage firms say you need $1,000 or more to invest. What should you do?
The first thing you can do is save up money to invest. Just because you’re able to put $10 aside this month to invest doesn’t mean you need to invest it right away.
You could put it in an online savings account such as
The Orange Savings Account. Earn 4.50%. Great rates, no fees, no minimums
for the time being. This way you can make some interest on it.
Another way is to invest in a low commission online brokerage firm such as sharebuilder.com. You could invest $10 at once if you really wanted to. I would still suggest you have at least $50 before you do a trade. $4 trades can add up especially if you do them frequently.
Also, if you are stock investing with sharebuider.com, don’t go crazy trading. When you buy stocks you only have to pay $4, but if you sell them you have to pay $15.95. That’s even more incentive to stick with the buy and hold strategy.
If you are more interested in investing in bonds, you can try the savings account route. Save with high interest until you can buy the bond you want.
Remember, even if you don’t have a lot of money, you can still invest. All you have to do is pick the right brokerage firm, save when you can, and beware of costs. Small investments can add up to large amounts, so be persistent!
