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6 Investing Tips for Beginners With Little Money

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                6 Investing Tips for Beginners With Little Money

So you want to start investing and make some money, but you’re new to the game and don’t think you have enough cash on hand.

Think again — there are plenty of ways to begin investing even with little money!

It takes some homework and research, but you’ll find the process becomes fun and attractive as you realize how simple it is to start making financial gains you can turn into larger investments later.

Here are six ways for beginners to take that little bit of money they have and get on the road to making a fortune:

Starting small — Online apps such as Stash allow investing for as low as $5. You have several funds to choose from with a diversified mix of stocks and bonds, CNN Money notes. Sites such as Betterment provide advice on how to invest, based on your age, income, and goals.
Bank investing — There are no initial account deposit requirements, so you have an easier time building up savings. Investments include money market accounts and certificates of deposit, according to Good Financial Cents. The money won’t grow as fast as higher-risk investments, but it’s a good way to start and begin making money.
Employer sponsored plans — Retirement plans at work, such as a 401(k), allow employees to put a certain amount of their paycheck toward investments. Payroll deductions can be as low as 1 percent or as high as 20 percent or more, depending on the rules of the plan. Your savings increase when employers also contribute to the plan.
Individual accounts — A traditional IRA allows tax-deferred contributions so your money grows significantly through the years. At age 59 ½ or later, you withdraw money that is taxed, but most people are in a lower tax bracket during the retirement years, Money Under 30 explains. With a Roth IRA, contributions are after-tax and withdrawals are tax free during retirement.
Mutual funds — Mutual funds or exchange-traded funds, known as ETFs, are often part of retirement plans, or you can invest in them on your own. The wide range of diversified stocks and bonds provide safe investing. You pay only one commission, instead of paying on trades of different stocks, or no commission when directly purchased from a fund company.
Stocks — New investors may want to get into the stock market directly. It’s usually best to invest in established companies like Microsoft or General Electric, Investopedia suggests. These blue-chip stocks are regulated by the SEC on exchanges. However, there is still an element of risk with even the best stocks.

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