Investing in stocks, bonds, index funds, real estate, and other assets is one of the best strategies for long-term wealth management. If you have a few decades to grow your investments, the power of compound interest can take even a marginal contribution and turn it into something that can fund your retirement.
Once you get the ball rolling, it’s not hard to preserve your momentum; even without ongoing contributions, your capital will continue to benefit from compound interest, and you’ll have more motivation to continue funding your account. But for many Americans, the hardest part is getting started; the average household has $137,063 of debt, and struggles to make ends meet with their current salary.
The good news is you don’t need much money to start investing—most brokerage platforms will let you start an account with as little as $500, and some will let you start trading with no minimum account balance. So what can you do to get to your first $500?
One option is to earn a one-time sum of $500, which you can treat as a bonus to start funding your investment account. These are some of your best options:
· Sell an old car. If you have an old car that’s doing little more than gathering dust, it may be time to junk it. You can get at least a few hundred dollars for the scrap materials your car is made of alone. If your car is newer, you can trade it in for a less expensive used model, and pocket the difference.
· Offload furniture. If you have old furniture taking up space in the house, you can declutter your home and make some extra cash at the same time. As long as it’s in good condition, you can sell a bookcase or dining table for $100 or more.
· Get rid of an old collection. Go through your possessions and see if there’s a collection you wouldn’t mind getting rid of. You might have gone through a phase where you collected coins, stamps, or trading cards; one rare find in this collection could finance your new investments, or you could sell the whole lot for an even higher value.
· Have a garage sale. If you have lots of miscellaneous items throughout the house, you can hold a garage sale to get rid of all of them simultaneously. Depending on how much you plan the sale in advance and what types of items you have to offer, you could easily make up to $1,000.
· Find an odd job to do. Look around for odd jobs that need done. You could volunteer your services in the community, offering to mow lawns, paint houses, or clean cars for $50 here and there. You could get involved with ridesharing for a week, with Uber or Lyft, and make $100 or more each time you go out. You could even ask your friends and family members if there are any projects you can help them with.
· Make and sell crafts. If you’re creative or ingenious, you could make art or build things to sell online, through a platform like Etsy. Cross-stitching, knitting, and woodwork could all help you make a few hundred dollars in a short amount of time.
Building to $500 (and Ongoing Contributions)
Alternatively, you could cut items from your budget or establish a source of recurring revenue, so you can make a little money each month and eventually get to $500. You can also use these strategies to scrounge up the money to continue contributing to your account:
· Reduce or offset your housing costs. Your home is probably your biggest recurring budget item, so consider reducing your costs. You could move somewhere smaller, or offset your costs with Airbnb or renting a room to a long-term tenant.
· Improve your earning potential. You could also invest in yourself, learning a new skill or seeking a promotion that can earn you hundreds of extra dollars per month.
· Start a spare-change fund. Keep track of the spare change from all your purchases, and set it aside for investing. You can even use an app—Acorns—to do this for you.
· Cut unnecessary budget items. Finally, you can go through your budget and cut or reduce any unnecessary expenses, like subscriptions to services you no longer use.
Once you have that initial $500, you’ll be able to open an account almost anywhere and make your first trade. Since you won’t have much money to distribute among multiple company stocks yourself, you may want to start with an ETF that gives you exposure to a variety of different companies (or industries). The more you learn, and the more you contribute, the easier your investment decisions will seem.