Investing can be difficult for anyone. There are so many types of investments to choose from, all with different conditions, minimums, goals, purposes, commitments, riders, and more.
So even if you’re just an average Joe looking to put some savings into the market, you have a lot of decisions to make and details to consider first.
To make matters even more difficult, what if you don’t have a lot of money to invest? Investing when you don’t have a lot of money requires precision and attention to detail and you may or may not have a certified financial advisor to lean on.
You have to be confident in the moves you’re making, since it’s likely that you don’t have a second stash of money lying around in case your first attempt doesn’t pay off.
Here are some tips for investors who don’t have a lot of money.
Look at the Minimums
A high minimum can mean several things. It may be more risky, it may be meant for long-term use, or it may be due to something else entirely.
If you’re low on money, you should probably look for lower minimums so you can diversify your investments instead of limiting yourself with higher costs.
How Long to Leave the Money
Know how long you have to leave the money there. Consider your personal situation. Can you can live without this money for an extended period of time?
If you can, there are certain investments that are made for long-term planning. If you can’t, look for something you can pull out of sooner without running into major surrender fees.
Look at the Risks
If you don’t have a lot of money, you may not want to put your money into a particularly high-risk investment. You may favor a more reliable, conservative option instead. Of course, it all depends on your individual situation and needs.
Invest somewhere that offers a match. Some investments match all or part of the amount you contribute. This can have great advantages, especially if you’re strapped for cash.
Check for Hidden Fees
Getting hit with a lot of initial investment fees can set you back pretty far, especially if you don’t have a lot of money to invest in the first place. Make sure you’re aware of and prepared for any fees you’ll have to pay when you invest so you won’t be caught off guard.
Keep an emergency fund. Don’t invest everything you have at once. It may be tempting to put all of your savings into the market, especially when you’re trying to create a diverse portfolio without a lot of money to work with.
You should aim to have an emergency fund you can access at any time that will cover at least six months of expenses.
Life can be hard when you don’t have a lot of extra money, and investing is always a little tricky. Add those two together and you can end up in a pretty stressful situation.
It takes research and patience, as well as attention to detail. The key is to find investments that you can rely on, that will be the most beneficial to your unique situation. If you are able, think about hiring a certified financial advisor to help with your investing.
At Medallion Financial Group, we believe financial planning is about Family. We have been helping families invest in the future since 1987 through a holistic planning approach. We recognize there are a variety of needs when it comes to retirement planning, plan rollovers, annuities, college planning, life insurance options, and investment management. It is easy to get lost in a sea of choices. Our financial advisors help with the basics and beyond to enable our clients to get the education, advice and management they need to retire with confidence.
Our focus is twofold: first and foremost, we are fiduciary advisors. We stand against any violation of laws, values, and ethics. Second, we treat our clients as part of our family, not only those who call Maryland and Georgia home, but clients across the US who have benefited from our reputation of personal service, integrity, and expertise.
We strive to exceed client’s expectations – because we have high expectations of ourselves.