In the past year, Elon Musk has added about $100 billion to his wealth.
That’s not even the most astonishing part. The part that will blow your head off is this: he has earned this amount without doing any substantial heavy lifting. Musk did most of the work years ago when he invested in PayPal, Tesla, SpaceX, and other companies.
Are you looking to become an investor too but don’t know how to get started? You’ve come to the right place.
In this article, we’re telling you how to start investing with the little amount of money you have right now.
Let’s make the money!
Cultivate an Investor’s Mindset
Do you know mindset is one of the biggest hindrances for most people looking to become investors?
Without an investor’s mindset, it’s difficult to get started investing. A person with an investor’s mindset is always looking for ways to accumulate wealth while a person without this mindset is always looking for ways to make money and spend it.
As such, the first step to becoming an investor is to cultivate an investor’s mindset. The big question is: how do you do this?
Developing a new mindset is much like developing a new habit. However, a lot depends on your inner drive. This is what will push you into looking for the information you need to become a savvy investor.
Find books written by (or about) some of today’s renowned investors. Learn how they started and try to emulate their ways. Watch investing and business shows on television. If you love listening to podcasts, fill up your list with investing podcasts.
Don’t expect to develop this mindset within a short time. It can take several months or even years before you truly start thinking like an investor. The secret is to keep at it, however long it takes.
Start Building Investment Capital
Your goal is to start investing on a budget. We haven’t lost sight of that.
However, there’s one fundamental principle in investing: you need capital.
This brings us to the question: how much investable money do you have right now?
If your idea of investing on a budget means getting started with 100 bucks, you’re on the wrong track. Sure, you can easily find people saying you can invest with as little as $100 or even less. This isn’t false.
But here’s what is likely to happen if you invest $100. Depending on the type of investment, you could lose the money, or it will take forever before you can reap any real returns.
We aren’t trying to discourage you. The point (and the hard truth) is you need a substantial amount of money to make an investment that will yield tangible returns. Any amount of $1000 is a good place to start. Most experts will tell you this.
The good news is it’s never too late to start building up your investment capital. If you’ve got $100 right now, put it into a savings account and build on it. If you can save consistently, you’ll have enough money to start investing before you know it.
Consider Various Investments
Now, you have the capital you need to start investing. Where do you invest?
Thousands of people in your position have lost their money because they made the wrong investments. Don’t be like these people.
You need to explore various options, their risk levels, ROI, and other variables before deciding when you should invest.
If you’re like most people, you’ll certainly invest in the stock market. After all, stocks are the go-to investment for more than 50 percent of Americans. And it’s easy to see why. A person who invested $10,000 when Amazon launched its IPO is today a millionaire.
You could start a business. A business might not sound like an investment, but it is. If you’re taking this path, ensure you’re offering a product or service that has good demand. In today's economy, starting a healthcare cleaning company makes a lot of sense.
You could go into real estate, but this largely depends on whether you have enough capital. Setting up a rental unit, for instance, can cost $200,000 or more. If you’re short on capital but still want to invest in real estate, look into REITs.
There are several investment options for you to choose from. If you’re unable to find a suitable one, you can seek the advice of an investment specialist.
Spread your investments around if possible so you don't put all of your eggs in one basket. Which brings us to our next point: portfolio diversification.
Diversify Your Portfolio
Alright, you have made your first investment.
What happens next?
If you haven’t developed an investor’s mindset yet, it’s easy to sit back and wait for your money to yield good returns. Don’t do this.
An investor always seeks to diversify their portfolio. If your first investment was in real estate, you should focus on making a second investment in the stock market. Or, you could make another investment in real estate.
Of course, you’re wondering where you’ll get the capital to diversify your portfolio. After all, your first investment is yet to make you money.
Well, go back to raising capital. Continue saving into your investment fund. After some time, you’ll have enough money to make another investment.
When you have multiple irons in the fire, you have more ways to make money and your risk is reduced.
How to Start Investing Made Simpler!
If you were to do a country-wide survey, most Americans would tell you that they’re wondering how to start investing. The reason? They don’t have enough money.
Well, it’s possible to start investing on a budget. With this guide, you now know how to invest like an expert.
Keep tabs on our blog for more tips and insights on investing. Visit the Finance, Investing, and Crypto sections on the Bootstrap Business Blog to learn more about how to start investing profitably and on any budget.
