One of the most common investing misconceptions in the past was that investing requires a large sum of money. That, however, is just no longer the case. Start establishing a portfolio and building your wealth even if you don’t have a lot of money to invest. 

Investing is the act of dedicating a resource (time, money, effort) to attain an increase of value over time (profit).

The days of needing thousands of dollars to invest in investment ideas are long gone. You may now invest with just a few dollars thanks to a stream of innovative developments within the financial sector, from robo-advisory solutions and low-cost mutual funds to high-yield savings accounts, savvy Halal investment options relevant in countries like Malaysia, and many other options.

It’s perfectly acceptable to begin investing small. When you’re consistent, you might be amazed at how much money you can make over time. The sooner you begin, the longer your money will stay in the market, and the more compounding gains will benefit you. While you’ll most likely need to increase your investment amount in the future, getting into the habit of investing what you can now is beneficial. Make investing a priority, even if it’s only a modest amount, and you’ll be more inclined to keep investing when your financial situation improves.

Here are a few handy tips for investing on a tight budget.

#1. Try the Cookie Jar Approach

Saving and investing money are inextricably linked. Before you can invest, you must first save money. It’ll take a lot less time than you expect, and you can do it in little chunks.

If you’ve never saved before, start small by putting aside RM10 per week. That may not seem like much, but it adds up to more than RM500 over a year.

Put your weekly RM10 in an envelope, a shoebox, a small safe, or even the cookie jar (the mythical bank of last resort). Even though it may appear childish to save these small amounts, it is frequently a vital first step. Make it a habit to live on a little less than you earn and save the difference in a safe place.

A separate savings account from your primary savings account, can act as your technological version of the cookie jar. When your hoard has grown large enough, you can withdraw it and put it in legitimate investments.

#2. Begin Investing in Stocks with a Small Amount

The cost of admission into the stock market is sometimes a stumbling obstacle for new investors. Isn’t it true that making money demands money? Not any longer!

Thanks to the internet, consumers may now get started with relatively little money up front. That means you can start small to gain a feel for investing before committing to a larger investment. It’s a fantastic way to learn about investing while just putting a little sum of money at risk.

Today, there is an expanding number of options available, allowing a new generation of investors to enter the market. Furthermore, the opportunity to invest in companies that have fractional/partial shares is a game-changer in terms of investment. You may vary your portfolio even further while saving money with fractional shares. You can purchase a fraction of a share rather than a full share.

#3. Dive into the Real Estate Market

Believe it or not, you don’t need a great deal of money (or even good credit) to invest in real estate these days.

Real estate crowdfunding is a new type of investment that allows you to purchase fractional shares of large commercial buildings without the hassle of being a landlord.

Unlike Robo-advisors, crowdfunded real estate investments have a higher minimum investment requirement. They’re also riskier investments because you’ll be investing your entire RM5,000 in one property rather than a diversified portfolio of hundreds of smaller assets. The benefit of owning a piece of a real physical asset that isn’t tied with the stock market is appealing.

#4. Automate Investing with Betterment

There are a variety of robo-advisers or online investment platforms, that provide expert portfolio management for a modest price. You begin by filling out an online questionnaire to help the site estimate your risk tolerance. A portfolio is built for you based on that judgment, with an allocation that comprises many different exchange-traded funds (ETF). Because of this allocation, your sole obligation is to fund your account; you won’t have to worry about investment selection or rebalancing your portfolio.

 

#5. Crowdfunding or P2P Lending

Both options involve obtaining funds online from a group of people, or investors. The most important distinction between crowdfunding and peer-to-peer lending, also known as marketplace lending, is how you repay your investors.

Learn more about crowdfunding and P2p lending from our article here. We also cover Islamic crowdfunding platforms in this article.

#6. Your Own Business

Starting your own business could be the most successful investment opportunity of all if you just have a few hundred ringgit to invest. Many entrepreneurs begin by taking up a part-time job or a side hustle to supplement their income while building their business.

A decent lawnmower can be purchased for a few hundred ringgit and used to create cash by cutting lawns, for example. With just a few hundred bucks, you might have more than RM5,000 in your bank account in no time. You might also create a website that is only dedicated to selling a specific product line. Alternatively, you might build a blog and use it to set up affiliate sales agreements.

Not forgetting that the profit you get from your business, you can then roll into investing into other options.

#7. Don’t Forget to Increase Your Contributions

While it’s possible to start with little amounts of money, if you want to expand your portfolio in a way that matches your objectives, you’ll need to raise your contributions.

Continue saving aside more money in the future in and continue investing regularly. You’ll see your portfolio expand and you may even be even more motivated to save more!

Conclusion

With so many investment options available today, it’s no longer true that you need tens of thousands of ringgit to be an investor. From as little as RM10 a week, you can quickly gain enough money to begin investing.

 

How did you begin your investment journey? Share your stories with us in the comments. 

 

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