Little drops of water make a mighty ocean.

Recent statistics show that 30% of Americans older than 55 have no retirement savings and almost 75% over the age of 40 are not meeting their retirement goals. People often presume that investing requires a lot of money, and thus, keep delaying the process. In reality, investing doesn’t require thousands of dollars, but it does need proper knowledge and understanding. You can start investing in stock markets and mutual funds with as little as $50. There are several investment vehicles that you can consider for letting your money grow. Here are some of them:

10 Ways to start saving with Small Amount of Money

1. Savings Account

Savings accounts are a simple way to invest. They are easy to open and understand and require little investment, to begin with. They are also a great way to build up an emergency fund because of their easy accessibility.  Depending on your income, you can decide on an amount to deposit to your savings account each month. You can keep increasing this slowly as you go high up in your career. A savings account is one of the safest ways to invest your money. Look for a bank that provides the most competitive savings account interest and you are good to go. 

2. 401 (K) Retirement Account

If you struggle to keep aside some money on your own, the easiest way to start investing is through a 401 (k) account. Ideally, you should start saving in a 401 (k) from your very first paycheck. Most companies provide their employees with a retirement saving account. An automatic deduction is taken out from your payroll each month. You can simply choose a percentage from your gross income that you want to allocate to this account. 401 (k) accounts are a great way to plan and save for retirement and require very little effort on your part.

3. IRA Retirement Account

If your employer does not provide a 401 (k) account, you can go ahead and open an individual retirement account (IRA). You can choose between a traditional IRA and a Roth IRA. An IRA account is a tax- deferred account. In fact, withdrawals from Roth IRA are tax- free after the age of 59 ½. An IRA allows you to save up to $5,500 per year before the age of 50 and $6,500 per year if you are 50 or older. This is an easy way to build up a sizeable amount in just a few years. 

4. US Treasury Security Department

US Treasury Securities provide protection from market swings and make investing a safe option. These securities mature between 30 days and 30 years. You can start investing in government securities, via their online portal, with just $100. The same portal also allows you to sell your securities. You can schedule an automatic deduction from your payroll each month for the security you decide to invest in. Although government securities are not great for building huge profits, they are a nice place to start from, with little investments. 

5. Mutual Funds

When you invest in mutual funds, your money is spread across stocks and bonds. Such funds require bigger sums of money to start investing, that may be hard to shell out all at once. There are some companies that also allow monthly subscriptions of $50 to $100. You can discuss these options with a financial advisor and start investing monthly. 

6. Real Estate via crowdfunding

Traditional real estate is definitely an expensive investment and can take years to accomplish. However, people these days have turned to real estate crowdfunding. You along with a bunch of other real estate investors can pool in together to buy a property as partial owners. When the property is later sold, the profit is distributed among all the investors as per their agreement. It is advisable to include like- minded people or family in crowdfunding to avoid disagreements later. 

7. Gold and other precious metals

Investing in gold has been a part of many cultures and is seen as a viable investment vehicle. Although unlike other investments, there is no steady rate of interest that you earn on gold or other precious metals and gems. But gold prices are always on the rise and selling it off at an appreciation can be a good way to grow your money. 

8. Certificate of Deposit (CD)

CDs are one of the oldest forms of investment. You can buy a CD at a fixed rate from your bank. Your bank further lends this money in the market. CDs offer little to no risk, but they also come with low rates of return. The upside is that you know precisely how much money you will have when the CD matures. 

9. Dividend Reinvestment Plans (DRIPs)

DRIPs allow you to start investments with very little money. With DRIPs, your money is invested in stocks of companies that pay dividends. You can choose to invest directly in stocks of the companies that you like. Most of these plans come without an investment fee. You can stick to periodic contributions that can be auto deducted from your salary. The dividends you earn can also be further reinvested to buy more stocks of the same company. This is a good way to invest in big corporations without having to make huge investments. 

10. A Side- Business

Investments don’t always have to take the traditional route of big companies and bonds. You can also invest in yourself and your passion. You can pick up a hobby and turn it into a source of income. If you are a writer or a painter, you can build up a website and earn money through affiliate links. You can also set up a side business apart from your job, to earn some extra money. A lot of people are setting up home-based businesses and combining their passion and work. 

To sum it up

You don’t need a lot of money to begin investing. All you need is consistency and commitment. Something as simple as setting aside a few dollars a week in a cookie jar is a good way to start! Calculate when to start saving for retirement, to get a fair idea of which investment method is right for you. 

Do you think you are investing enough? Reach out to financial advisors for help and use their expertise to devise a holistic investment plan.