Despite the popular opinion, the stock market is not only the lot of rich people. Investing is one of the best ways to get rich and become financially independent over time.
The strategy of investing small amounts regularly and for a long time may ultimately lead to the snowball effect, when the amount of investment reaches a significant size and grows exponentially.
Any successful investor knows that in order to succeed in long-term investing, it is necessary to choose the right strategy and remain calm, discipline and determination to the very end.
1. Decide how much and how often
The first step is to decide how much you are willing to invest and how often.
· This is important because some investment instruments have initial requirements and restrictions that can be removed for you if you are willing to invest regularly over time.
· It will also be good practice and allow you to add an investment item to your budget.
· Do not stop at more than you can actually pay for a long time and which will not violate your usual lifestyle and required expenses.
2. Find an investment broker
The next step is to find a brokerage firm that will make investments on your behalf. You need to pay attention to the cost factors and quality of services that the broker offers.
- · The cost of services is a quantitative factor, the approximate cost of services that you will take into account. And the quality of services and their value to you is a qualitative characteristic that depends on your subjective assessment of the effectiveness of the broker's company.
- · For example, there are special types of investment accounts that allow you to independently invest the invested funds with a very small commission. This option is ideal for those who already know where they want to invest.
- · However, if you need advice and advice on where and how best to invest money, a place with a higher level of commissions, but also with a better customer support service, will be more suitable for you.
- · Given that there are currently many inexpensive brokerage houses, you should be able to find a company with low prices and with a satisfactory level of customer support.
- · Use the online search for “online invest broker” to get a list of online brokerage companies, or find local investment agencies whose offices you can visit. Do not forget to request and carefully compare prices for services, including hidden, not obvious payments, before signing the contract.
- · Each investment broker has its own pricing policy. Pay particular attention to the cost of those services and plans that you plan to use most often.
Save money or make small investments
You can start investing a little money already from 1000 rubles. However, many beginners are interested in whether it is worth bothering with small investments or is it better to dig in and engage in serious investments. The solution to this issue in human psychology. We are used to waiting all the time for the right moment, to set aside for tomorrow and cherish a new idea, without giving it practical development. Therefore, you need to act immediately, as soon as you have the minimum capital, and there is 3 reasons:
- Not scared to lose money . It is much easier for a person who does not have investment experience to accept the loss of small money, which at first happens in 90% of newcomers.
- Every day is lost profit . The time that money is idle and does not work for you at all can be considered lost. And if inflation is taken into account, then every year your capital decreases by 5-7%.
- It’s harder to get started with age . Over time, we have more fears, because of which there is a risk of never engaging in investing.
Where it is, and where it is not worth investing
The most popular way where you can invest a little money to earn is lottery tickets. People unknowingly spend decent money on crane in the sky. And the most attractive for a novice investor seems to be a bank account. In the first case, you can invest endlessly, but lucky or not big question. In the second case - putting money into the bank at interest does not make sense. Indeed, with small investments, the income will be quite penny.
There is also an opinion that it is beneficial to invest a small amount of money in depersonalized metal accounts. They are opened when buying from 1 gram of gold. In fact, the yield from such transactions does not exceed 1.5-2%, and if the metal prices fall, a loss is also possible.
These projects work with small investment amounts:
Therefore, we recommend that you consider other more profitable ways:
- Buying precious metals . Where can I invest a small amount of money? Gold investment coins. They do not include VAT and they are in terms of an ounce cheaper than bullion. What profit can be made will be shown by a vivid example. In 2004, Sberbank issued the Sower coin, the purchase price of which was 1800 rubles. To date, the bank is ready to buy it back for 8,000 rubles.
- Stocks and bonds . Many large companies such as Norilsk Nickel, Alibaba, Facebook and others provide the opportunity to purchase shares individually. It is certainly not as profitable as taking them in a lot due to the high commission. The most successful option, where you can invest a little money - bonds. The cost of most bonds starts at 1,000 rubles. Loan term up to 5 years.
- Mutual funds . The lowest cost of one share starts from 3000 rubles. A commission will be deducted from this amount for the purchase and redemption of a security. Trusting her experienced management company, you should rely on an income of 22-26%. Be prepared for the fact that you will not see the income from investments in mutual funds right away, but after a year or two.
- Domains . Investing in domains is not a new, but rather profitable method of investing little money. Buying beautiful names in popular topics, you can independently set the price of their sale. Count on the constant profit from the sale is not worth it. But a one-time deal can pay off handsomely. We give a curious example. The popular businessman Artemy Lebedev in 1997 registered the domain "Vodka.ru". After 9 years, he was able to gain $ 50,000 from the sale of the domain name to Russian Standard.
- ETF . Index reflecting the value of securities, a new and promising way to invest. With it, you can invest a small amount of money in real estate, gold, shares of regions and countries, government bonds. The acquisition is carried out through a broker, and the commission is only 1%.
- Infobusiness . The most suitable direction where you can invest a small amount of money. You can make a training base or program in the field that you are well versed in. This includes collecting the base for a particular business with its subsequent sale, paid access to viewing information, and the like. True, the competition in the field of information business is high and much depends on the promotion of the information product.
For clarity disadvantages and advantages all of the above tools are presented in the table:
|Type of investment||pros||Minuses|
|Investment coins||Significantly increase in price.||Long payback period.|
|Mutual funds||Good profitability, professionals manage the money.||High commissions, the need to pay them even in case of loss.|
|Domains||High profit in perspective.||Long pay off.|
|ETF||Low commissions, a variety of investment objects.||Many different indexes, basic information in English.|
|Bonds||Minimal risks included in the priority payment in bankruptcy.||Bond holders do not have voting rights, unlike shareholders.|
|Infobusiness||Minimum investment at the start, quick payback period.||High competition, good knowledge required.|
How to get maximum profit with a small deposit
If you invest a small amount of money, for example, 3000 rubles and wait 5 years, then income even at 25% per annum will seem insignificant. The most important thing for investing in small amounts is regularity. By investing 1,000 rubles each month, you invest in the amount of 12,000 rubles. in year. And you see, this is a good start.
There are no barriers to making money on small investments. Of course, for modest dividends, you can’t immediately provide yourself with passive income, rather, first you will pore over investments.
Some investors, in fair condition, try to invest a small amount in different objects in order to reduce risks. Take penny contributions as part of a sound strategy and replenish your investment account every month, then your humble beginnings will pay off in full.
Options for investing a little money.
But let's not yet dream of billions, our goal is to choose a project that can save our funds from losses and make a profit, at least covering inflation. In the best case, investing can become a source of passive income sufficient to pay for everyday needs and even create a fund that can be used for expensive purchases and other large expenses.
It is not surprising that we consider this investment option first. This is not the best option for where it is profitable to invest a small amount, but the safest, and affordable for almost everyone, since the minimum deposit amount here can be several tens or hundreds of dollars. But the percentage of profit on bank deposits with such amounts will not be able to make you a successful investor. 8-10% of profit per year is considered an excellent indicator in the banking sector. Yes, your funds will be under maximum protection (and it’s written with a fork in the water!), Deposits up to a certain amount will be insured, but the investor’s ambitions will not be satisfied. For small investments in deposits, in order to obtain a better result, preference should be given to long-term investments (not for a year, but for years), with reinvestment. Then, by retirement, your 10,000 rubles can and will be able to turn into an amount that turns out to be useful. You can calculate the amount of profit in a bank investment using the online calculator on the AvtoForex.ru website.
Investing in precious metals.
If you are considering the option of investing a little money in precious metals (usually gold or silver), then you need to weigh all the pros and cons. The purchase of precious metals is relevant in times of crisis, since it is there that money flows from the stock market. At the same time, this is not about jewelry (it can be difficult to sell them later at the purchase price), but about bank gold in the form of bars. Gold bars can be purchased at banks, and some brokers, in particular Alpari, have gold coins. This type of investment is designed for the long term, from 3 years or more. Profitability is 3-15% per year, but in a crisis the percentage is much higher. The disadvantages of buying precious metals in order to increase capital include the need to pay income tax in case of sale of gold when it is owned for less than 3 years, as well as high commissions for operations on the purchase / sale. Despite the high reliability, investments in gold are more suitable for preserving the available funds than for multiplying them. In addition, such investments are designed for a longer term - from 3 years or more.
Investments in stocks and bonds.
If such prospects do not attract you, and you continue to look for alternative options in which to invest small amounts (from 5-10 thousand rubles) for more tangible profit, then you can consider the option of buying shares and bonds. As for stocks, this is a more risky tool compared to the previous two, but with a competent approach, it allows you to get a good profit increase. You can earn on stocks in two ways:
- - receiving dividends from their purchase,
- - trading in shares (more precisely, CFDs on shares) on the stock exchange and winning due to the growth (mainly growth, but possibly due to a fall) of their price.
In the second case, it makes sense to buy shares of large companies during a rapidly growing trend or after a small rollback of their price. You can conduct both active trading in the instrument and make transactions for up to several months, waiting for your profit. For example, if you invested in Google’s shares three years ago, now you would have received 100% profit.
Another advantage of such investments is high liquidity: stocks can be easily sold or bought, despite the low entry threshold, but also to sell and immediately get cash on hand. The risks involved in investing in stocks are their depreciation during crises, both economic and within the company itself.
Bonds (they are also debt receipts), where large companies or the state act as a borrower, is another tool where you can invest a little money. The rate on bonds usually exceeds the rate on bank deposits, it is from 7 to 15% per year, the level of security of funds is higher here. Bonds can be sold at any time.
It is possible to invest in bonds with a higher percentage of profit, up to several hundred, but the risks here are much higher. An issuer offering such a percentage may soon go bankrupt, so if you take any chances, then you will lose an amount that is not a pity.
Investment in mutual funds.
A mutual fund (mutual investment fund) is a kind of trust management project where investors invest in a fund (buy shares), and fund managers invest them in various projects, the same stocks, bonds. If a mutual fund successfully manages investments, the shareholder receives income, otherwise it suffers losses. Since the regulation of mutual funds is carried out at the state level, managers avoid high-risk investments. With low risks, the mutual fund yield is up to 30% per year.
There are unprofitable periods, but over the period of several years, many mutual funds show positive dynamics. It is recommended to choose several funds for investment. The minimum investment is from 1000 rubles.
Fig. 1. An example of the return on mutual funds.
The Internet offers a lot of prospects for the development of online businesses for absolutely everyone - regardless of age, profession. The implementation of projects, depending on their complexity, may require a lot of time and investment, but it may not require large investments. Among the popular online business areas are the following:
- - sites - if this is an informational site, then its owner can make a profit by advertising. Of course, the site should contain unique content and be interesting to users. After six months of creating such a resource, depending on its subject, you can earn from 200 to 3000 rubles per day on advertising. But before you engage in this type of activity, you need to delve into all its key points,
- - social publishers - owners of publishers in social networks with subscribers of several tens, hundreds and even several million subscribers earn thousands and tens of thousands of rubles for publishing ads on their website. To achieve such successes and gain the necessary base, it is not necessary to be a media personality, it is enough to be interesting to the public, offer interesting content, engage in its development and promotion,
- - affiliates - many business owners to attract even more customers / buyers for their product are ready to share part of the profit with people who are able and willing to help in attracting, that is, with partners. Payment for the partner’s services is made by a fixed amount or a percentage of sales of goods / services by attracted customers. If you are new to this industry, then pay attention to the partnership programs of manufacturers of cosmetics, household chemicals, clothes, you can even strengthen partnerships with brokers and dealing centers, banks,
- - applications for smartphones - occupy a large market segment with a large cash turnover. If you have an interesting idea for creating a useful application, then you can try to implement it. You can start creating the application yourself, or use the help of specialists on freelance exchanges for reasonable money,
- - Freelance exchanges - if we already mentioned them, it’s worth saying that a number of specialists can find money there: from writing texts (copywriting exchanges) to designers and decorators. And in the absence of skills, they can be acquired from numerous free or paid courses (investing in new knowledge) on the Internet and only then promote yourself and look for work on the Internet,
- - HYIPs - projects comparable to financial pyramids, surviving due to investments of investors. They offer 1-5% profit per day, but they can act only a few days or weeks, and then simply disappear. You can find more tenacious hype, but the percentage of profit on them will be less. В любом случае - это один из самых рискованных видов онлайн инвестиций, в которые не стоит влезать без нужных познаний.
Summing up the review of Internet projects in which you can invest, it should be said that there are good prospects here even with small investments. But for such investments, this or that knowledge may be required, time for their creation and development.
Venture capital investments.
Venture investment is another area where it is profitable to invest a little money. This type of investment is more popular abroad, but this does not mean that you cannot consider it. The essence of such investments is that the investor invests in projects at the stage of their creation, and even at the stage of development of the idea. If the project is interesting to the public and can develop, then investors will receive a profit of several tens, hundreds and even thousands of percent. However, out of 10 ideas, only 1-2 are really successful. But on the other hand, the profit from them covers all losses from unsuccessful projects. By the way, everyone knows Apple, Google, and even AliExpress - they all started with venture capital investments.
Investments in the Forex market, perhaps, can be highlighted in a separate article. Yes, what is it there - we lit up a whole site to earn money in the foreign exchange market. If you decide to consider this type of investment, you can choose one of several areas: classic trading, investing in PAMM accounts, copying deals of successful traders, binary options trading. Each of these areas requires an investor certain knowledge and skills. Do not worry, if you wish, anyone can learn how to correctly withdraw money from the Forex market.
If you want to manage your funds yourself, then consider the option of classic trading. Undoubtedly, to master it, it may take some time, several months, or even years, but trading attracts with its high prospects and the possibility of increasing the initial investment at times. Acquaintance with the basics of Forex, a trading platform and technical tools, choosing a broker for cooperation, choosing a trading strategy or an automatic adviser, gaining experience and checking the selected system on a demo account - these are the points that must be completed before you invest your funds into real trading. Ready to become not just an investor, but also personally manage your investments? Go ahead then!
A similar procedure will need to be followed when choosing the option of investing in binary options. In order not to lose, but to increase your funds, you will need to spend time mastering the technical and analytical part of options trading. The size of the initial investment in the Forex market may be $ 10. And to disperse them to several hundred is quite real.
If you are not set up for independent trading, then you can consider the option of PAMM-investment, where experienced traders will manage your funds in the Forex market. With low risks, the profitability of such investments ranges from several tens to several hundred percent per year. Higher profits - higher risks. Although, some companies offer absolutely risk-free investment - you either stay with your own or get a good profit! How can this be? - you ask. Meet the risk-free investment from the Alpari broker.