How to Get Started with Trading When You Have No Spare Income


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There’s nothing worse than getting caught with the investment bug with little or no money. However, too many people have the impression that you have to be worth thousands of dollars before you can even start thinking about investing. But in this day and age, it’s very well possible to build a solid nest egg with nothing but a few bucks a month. In this article, we’re going to give you a few tips on how to start investing with no spare income.

Start Saving

There’s no easy way around this. You’ll have to be able to change your spending and budgeting habits if you want to build minimal start-up capital. This is what your savings account is for; try to set up your account so that a portion of your paycheck is deposited directly into your banking account every pay day. It doesn’t have to be anything crazy, something as little as $20 per week can easily add up and give you more than enough to get started after a while.

Consider Getting Financing

If you have a business and you have limited cash flow, then you could consider something like an asset-based loan instead. Lenders like Lending Express will offer you a loan based on your business’s assets and use them as collateral. These are great for a variety of reasons. When you compare these types of loans to other options, they’re much cheaper than unsecured business loans for instance. There is also a variety of tax benefits on asset-based loans that you can take advantage of, so make sure you are aware of those as well. 

Start Looking for a Discount Broker

There are tons of apps and discount brokers out there that are very user friendly and don’t have the same barriers to entry as other brokers. Robin Hood, for instance, is great for beginners, but does have its flaws. For one, it’s pretty limited in the kind of trades you can make. You can’t invest in things like mutual funds for instance. On the other hand, the cost per trade is incredibly low and the app will allow you to perform most regular trades with no issues.
But if you want more of a hands-off approach, Betterment would be a better option. They will actually invest your money for you after you’ve completed their questionnaire. Betterment also has tons of great ETF funds that allow you to target whole segments of the economy instead of individual stocks without some of the limitations of mutual funds. Betterment is in my opinion one of the best options out there if you have limited means and you want to invest. There are no minimum deposits requirements and you can invest as little as 10 dollars at a time.

Start Looking at Mutual Funds with Low Initial Investments

Mutual funds are securities that give you the chance to invest in multiple stocks and/or bonds with one single transaction, which can be a great option for new investors. However, one of the issues with those is that they often require a very high initial investment. But some funds will waive these fees if you agree to automatic monthly investments. These monthly investments can be as little as $50 per month, so make sure that you consider these as an option as well.
Investing on a modest budget is perfectly possible once you access the right resources and have a realistic outlook. Starting small is the best way to know the ropes and gradually increase your knowledge one trade at a time.

The views and opinions expressed herein are the author’s own, and do not necessarily reflect those of EconMatters.

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