Many people count themselves out when they think about investments as they look at their paychecks. According to a recent study, the number of Americans who invest in the stock market has declined since the 2008 economic crash. Although the numbers are steadily increasing, there are still a lot of skeptics who would prefer to keep their money or spend it on their expenses.
There are many advantages when it comes to investing early on in life. Trading and Investment Strategist Sean Seshadri explains to us the benefits of having multiple streams of investments:
- Opportunities for passive income – the top wealthiest people, do not depend on trading their time for money. Through several wise investments, they were able to create a source of passive income, which means that their investments work for them and develop dividends in the long run.
- A lifestyle of freedom – who doesn’t want to be free from fiscal responsibilities? A lot of individuals are stressed out about many things, money included. Making investments can help you be financially free, which allows you to do the things you want.
- Accumulating money for retirement – as time passes by, you may frequently think about your retirement and how you will be able to function without having to work. Creating investments at an early age can help you feel secure about your retirement plans.
Considering the benefits of being financially secure through investments, what are some ways to grow your wealth even with limited income?
4 Ways To Make Big Investments On A Small Budget
Consider real estate crowdfunding.
Perhaps you don’t have enough budget to have your single real estate property. No worries! There is a mounting option for investors to have crowdfunding regarding real estate property. This is similar to buying a fraction of “shares” towards a potential growth of a real estate property. As the real estate property earns profits, you will also be given dividends depending on your amount of shares.
Consider opportunities for compounded interest.
Compounded interest is defined as an interest that accumulates and grows over time. For example, you may have started placing $100 in an investment. You may start by only having 2% interest annually, which means you get $102 by the end of the year. However, through compound interest, you will acquire 2% of the $102 on the following year as the pattern of exponential growth continues further. A lot of bank accounts and some bonds offer compounded interest over time. This can be a considerable amount especially if the money remains in your account over a long span of time.
Try out exchange-traded funds (ETFs).
According to Sean Seshadri, ETFs are a great way to invest your money as an alternative to index mutual funds. You can avail a brokerage account and use it to buy ETFs. As a general rule, ETFs don’t require you to pay a commissioner’s fee, and they have a lower barrier of entry compared to mutual funds. You can inquire in your bank or a trusted investment company for ETF offers.
Experiment on peer to peer lending.
All around the world, there are people finding ways to borrow money to fund their businesses. These people are willing to borrow as soon as possible, even with potential interest. This system you can invest your money is called peer-to-peer lending, and you can easily set up an account on websites such as Lending Club. As borrowers return your money, you can gradually gain interest while you reinvest your profits for future borrowers.
As you consider these strategies, it is good to know that you don’t have to be stuck with the ideology that you have to earn more to make more. Small budgets can turn into significant investments with the proper guidance and right strategies.