How to Start Investing Even if You Have Limited Funds: 5 Alternative Investments
Do you think you need to have a lot of money before you can start investing? We’re here to tell you that waiting to invest could be a big mistake, and the truth is, you don’t have to. There are investment opportunities available to you right now. Start where you are and grow your investments steadily with low-risk ventures that provide reasonable returns. Read on for some ideas on how you can get started with building your investment portfolio today.
- Become a Silent Partnership in a Small Business
If you’re not quite ready to start your own business but you have some money you’d like to invest, why not partner with other entrepreneurs who might be struggling with insufficient funding? Just be sure that any business venture you invest in is based on a sound idea and has the potential to grow.
Even better, diversify by seeking out several such ventures, especially those which have already proven themselves in the marketplace to a certain extent. Your funding could give a worthy new business enterprise the opportunity to grow to the next level, and you could benefit as well.
- Get Involved with Real Estate Crowdfunding
Many people have discovered that the best way to succeed in real estate investing is by pooling resources and investing as a group. These days, it’s easier than ever to get started investing in real estate, thanks to online crowdfunding platforms. Another way to go about it is by networking within your community or on social media. Find others like you who want to pool their money in order to participate in a larger investment opportunity than any one of you could do on his or her own.
Real estate lends itself to crowdfunding because it’s a tangible asset. Further, real estate crowdfunding is easy, requires low investments, and provides large returns within a relatively short time. Get started now with real estate crowdfunding, and you could eventually own a good-sized real estate portfolio.
- Trade on the Stock Exchange
You don’t need millions to invest in the stock market. There is no minimum number of shares to you need to purchase, and most of the time there are few or no investment requirements. Some well known public companies trade their shares at a price that is quite affordable, and there are even some high flying stocks that are reasonably priced because they have undergone splitting several times.
If you choose to invest in the stock market, be sure to conduct thorough research before you start buying or selling. Look at the profit and loss statements of the companies you’re considering investing in, and read what analysts are saying about them. Start early, be smart about it, and you could end up owning large stakes in several different corporations within a few years.
- Invest in Government Securities
Government securities are low-risk investments, where you can be relatively certain that you will not lose your capital. The challenge lies in the fact that they come with very low interest rates. You may not get rich by investing in government securities, but your money will be lot safer.
Some of the government securities you could invest in include bills, notes, bonds, and inflation-protected securities.
- Bills are good for short-term investments because they mature within a short time, typically a year.
- Notes might be the right instrument for you if you prefer a medium-term investment, as a note attains maturity in 2 to 10 years.
- Bonds would be a good investment for you if you are willing to invest your money for the long haul, as bonds take 10 to 30 years to mature.
- In the U.S., Treasury Inflation Protected Securities, or TIPS, are a good option for many investors because the government not only pays interest but also increases the principal value of your investment based on the Consumer Price Index.
- Consider Peer-to-Peer Lending
Peer-to-peer lending benefits both the investor and the borrower by eliminating the middleman—the banker. Offering the possibility of high returns, it is also a high-risk investment. How it works is that you charge the borrower a low fee in return for the potential of higher returns from your investment.
In order to mitigate your risk, invest small amounts with several individuals. In this way, you will maintain a high quality portfolio even if one or two loans are not performing. Begin with a small investment and plan on growing your investment base from there. Keep in mind that peer-to-peer lending is illegal in some jurisdictions, so check the local laws where you live before you invest in this way.