If you have less than £500 but you are still looking for a great investment opportunity, it’s important that you know what some of your choices are. There are a lot of different investments that you can make, but not all of them are going to provide you with the kind of return or level of risk that you want.
DRIPs or DRPs
A DRIP or DRP, also known as a dividend reinvestment plan, is a small investment option that will provide you with the chance to purchase stocks directly from companies without having to use a broker. These programs will allow you to participate if you can afford to purchase at least a single share. DRIPs can be potentially lucrative, so you will therefore want to take the time to look into them before making a final decision.
There is dollar-cost averaging, which allows you to invest a specific dollar amount on a monthly basis. When you invest your money regularly, you will essentially be buying during all points of the market, both when it’s up and down. You will get more representative return over time, which means that the average cost per share represents the prices when it’s a bull market, the lower prices when it’s a bear market.
Those who want to invest but don’t have a ton of money to do so will find that investing in individual stocks might just be the way to go. Loyal3 will allow you to purchase fractional shares from your choice of over 70 different companies. Regardless of the price of the shares, you will be able to purchase as little as £10 of stock in major companies like Virgin America and AMC. It is very important that you take the time to look into some of your stock options so you can make the right investment choices.
While it’s true that there are a lot of mutual funds that have a minimum investment amount in the thousands of dollars, there are many other mutual funds that you can get in on for £500 or less. Performing a quick search through Morningstar’s mutual fund screener came up with 200 unique funds that you could invest in with just £500.
If you are looking for an investment opportunity that is even a little bit smaller, there are still hundreds of mutual funds from TD Ameritrade that only require a minimum of £100 to invest. It is important that you keep this investment opportunity in mind, as it could be the right one for you. The fact is that mutual funds are a great investment option for those who are just getting started.
You will find that exchange-traded funds can also be a great investment option for those who are looking to make a relatively small investment. ETFs are similar to mutual funds in that they have a collection of various investments. Part of what makes ETFs unique is that they are traded like common stocks on a stock exchange, and they don’t cost very much to get in on at all.
You can purchase an ETF for the cost of just one share, which makes it a great opportunity if you are looking for an investment but don’t want to spend a ton of money. If you are able to invest for the long haul and put up with the rollercoaster, this is definitely an opportunity that you should think about.
Start your own Business
One of the best investments that you can make is starting your own business. Whether or not it’s a good investment will of course depend on the type of business you plan on starting and how you run it, but there is a lot of potential. Even those who don’t have the £500 to start a business can start smaller with less; you just have to get creative. In the end you might just be glad that you decided to do this because of how lucrative it can be. You will be your own boss and make your own hours, so you won’t have to answer to anyone anymore. A lot of people love running their own business, but it’s a lot of work.