As a mom who wants to invest in the stock market, you may not have thousands of dollars on standby due to your responsibilities. As a result of this, you may not have started investing yet, or get to the point where you have diversified your stock portfolios. Before we go further, it’s important to note that you aren’t alone. Fortunately, there are several things you can do when it comes to starting and growing your investment portfolio while on a budget.
1) Start Investing Immediately – Consider Fractional Shares
Based on what we see in Hollywood as far as the American stock exchange, many people falsely assume that you need to have a certain amount of money to invest in the stock market. As such, it’s easy to talk yourself out of investing until you pass the X threshold or have X saved up. But the reality is that even a few dollars can go far.
Most financial experts would agree that if you have been sticking to putting your money in a savings account so that it can acquire interest, you may as well use that amount to invest in stocks as it helps you save for the future. While it may take time to see that small return, it will be worth it in the long run.
It’s also worth noting that when people see a share going for a certain price, they assume they have to buy the entire share, such as Netflix which goes for over $500 per share. But in a situation like this, if you did not have the funds to buy an entire share for a company, you can get fractional shares instead. In fact, if you only have $500 to invest, you would be better off diversifying your portfolio by getting multiple fractional shares in $100 increments as opposed to spending your entire amount on one share.
2) Company Sponsored Retirement Account
Most retirees would agree, it’s never too early to start preparing for retirement. One of the ways you can prepare for retirement is to invest funds into a retirement account. Depending on which company you work for, they may have their own company-sponsored retirement account such as a 401(k) or 403(b). Financial experts highly recommend that employees should contribute to a retirement account on a yearly basis, especially if said company matches personal contributions. In the event that your company doesn’t provide a retirement account, you should consider getting an individual retirement account known as an (IRA).
3) Consider Day Trading
It goes without saying that day-trading comes with its own sets of risks that are worth considering. However, if you gather knowledge into how the market works, you can make a decent amount of money. Back before the advent of investment apps, one would have to maintain capital of at least $25,000 as a professional day trader, according to statistics gathered by the FINRA. However, certain apps such as Robinhood, remove this barrier and is regarded by experts as being a perfect tool for newbie day traders.
By using investment apps like Robinhood, you can easily research stock options and initiate trades with a few taps. In addition to that, you can build a diversified portfolio if you choose to invest in fractional shares.
4) Invest Into One Single Stock
Back in the days, stockbrokers would charge incredibly high commissions for the sale or purchase of shares. As such, it used to be extremely cost-prohibitive for anyone to invest in a single stock. However, nowadays the concept of “zero commissions” has taken the industry by storm, which makes it easier than ever to get a single stock through zero commission brokers such as Fidelity, You Invest, Robinhood, and E*TRADE.
5) Invest In REITs
REITs stand for Real Estate Investment Trust which is essentially a company that owns and operates income-producing properties. REITs operate like stocks in the sense that you can acquire them on stock exchanges via a brokerage firm. It is one of the few ways in which a newbie investor can put little cash down to acquire a stake in the real estate market. In addition to that, you can sell and buy shares without worrying about buying or selling property.