How To Start Investing – Even if You’re Completely Broke
Disclosure: We’re letting you know that this post contains sponsored links which The Smart Wallet receives compensation for, which may impact their order of appearance because talking about money should always be an honest discussion.
Small steps.
That’s how I approached investing.
I’m not an investment expert, at all, but I knew the earlier that I start investing, the sooner that money can grow. And time is key.
And I don’t consider myself an investor (that sounds way too bougie), but a microinvestor. Sounds more approachable right? Like I said, small steps.
Microinvesting is about investments that are small enough fit into anyone’s budget.
Even yours!
This method is typically used via an app and even better, you don’t have to understand the stock market to microinvest.
Here are some of our favorite apps to start investing, even if you’re broke:
Own a Piece of Tech’s Top Companies for $5
This app is like an easy gateway to investing.
It’s called Stash, a microinvesting app that lets you invest for as little as $5 and it takes less than 2 minutes to get started. We’ll even give you a free $5 to get started.
They curate from over 150 investments which include stocks and Exchange Traded Funds. You’ll get to choose where to put your money based on things like your personal beliefs, interests, and goals.
Finally, investing is no longer for the elite 1% with Stash helping to make it so easy for the rest of us.
Start Investing Your Spare Change
Whenever I had too much spare change to carry, I just tossed it into a jar at home. And then a year later, (if I remember to) I’ll take it to a coin exchange machine and realize I had collected $35. Not bad.
Now, I just use an app to digitally collect my change and invest it for me. It’s a great way to save smarter without thinking and one step closer to being debt-free.
The app is called Acorns.
For every purchase you make, the app automatically rounds up to the nearest dollar and saves & invests the difference into your Acorns account.
Since roundups are less than $1, you’ll barely notice the impact on your bank account. Acorns will start to round up and save for you, while at the same time, investing those savings so that your portfolio could grow.
It only costs $1 a month for accounts that have under $5,000 and with our $5 bonus, you’re already covered for almost the rest of the year!
Earn More Interest
As you know, traditional banks are known for giving crappy interest rates on your savings account.
Most only give 0.01% APY which for instance, if you have $10,000 in your account, would earn you around 10 cents per year.
Varo, however, gets you a sweet 1.75% APY savings, more ways to auto-save, and you could get your paycheck up to 2 days earlier.
It’s 100% free to use, with over 55,000 free AllPoint ATMs nationwide, with no minimum balance requirements, and no foreign transaction fees. And of course, your account is FDIC-insured up to $250,000.
They offer “Save Your Change” which rounds up purchases to the nearest dollar and automatically saves the change to your savings account. (Super popular for busy people).
And Varo Forecast will keep track of your spending across all accounts so you can get a better idea of how to manage your cash flow. You can also set spending caps to really set your budget.
Stop Paying Bank Fees — Invest Instead
Avoid getting nickel-and-dimed by traditional banks.
They can charge monthly maintenance fees ($10-$12 a month), out-of-network ATM fees ($2.75 per transaction), and overdraft fees ($35 per). That’s $144 a year just on maintenance fees alone, and if you add in an occasional overdraft plus ATM fees, it’ll be way more! Ridiculous.
Avoid silly and frustrating fees by using Chime, a mobile banking app with no hidden fees whatsoever.
No monthly fees, no minimum balance requirement, no overdraft fees and no foreign transaction fees. A truly free checking account that’s FDIC-insured up to $250,000
It was also really easy to set up and I got my debit card within 5 days.
Chime offers 3 effortless ways to save too:
- Every purchase with the Chime card, the app automatically rounds up the digital change to save to a savings account
- Choose to have 10% of your paycheck automatically transfer to a savings account
- Get 10% back cash back on certain kinds of bills or purchases like groceries, entertainment, and cable/phone bill!
Automatic savings, cash back on purchases and no fear of fees. Sweet! Use all the money you saved from hidden fees and invest it instead.
*Investment advisory services offered by Stash Investments LLC, an SEC registered investment adviser. This material has been distributed for informational and educational purposes only, and is not intended as investment, legal, accounting, or tax advice. Investing involves risk.
