5 Investing Hacks for Beginners

5 Investing Hacks for Beginners Leave a comment
investing hacks

When we think of investing, we picture a rich man in a tailored suit on Wall Street. But you don’t have to be anywhere close to rich to become an investor. In fact, there’s no reason you can’t start investing right now! It’s not about how much money you have. It’s about how smart you are with it. So in this article, I’ll give you some investing hacks to show you how you can start investing with less than $100!

#1 Give Up One Thing

If one of your excuses for not investing is that you don’t have the money for it, then you are wrong. Think about how you spend your money. Now write down a list of things that you buy every day or on a regular basis that you could probably live without.

If you’re drinking Starbucks each morning, why not make your coffee at home and bring it with you in a thermos? If you buy name brand cereal, why not switch to a generic brand?

There’s a pretty good chance that there is something you spend money on that you don’t actually need. Find at least one thing on that list that you are willing to part with. Now, calculate how much money you normally spend on it. Then, put that money into saving toward your first $100 for investing.

#2 Get a Micro Investing App

Today, you can find some apps that will help you invest using the age old logic of “every penny counts.” Basically, a micro investing app is one that links to your bank account and invests your change.

In other words, when you go buy a cup of coffee for $4.75, the app will round that up to $5 and put that 25 cents into your investment portfolio. 25 cents doesn’t sound like a lot but it adds up. Each time you use your debit card, this app will round the charge up to the nearest dollar and put that extra change into your portfolio.

investing hacks

This is a great option for people who are struggling to get into the habit of investing. If you’re finding it hard to put any money aside for it, this is one of those investing hacks that will make it an effortless process.

#3 Buy Partial Shares & Penny Stocks

This is the most common way that a micro investing app will work. Rather than buying a whole share of stock, you are essentially pooling your money with other investors like you. So you are buying a portion of the stock. Overtime, those portions will add up to full shares.

This is a great way to break into the market and have access to larger, more stable stocks that you otherwise wouldn’t be able to buy unless you had more money to invest right off the bat.

Penny stocks are different. These are brand new stocks from smaller companies. They cost less than $5 per share and don’t trade on the major stock exchanges. This makes them more affordable for a beginning investor.

The biggest advantage of a penny stock is that it has a lot of room to grow. You’re buying early on in a company’s existence so if the company takes off, the stock will grow rapidly and grow a lot so you stand to get a huge return out of your investment.

But the operative word there is “if.” Penny stocks carry pretty high risk for the same reason. New companies don’t usually have the resources to survive the setbacks or challenges that exist in the market. So a big enough problem could knock them down entirely.

Partial shares and penny stocks still operate on the same general principles of capital gains and capital losses. Both of these outcomes—profit and loss—carry their own set of tax implications. Capital gains are usually taxed at 15% or 20% depending on which tax bracket you fall into. There are online tax bracket calculators available that can assist you further.

So with investing hacks like this one, you need to be very smart and prepared to pay close attention to your portfolio.

#4 Create a Basic Investment Strategy

Financial experts can charge an arm and a leg for their advice. And giving your money to a broker is not really an option when you’re starting with just $100. Fortunately, experts and brokers don’t have a monopoly on smart investing decisions anymore. You can find a lot of great information online.

And there are even some sources that will help you understand what kind of investments you should be making based on the key details of your financial situation. Use the free and helpful features of websites and apps like these in order to get a handle on your current situation and how you should be investing for your future.

#5 Automate Your Savings & Investments

Taking charge of your financial situation isn’t always easy. If you’re used to just spending until you have no money to spend anymore, it can seem all but impossible to start saving. The other investment hacks you have read about will all help you become more conscious about your spending.

But at this stage, it’s also important to work around your lack of habit as much as possible. Micro investing apps are one great way to do that. But to complement that approach, you should also start putting money into your savings each month.

It doesn’t have to be a major chunk of your income. It could be something like $25 each month. If you apply the right savings strategies, you can actually free up a lot of cash from your budget to put toward savings.

After a full year of small contributions to your savings, you’ll have a nice chunk of money that you can invest. And if you’ve already been micro investing in this time, you’ll already have a nice portfolio to put it into!

A Final Word on Investing Hacks

Using investing hacks like these, you can finally break into the world of high finance. But more importantly, you will finally be able to switch from working for your money to making your money work for you! It doesn’t matter if you start with $100 or $100,000. It just matters that you get started and that you get started right now!

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