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Even When You’re Broke,You Should Still Invest

Even When You’re Broke,You Should Still Invest

When you are barely making ends meet as it is and “robbing Peter to pay Paul”, the last thing on your mind is investing or saving money. You definitely do not want to sacrifice the small luxuries you do get to enjoy during your struggle. Although  sacrificing to save for the sole purpose of investing could be very beneficial to you in the long run.

It is easier to save money, invest and not spend it than you think. All that it takes are small sacrifices that will be well worth it.

How many times per week do you stop for coffee? How often do you eat out? What unnecessary bills are you paying that could be reduced or eliminated? What unnecessary spending do you do that you can eliminate for the sole purpose of investing in your’s or your children’s future? For example, let’s say you stop at Starbucks three times per week at $5-$10 per stop, you have lunch with your co-workers twice a week for $20, then throw in that extra $20 per week you spend on miscellaneous. You could potentially save $1500 per year to invest. If you started out with $1500 to invest, you could have  $30,000 in 20 years if invested properly.

If you are not interested in investing or saving now, you could potentially be setting yourself up for a catastrophic situation in the future.

There are several different ways to invest without breaking the bank! Sacrifice now! Invest now! Prepare for your future now!

401(k)

You are probably familiar with 401(k). If you have a 401(k) that will match your contributions up to a certain percentage, that is where you should start your investment journey. If your employer is giving you essentially free money to invest, why not take advantage? Everyone should take advantage of this if it is available for them to do so.

DRIPs

There are also what we in the finance world call DRIPs. Dividend Reinvestment Plans. These allow you to invest small amounts of money into dividend paying stock. You purchase these directly from the company you wish to invest in. Some companies that allow you to purchase small amounts of stock regularly and reinvest the dividends are: Home Depot, Johnson&Johnson, Verizon, Coca-Cola and GE.

Target Date Funds

We also have something called Target Date Funds. Target Date Funds do exactly what the name says, by targeting your retirement date by changing the percentage of stocks and bonds to assure that your money always remains safe as you approach retirement age. Most of these funds require a minimum investment of $1000, but could in turn be very beneficial to individuals that prefer not to manage their own portfolio. Please be advised to use caution when selecting a target date fund, due to the high fees that some of these funds charge.

ETFs

Also available are ETFs or Exchange Traded Funds. ETFs are financial products that track the performance of certain sectors of the investment market. As little as one share can be purchased through a broker. Some ETFs track the entire performance of the stock market, bond market and several other markets. Most ETFs pay a dividend.

Some of this investing may require the assistance of a financial adviser or the use of a brokerage account.

If you are interested in investing, Investopedia.com has put together a list of the best discount brokers out there to get you started on your investing journey.

Best of luck in your investing journey!

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