You Can Start Investing Without a Lot of Money

Tips for investing without a lot of money.

Investing is a great way to save for your golden years. You might think that you need to have a big chunk of change to get started, but you don’t. Here are two great ways to start investing without a large amount of money.

Start With Retirement
Investing is a great tool to grow your retirement nest egg. So if you have a 401(k) through work, start there.

Determine Your Contributions. Dedicate whatever amount you can safely invest per month into that account. And if your employer matches your contributions, try to contribute enough to get the full match amount.

Open an IRA. If you don’t have a 401(k) at work or would like another way to save for retirement, open a Traditional IRA or Roth IRA. The main difference between the two is how the taxes work.

• Traditional IRA, you invest pretax dollars, and then you pay the taxes on withdrawals in retirement.
• Roth IRA, you invest after-tax dollars and then you don’t pay taxes on withdrawals during retirement.
  One thing to keep in mind: Find an IRA account that allows you a low or no-minimum starting point.

Help from Robots
Another way to get started investing when you don’t have a lot of cash is by using a robo-advisor. These are computer-generated investment tools that use algorithms to handle your funds.

You choose the following:

• How much money to invest.
• The investment strategy you’re comfortable with.
• The level of risk you want to take on.

Some robo-advisors charge a fee, but there are plenty that don’t. Do some research to find one that is free so you can grow your money easier.

Do One Thing: When starting with investing, find investment tools that are free or low-cost.

SavvyMoney/Chris O'Shea March 2025