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Ten tips to find money for investment

Updated on June 24, 2007

Investing is wise and most people would agree that they need to invest. However, the problem normally is how to find money to invest in the first place. It seems that the more we try to save the more commitments we have to spend.

It is always necessary to think about ways of saving money to invest once we determine that we want to become financially independent. In this article I give ten tips to help finding money to invest.

1. Save change for an investment account

You make hundreds of purchases every month. Each purchase has some change, which we normally ignore as unimportant, and even throw away. However, you don't need to be a math whiz to see that the pocket change can be an important source for your investment needs. If you buy 100 items, and each purchase has a change of 50 cents on average, if you add all changes you will have 50 dollars.

Notice, however, that this is money that you can have access every month. In other words, it is not only $50 now, but $50 every month, which is $600 per year, or $6,000 in ten years. However, it gets better: if you invest this money and get 5% interest, in ten years this becomes $7,764, and over a period of 30 years it is more than $41 thousand dollars -- not bad for pocket money.

2. Use a jar to keep money for future investment

This tip complements the previous one. The main problem of keeping the pocket change is that you it is so small, we end up forgetting about it and it never ends up as part of our savings. A way to avoid this is using a money jar, where you are supposed to keep all change that comes to your pocket.

An easy way to implement this is to have a jar close to the place where you put your keys. Everyday, as soon as you arrive home, you put you change into the jar at the same time that you take off you wallet and your keys. It is a sure way to store these cents that will later fund your investment account.

3. Keep a log of how you are spending money

A big problem when we start investing is that we don't know exactly how much we can save. The main reason for this is that we simply have no accountability of how we spend money. We don't know how much can be saved in groceries, or clothing, for example, and this makes it harder to determine how much money we can save.

A first step in is to use a simple log of your expenses. Don't try to do everything at once, since this can discourage you if you cannot have a perfect system immediately. Start by writing down (in a notebook or in a computer) how much you have spent in each major purchase. This will give you an indication of where you are spending more money, and what can be removed from your monthly expenses without a negative impact in the household.

4. Create a new small business on the side

The best way to get money is to make money. If you have a business, you can always try to increase your profit so that you have more to save and invest.

If you are employed, however, you need to find some way to make additional money. One way you can do this is starting a business that is closely related to you hobbies or personal interests. In this way, you are doing something you enjoy and at the same time expanding your investment possibilities.

5. Cut something from your daily spending

When we are still not used to log expenses, it is frequent the case that we end up buying things we don't need. For example, it might be that we end up buying more food than necessary or cloths that we don't need.

This is, however, an opportunity for those who want to save. Locate these items that could very well be cut from your daily expenses. Maybe you don't need to have two coffees, and one would be enough. When you locate these opportunities you can save massive amounts of money as you reduce you expenses every day.

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    • Rusty Green profile image

      Rusty Green 

      10 years ago

      Not sure if you realize this, but your title states, Ten tips to find money for investment. The hub lists only five. At first I thought it was me (very tired), so I kept scrolling up and down until my mind caught up with my eyes. :)

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