May 8th, 2020
During what may be one of the most turbulent economic times we’ve had in recent history,
you’re probably not thinking of investing in the stock market right now, or investing at all, for that
matter. These are hard times and our priorities are shifting based on basic human needs. But
that doesn’t mean we can’t think about the future, and come out of this crisis even smarter and
stronger than before.
Maybe now that we’re all stuck inside we’re spending and consuming less. Think about ways
you can add to your emergency fund (maybe you’re using your emergency fund right now). Find
ways to put away money you’re saving and think about building a better financial future for
yourself. With all of this extra time on your hands, now is the perfect time to learn a new skill, or
even learn about investing!
Investing is as simple as $20 a month on a smartphone app or a complex portfolio or real estate
investment. You don’t need to be the ‘Wolf of Wall Street’ to be an investor. We’re here to talk
about investing with a small amount, and how that can grow over time through compound
Let’s start small - if you get a coffee out five times a week at $5/cup, that’s $100/month on
coffee! If we turn that $100 monthly coffee fund into an investment, it's almost guaranteed to
have a higher return than your coffee intake. A lot of people panic that they don’t have the
money to invest. But even if you don’t have a lot, you can take money from somewhere, like
your coffee habit, and turn it into something valuable. There just has to be a little bit of
compromise. Once you start investing your money and see the return it gets you, it becomes
gamified, and dare we say, fun? Let’s take a look at a few ways you can turn that $100 into
1. Robo-advisors and apps
Taking your investment digital is so 2020. When there’s an app for everything, why not treat
investing the same way? Robo-advising and apps like RobinHood, Wealthfront, and Betterment
are all great options that make investing simple and accessible. And featuring great UX/UI
design, they feel like a trendy app. No investment experience is necessary as their automated
algorithms crunch the numbers for you, and help you build the best investment plan based on a
few basic parameters that you set with low or no fees at all.
2. Real estate
Yes, you read that right. You can be a real estate investor without purchasing a property
outright. While real estate investment in the form of homeownership or income property is
#goals, there are other ways to dabble in real estate if you don’t have thousands of dollars to
drop. A website called Fundrise lets you invest as little as $500 to become an investor in a
diversified portfolio of properties. You get quarterly dividends and earn a return via the
appreciation of the property, just like a stock or any piece of real estate.
3. Mutual funds
Now we’re getting into the more traditional idea of “investing”. Mutual funds are a great way to
dip your toe into stock investing because they spread your money across a variety of stocks
instead of putting all of your eggs in one basket. Think the S&P 500 - a stock market index that
tracks the stocks of 500 large-cap U.S. companies. If you set up auto-payments to invest, you
can oftentimes get away with having a lower monthly investment ($50 - $100) versus the
sometimes minimum investment requirement of $500 for many mutual index funds.
Bonds come in the form of corporate, municipal, or treasury, and are a surefire and safe way to
invest. Bonds probably won’t get you rich, but they will yield some return over time. Bonds
finance new companies, local projects and even the U.S. Government with investor dollars.
Worthy Bonds are a fun, meaningful way to invest in bonds if you want to go a different route.
Worthy Bonds are used to fund American businesses, and Worthy is generally pretty picky with
their candidates. They only invest in companies whose liquid assets greatly exceed the loan
amount, so your investment is lower risk. But, remember, any investment, especially a company
stock, is a risk. The great thing about Worthy Bonds is that they’re $10 each and offer a fixed
return rate of 5%. You can buy as many Worthy Bonds as you like, kind of like collecting cards.
Gotta catch ‘em all!
5. Employer retirement plan
If you’re really on a tight budget, and the thought of setting aside $100/month to invest is too
much, make sure you’re enrolled in your employer’s retirement plan. Even if you invest 1% of
your salary into your retirement plan, you probably won’t even notice it’s gone and, if your
company does employer matching, you’ll double up. Plan on increasing your contribution every
six months, or annually, by one percent.
Blooom is a great tool if you need assistance navigating your employer retirement plan. They’ll
do a free analysis of your 401(k) and tell you how to optimize your investments.
Investing doesn’t have to be big… or scary. It’s exactly what you make it, and oftentimes, you
see the return multiply in front of you and it starts to feel like a fun game. Think about how much
you’re comfortable setting aside and start there. Then take a look at some of the options
outlined above to get the ball rolling! You can always add more funds each month, try multiple
types of investing, and you may even discover you have a knack for it. Soon enough, you’ll have
a good sum of money saved up that will taste a lot better than that fancy latte.