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Secrets to Grow Your Wealth Safely With Small Investments

Updated on February 22, 2019
L.M. Hosler profile image

Linda has had a self education in money management. She has always had to do things to stretch the budget such as second jobs

The American Dream


Looking At Your Finances

For many of us, we live each day wondering if we will survive till the next payday. How on earth could we possibly be able to save even the smallest amount of money? Yes, it is very hard, but it's not impossible to do. Making the decision to get started is the first and hardest part.

First, take a good serious look at your finances. Are you making enough to cover your basic expenses? Do you have a budget or some sort of spending plan? Start keeping track of everything you spend to see where you might be able to cut back on expenses that are not necessary. Save all your receipts so you will have a clear picture of where your money is going. Now what can you do without? Do you need that expensive Starbucks coffee, can you cook more and eat out less? Can you clip coupons or buy brand generic brands and buy on sale to save on the groceries? Are you able to car pool with other workers to save money on gas. Can you watch movies at home instead of going out to the theater? There really are some ways that you can cut expenses. Consider how much you spend on entertainment because this is an area that can be slashed first.

One area you should pay special attention to is debt. Debt is like a noose around your neck and will keep you from your long term savings goals. Do you use credit cards? If so it is time to get rid of them and if you have credit cards with balances, your first priority is to get those paid off and cancel the cards. Interest rates are very high on credit cards so make a plan to pay off these debts as quickly as possible then use the money you free up to invest.

Now can you find ways to increase your income? Overtime or a part time job are just a few possibilities. There are many ways to increase your earnings if you are willing to do so. Even making a few extra dollars will help you get started saving and investing.

Now, hopefully you have found a few ways to cut expenses and also increase your income so that you can begin to start saving at least a small amount of money every week.

Guide to Learning About Dealing With Your Finances

Learn how to deal with debt, savings and investing. This book teaches how to reach your financial goals.
Learn how to deal with debt, savings and investing. This book teaches how to reach your financial goals. | Source

Display of wealth

Three money tiers
Three money tiers | Source

Where To Start Saving

Now it is time to start a savings program. But how and where do you start? Start with your local bank and check their interest rates and requirements to start a savings account. Now, right now savings accounts are paying almost no interest but your goal is to save enough to be able to move your money into something that pays better interest. You actually should have a savings account with just enough money to carry you over emergencies . Another choice that pays a little more interest is to buy savings bonds. These can be bought for as little as twenty five dollars. When held to its maturity date, the bond will have increased in value. These are areas to begin savings until you have enough money to invest elsewhere.

The Work Savings Plan

If your company has a 401K saving plan this is something you need to take advantage of. Most plans allow you to have a small amount taken from your pay every payday and the company will also put money in your account. Some companies will match what you contribute while others may put less in than you do. Either way, you are getting a little more money from your company. For example, a company may let you put up to 4% of your pay in an IRA account and the company will match that 4%. So let's say your pay before taxes is $450. At 4% you will contribute $18 and the company will also put $18 in your account. At the end of the year your account should be somewhere around $1700 or more. That is for only one year and this adds up very quickly with you only investing a small amount of money regularly.

Your money will continue to grow as you contribute more, but you will also reap the benefits of added dividends, interest, and capital gains to your account. Something almost magical happens, called compounding. Now you are earning interest on the interest which is definitely a winning situation for you.

Savings Bond

Other Ideas To Invest Small Amounts

If you have managed to save enough money in a savings account and you have your 401K plan set up then it may be time to do some research on some other ways of investing your money. Some of these ways include mutual funds or investing directly with major companies. Here are just two ideas of ways you can invest money in small amounts.

  1. Invest small amounts of money directly into companies without having to pay broker fees. Most of these companies will allow you to buy one share and then they will let you invest as little as $10 or $25 a month. As your shares in the company grow, you will receive dividends which will then be reinvested and will earn more money for you. These programs are known as DRIPS, dividend reinvestment plans. You can find information on DRIP programs at sites such as Money Paper and Direct Investing.
  2. Mutual funds are another good place to invest small amounts of money on your own. Do some research and find mutual funds which will allow you to make some monthly investments.

I can't stress enough that you research carefully on any of these options.With any type of investing, you should make sure you study carefully because investing your hard earned money can be risky. Be sure your investments are safe investments and look for a good financial adviser. Many local banks will offer a financial adviser with no charges. There are also many websites and books available that will help you learn good places to invest your money.

Smart Money Guide

Smart Money: A Beginner's Guide to Investing and Personal Finance (Book 1) (Volume 1)
Smart Money: A Beginner's Guide to Investing and Personal Finance (Book 1) (Volume 1)

This is a good book for those without a lot of money to invest. It covers credit card and debt management. It also is easy to understand for the average person like me. General overview of getting started with investing and financial terms. The book is quite interesting.


Invest Directly In Companies

This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.

© 2016 L.M. Hosler


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    Post Comment
    • L.M. Hosler profile imageAUTHOR

      L.M. Hosler 

      31 hours ago

      Gupi Thanks for the comment. I hope you found some useful information in the article. These tips really do work.

    • Gurpinder Vir Singh Rai profile image


      43 hours ago

      Thanks for sharing this very useful information about making small investments and starting out in the world of investments.

    • L.M. Hosler profile imageAUTHOR

      L.M. Hosler 

      3 years ago

      I wish I could have done that when I was younger. Maybe I should write an article about how making bad choices in life will affect you when you retire. Now there is an idea.

      I am glad thought that it is working for you. You won't regret it.

    • caseymel profile image

      Melanie Casey 

      3 years ago from Indiana

      Great advice! I started putting away money for retirement young. I still put money away. When money is tight, I just put in the bare minimum, but at least it is something.


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