Get Started in the Stock Market With Very Little Money! How to Make Choices That Will Pay Off Long-Term

Last Updated on May 31, 2021

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Getting started in the stock market can be extremely intimidating. Especially if you don’t have a lot of money. But with the right long-term strategy, you’ll see the numbers add up soon.

Starting From Scratch

You don’t need to have big bucks to make big bucks. Even if you are in your 20s or 30s it isn’t too early to invest in your future. $10,000 invested in the S&P 500 in 1970 would be worth over $1.2 million today. Starting small can reap massive rewards. 

Finding Your Flow

If all your excess cash is being thrown at Starbucks lattes or streaming services, there won’t be enough to invest. Practice putting a percentage of income each week into a safe place, either a digital savings account or a physical one like a shoebox, cookie jar, or safe. Starting small and wiggling your way up to a larger percentage will help you pave the way to huge returns.

This part may take some time to get used to, but by limiting expenses now, you may be able to live large in the near future. Consider putting away 10-30 percent of your income. Don’t worry. You won’t be investing all of it.

Trying Out Stocks

Luckily, there are plenty of ways to learn the stock market. Here are a couple of good places to educate yourself on the market:

Marketwatch is a great resource for stock market lingo. One of the best things about the website is that it offers a stock market game that allows players to compete without spending a dime. This is a fabulous way to start practicing!

The News is the best way to keep up to date on the volatile market. Find a reliable news source that you trust and check back each day to see what’s going on in the market. In just a few weeks, you’ll be spewing stock jargon in every conversation.

Setting Your Budget

Decide on your budget to make sure you don’t go stock hungry. Invest what you are willing to lose! Take a percentage from your “flow” and use that to invest on a weekly basis. Don’t jump in with all of your cash. This will help you stay sane for the long game. 

Figure out how you will invest in the market. From Robo-advisors that invest your money for you to investing apps, playing the stock market is easier than you think.

  • Robo-advisors like M1 Finance or Wealthfront are an easy way to invest in the market even if you have a busy schedule. After answering a few questions, the Robo-advisor will diversify your portfolio and utilize algorithms to rebalance them regularly. For a small fee, of course.
  • Investment Apps are available if you’re ready to take the dive yourself.
    • Public is an innovative social media experience that allows investors to see what others are doing and learn from them. If you’re new to trading or need a push to make your first purchase, this app is a great tool.
    • Robinhood is another good option, especially if you don’t want to be sitting by a ticket at all times. It’s a commission-free investing app that lets you buy stocks with the tap of a screen.
  • Mutual Funds might be the right choice if you’re an extremely hands-off investor. The money is pooled from multiple investors and invests in securities like stocks, bonds, and other assets. A money manager is the brains of the operation and does most of the work for you. Be aware: You’ll only be entitled to a proportion of the gains or losses of the funds, making it a smaller risk but a smaller reward.