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Three Safe Ways to Start Investing with Small Amounts of Money
You are not an investor yet but you would like to start. You are probably young and do not have a lot of money. But you are watching the stock market go up and up and would like to stake your claim to part of the American dream. How do you start out investing and how do you avoid losing your money right away? We suggest three safe ways to start investing with small amounts of money. You do not necessarily need to start out investing in the stock market! However, that is where you probably want to put your money eventually and for the long term.
Three Safe Ways to Start Investing with Small Amounts of Money
Money market accounts and certificates of deposit at the bank
Pay off your credit cards
Buy your home instead of renting
From these three safe ways to start investing with small amounts of money you can build an investment portfolio over the years.
Money in the Bank
The first of our three safe ways to start investing with small amounts of money is to stay safe and liquid. The first step in investing in the stock market is not to buy stocks.
The first step is to take a look at your finances and your expenses. In fact how to start investing in stocks is to get your financial house in order first and then start picking stocks.
If you want to be a successful investor, discipline yourself. Put $50, $100 or whatever you can in the bank every payday. As your bank account grows create a ladder of certificates of deposit. These will pay better interest than your savings account and if you set them up so that every month or so one of them comes due you will always have some cash on hand for emergencies.
Stop Paying Credit Card Interest!
The interest rate on the outstanding balance on your credit cards can be as low as 13% and as high as 22%. If you are a really successful investor you will still have trouble making 13% a year on your portfolio year in and year out. And certainly you will find it difficult to make 22%. So when you start investing with small amounts of money pay off your credit cards first and foremost.