7 Profitable Investment Ideas That Won’t Cost You a Lot of Money
Looking to invest money that won’t break your bank? You just need to know where to invest. Discover these 7 low-cost investment ideas that won’t cost you a lot.
Are you working for your money, barely able to make ends meet every month? Or, have you figured out how to make your money work for you?
This is one of the biggest breakthroughs a person can have with their finances. Whether you have $1,000 or $50,000 in your bank account, you shouldn’t just let your money sit there. It’s better to start investing it and create more money than you already have.
Of course, there are no such things as sure-fire investment decisions. But, if you take the time to educate yourself about investing and have patience with the opportunities available to you, you could create more returns than you might think.
The most important thing to know about investing, though, is that you don’t need a lot of money to get started. Here are 7 low-cost investment ideas that could potentially result in huge returns!
1. Penny Stocks
Turns out, the Wolf of Wall Street was onto something by investing in penny stocks. Penny stocks are low-cost shares of companies, typically sold when a company is just starting out and looking for an easy way to get funding.
As the company continues to grow, the stocks become more and more valuable. This creates a good opportunity for investors to turn a low-cost investment into a big return. When the company enters the “standard” stock market, you have an opportunity to sell your penny stocks for a significant amount of money.
2. Peer to Peer Lending
Another way that new and small businesses look for funding is by taking out a loan, but not all of them go through big banks or the SBA. Some business owners look to peer to peer lending to get the funds they need, as do everyday people who need a loan for a car or a mortgage payment.
From the investment perspective, peer to peer lending allows you to help others and generate returns for yourself by charging interest. You get to choose who you lend your money to, how much interest you charge them, and how long your contract will last. You basically become the bank, but without either of you having to worry about a middleman.
3. Mutual Funds
Up next on the list of low-cost investment ideas is mutual funds.
When you invest in a mutual funds portfolio, you’re basically going into an investment with a lot of other people. The company you give your money to pools everyone’s investments to create one large, diversified shared portfolio.
This may be a mix of stocks, bonds, and short-term debts. All the investors that chipped in for one mutual fund get a portion of returns on if things go well.
4. Exchange-Traded Funds
Not sure you want to put your first investment into the hands of a mutual funds corporation? Consider investing in exchange-traded funds instead.
These are kind of like a mutual fund, but you’re able to trade such forms of investments in the same way you would a standard stock. You can purchase just one share of an EFT and start reaping returns on it. Of course, you’d get more out of such an investment by buying more shares, but this is a good place to start if one or two is all you can afford.
There’s also the opportunity to enter the world of stock splits and ForEx trading, which FP Markets can tell you more about.
5. A Roth IRA
Keep in mind that stocks and business investments aren’t the only ways to make more money out of what you already have. You can also find investment opportunities if you take a closer look at your tax bracket and payment/returns setup.
The next time tax season starts up, look into the option of opening a Roth IRA. This allows you to pay the taxes for your investments up front. Otherwise, you’d have to pay a lump sum of interest once you cash out on all your investments – regardless of how large or small they are.
Starting a Roth IRA now means you have less to worry about later. It allows you to lock in current interest rates and enjoy the peace of mind of having your taxes paid for, too.
6. Savings Interest
Here’s something to think about: why not take your money and put it away for yourself? Instead of investing in a company’s stock or taking on a random peer to peer lending deal, put your money away for a rainy day.
But, do so in a savings account that accrues interest, not by stashing your cash somewhere. This one simple move can significantly add up over time. The best way to ensure this kind of investment gives you a good return is to not touch it for a while, though. Keep this in mind as you add more and more money into it.
The final investment idea worth looking into with a small amount of money is retirement.
It’s never too early to start planning for the day that you don’t want to live off a paycheck anymore. The sooner you start investing in retirement, the more likely you are to be able to retire quickly.
This gives you not just more money to enjoy at this stage in your life, but also more time. Investing in retirement now could mean that you stop punching the clock at 45 or 50 instead of 55 or 60.
Get the Most of All These Investment Ideas!
It’s one thing to realize which investment opportunities are available to you right now and another to figure out how to succeed at investing. Whether you decide to put your money into penny stocks or your own retirement fund, you need to have your wits about you as you do so.
This is the best way to protect your funds and get the most out of any of these investment ideas. For more tips and tricks on how to be financially savvy, click here.