How To Get Began Investing When You Do not Have A lot Cash

Many new investors fear they will make a mistake and fear that they will not have enough money to start buying stocks. But you can buy your first stock without having a lot of capital, and one way to get started is by looking for companies that have brands that you know and love.

In this Motley Fool live video recorded on July 23rd, editor Desiree Jones interviews Wealth noir Founder Damien Peters on everything investors should know to get started buying stocks even if you don’t have a lot of cash to spare.

Desiree Jones: I’m just learning about investing and I’m talking about money. When I was growing up, my parents didn’t tell me about investing. I have to learn to invest myself so I’m happy to be a part of The Fool because I can learn and grow. Talking about money in the black community is very important, right now during the pandemic. I will try to stay with you. I am still new. I’m new to investing and honestly personally I don’t think I can afford to invest because I’m working on my personal finances and all that, so let’s talk about some budgeting practices, do you think? can help when it comes to money.

Damien Peters: Ironically, I always tell people outside of the budget to make more money. This can be as simple as asking for a raise or getting very smart about your own compensation and whether or not you should change jobs. But a big way I’ve built money and we often talk about a job at the company being bad or holding you back, but the truth is that it funded much of my ability to build wealth. I was focused on my career and I was able to do that. But besides, I always had more than one job. I always had a sideline. I always built something on the side. Besides the wealth where I work, I have two other jobs that I work in so making more money, there are a lot of opportunities out there and people should be comfortable using these tools and skills and what they are used to Have available to increase the income they make. Some of the other things are things that you will hear all the time from anyone who talks about personal finance. Spend less than you make. Save and increase your savings rate. One thing I would tell you is that you feel like I can’t afford to save, but even if you started at $ 1 a month, something very, very small, the point is that You expand your knowledge. It increases the attention you are paying there, and if you are comfortable investing more money, you are not trying to figure out what to do with that $ 10,000. They’ll say, “Oh, great. I worked $ 1 a month, then $ 10 a month,” whatever it is. Enter the market, start investing and growing, and I always tell people, either start with what you know or just start with something really boring. Invest in the entire US stock market with a ticker symbol and there are great sources out there like The Fool that will really help you with the due diligence and some info on specific companies that you may not have considered or a location that you may not have thought of. Life in your circumstances is included. It’s very, very easy to make $ 500,000 and spend $ 550,000. Lifestyle creep is very persistent. It was something I worked on a lot in my life between 2012 and 2015. So by the time I graduated from high school and worked at Facebook, my income had quadrupled over the year along with my wife’s, but we were still living on roughly the same budget at the beginning. What I found was that I had all of this extra income and that I could put the capital in and invest in other places. One thing I could do with that capital and fortune was take time off from work and actually move to Spain for two years so I could enjoy that. It really makes sense to understand the amount of money coming in, understand and manage your expenses, and invest the difference wisely. Really important, and then some of the other things that I hope everyone has heard of about an emergency fund. The truth is, even when it comes to your investment, you don’t want to withdraw from it because your car breaks down or anything like that. When there’s a big downturn, you don’t want to be openly nervous because you really live off of it or need that money, so have an emergency fund for three to six months just in case there is a downturn. In the event that there is a health situation that brings everything to a standstill, then it is really important to prioritize high-interest debt above all. Credit cards, number one up there. I usually say when the percentage you pay on your debt is low, 3% to 4%, things like that. It might not be the most important thing to prioritize this instead of investing that money, but if you pay 15%, 20%, 25%, 30% on any type of debt, you get rid of that because that is a burden on yours entire portfolio that needs replenishing somewhere.

Jones: At The Motley Fool, we’re about empowering everyone to invest for the long term. What should millennials and people of color know about getting started with investing?

Peters: Going back to something you said is starting with it. It’s now a lot easier to start with small amounts of money. Many companies offer fractions of shares; you don’t have to buy a whole share if you can’t buy everything. There are online apps that make investing and understanding very easy. You can take a small amount of money and go if you don’t know what to invest in, invest in everything and again buy ETFs, index funds for the whole market. But you can also handle staples that you know and love. People invest in Nike (NYSE: NO) because they love Nike, people invest in coke (NASDAQ: COKE) because they drink Coca-Cola. In most cases, if you keep investing and keep doing it and have a long-term perspective, it is relatively difficult to actually lose your money or lose money when investing in good companies over the long term. Automate your investments, you don’t want to think about it. Have your retirement savings come straight from your paycheck, pour the money into your bank account, have a portion go straight to your brokerage account or investment account or emergency fund, and then move from emergency funds to another location. But there are many ways to get started. Stocks are a very, very easy way to go. A lot of the people I’m going to speak to really want to invest in real estate, want a rental property, but they have to save $ 30,000 to $ 40,000 or $ 10,000 to get in, or they have to learn a lot. In the meantime, I tell them, “Invest in stocks, use a robo-advisor, buy index funds.” Use your money so that when you are ready for the next step or investment, it will grow and actively work in the background. Right now in a time of uncertainty, when a lot is happening. Now is a good time, as always. The best time to invest is now, or yesterday, I should say. As the old saying goes, “Time in the market almost always beats the timing of the market.” By investing, staying and participating early, you are truly unlocking wealth rather than trying to find the hot swing trade.

This article represents the opinion of the author who may disagree with the “official” referral position of a premium advisory service from the Motley Fool. We are colorful! Questioning an investment thesis – even one of our own – helps us all think critically about investing and make decisions that will help us get smarter, happier, and richer.