Best Ways to Invest Money in 2020
Every penny can make a difference. Here are the best ways to invest money.
When thinking about ‘investing’, the first thing you might think about is men in suits, looking at their monitor at the latest changes in the stock market. But don’t worry! Invest doesn’t have to be this way at all. Anyone can start investing in these best ways to invest money.
To become successful in invest, you should build good habits. This is the key to building wealth. For example, you could put a couple of dollars away every month. If you swap getting lunch for let’s say 2 times a week at a local restaurant for eating at home. You can save around $40 a month.
Doing this a couple of months, and you will start to save up some money to invest. Once you got some money saved, you can start investing.
Luckily for traders and investors, we are living in 2020! We can get a pizza online with just a couple of clicks on our smartphone or get an Uber within a couple of minutes. For traders, there are Robo-advisors, which can make you money while you are enjoying something else. Another example is the great trading apps available nowadays, where you can start with as little as $5!
There are endless possibilities for new traders and investors noways. So let’s dive into the best ways to invest money!
1. Jar Method
To invest money, it probably is a good idea to have some money to invest in. As I told you earlier you can start investing with as little as $5. You can for example put away $10 a week ($40 a month) for investing. When doing this for a while the amount will increase and soon you will have a nice amount of money to invest.
I called this method the ‘Jar Method’ because what I mean is that you can put the money in a jar for example. If you don’t have a spare jar, you can always use something like an envelope or shoebox. Just to give you some ideas, but it can almost be anything.
People who prefer using an electronic equivalent of this approach can use an online savings account. There are many out there you can check out!
Robo-advisors have been around in the investing scene for about a decade. Robo-advisors make investing as simple and easy for everyone. You don’t even need prior investing experience, because the Robo-advisor will do the investing for you.
A Robo-advisor will ask you a couple of questions to determine your goal and the risks you are willing to take. After answering the questions, the algorithm will invest your money.
Starting with a Robo-investor doesn’t require a huge amount of money. Many of the Robo-advisors require around $500 to start. This amount can vary is can even be lower than $500.
One of the few downsides to a Robo-advisors might be the cost. Robo-advisors charge you an annual fee based on your balance. These percentages are around 0.25%. When investing $5000 a year, it will cost you $12,50.
Important to say is that the fee you pay for your Robo-advisor is on top of the fees charged by exchange-traded funds that Robo-advisors use to make up a portfolio. This can be avoided by building your portfolio. However, this requires some additional work, so it might not be the way to go for anyone.
TIP: Want to invest in your own business instead of someone else’s?
You can start a dropshipping business for example! If you would like to start your own e-commerce business feel free to check out my blogpost about dropshipping here
3. Invest in stocks with little money
As said in the last section about Robo-advisors, investing doesn’t have to cost thousands of dollars. This is also true for this method I’m going to discuss with you.
The Internet has made it very easy for a broad range of people to get started with investing with little money upfront. So you can start with a small amount and get some experience, and later start putting some serious amounts of money.
Even $1 can get you started today!
Before the internet. Stockbrokers charged commissions every time you bought or sold stock from them. Today, there are even $0 commission brokers on the internet that make it easy to start with a low amount of money upfront.
Another example of investing with a low amount of entry is investing in fractional/partial stocks. Fractional shares mean that you buy a ‘fraction’ of a stock. You don’t even have to buy a full stock anymore. This results in that you can diversify your portfolio even more. If you would like to invest in high-priced stocks like Tesla or Apple, you don’t have to pay hundreds of dollars at minimum to get 1 stock. You can just buy a fraction of that stock for a fraction of the price.
check out this investment calculator
If you are looking for a good reputable broker. I would suggest checking out Public. Public offers thousands of stocks and ETF’s with no commission fees. They also don’t require an account minimum. With public you can buy so-called ‘Slices’, so you don’t need to invest thousands of dollars to become a shareholder in a company.
For this reason, I suggest you check out Public. Especially if you are into investing with little money. If you are interested, feel free to press on ‘Public’ below!
4. Rent out some properties
You might think that you need a lot of money and good credit to invest in real estate. Fortunately, this is not the case anymore! A new category of investment, called ‘real estate crowdfunding’, makes it possible to own a fractional share of a large property.
This method takes for example around $5000 instead of the $500 you need for a Robo-advisor. With this kind of investment, this risk is also higher. Because you are putting the whole $5000 in one property.
Investing in real estate using crowdfunding platforms can cost you fee’s that you wouldn’t need to pay if you had your property instead. But with a downside, comes an upside! The advantage of buying a property via this way is that you share the cost and risk with other people who have also invested in the same building. So this way you are not carrying all the risks on your own.
If you are interested in getting into this kind of business. I think that this method is a very good method to invest money. And not only are you investing, but you are also learning about commercial real estate. So in my opinion this can be a very profitable and interesting way of investing your money.
Tips when investing
When you are going to invest your money, some of these tips below may come handy so I decided to put a couple of them up here.
give your money a goal
Before starting to invest your money you may want to determine what your goals are. Are you investing for a quick dollar or are you investing long term? When talking about the short-term, think about the vacation you are planning for next year. When thinking about the long-term, think about your retirement.
Most of the ways to invest in this article are best suited for the long-term. Generally speaking, you should not invest in the short-term, because most of the time it is not worth it. Of course, it is up to you, but this is what most investors will tell you.
choose investments that match the risk you are willing to take
You can take as much risk as you would like when you are investing your money. There is no one golden answer to how much risk you should take. This is completely up to you. The risk most of the time depends on your goals.
When talking about risk in investing, I want to make sure you understand that you shouldn’t invest more money than you are willing to lose! This is very important in my opinion.
Now you now the most interesting ways to invest money in 2020. And as you have read in this article, you don’t even need thousands of dollars to make your first investment! I hope this article gave you a good vision of how to invest (with little money).
Feel free to leave a comment if you have any questions or comments about this blogpost!
I have a financial relationship with Public and will be compensated if consumers apply for an account and/or fund an account with Public through links in my content. However, the analysis and opinions expressed here are my own.