Finding Money to Invest

One of the most common questions that I get asked is where to start. Often times individuals, especially younger people, have little to no excess income after paying all their bills and entertainment expenses. If they do have money left over it is usually an amount which they perceive to not be worth investing. However, nothing could be further from the truth.

Investing is not something that happens in a few days, weeks, months, or years. It is a lifetime pursuit. Given this, over time a little bit of savings here and there has the potential to add up into amount that can be used to fulfill a person’s goals.

Step 1: Start small. Most people in the stock market did not start off with a million dollars. If you have a spare $200 dollars in your savings account that is a great place to start! You should find a broker or firm who is willing to speak with you about your investments and objectives and take the time to work with you. It is unlikely you will have your own advisor at a major brokerage firm with $200 but there are more then enough advisers out there who would be eager to speak with you about investments that might make sense for your situation.

Step 2: Once you have decided on the investment that suits you best stick with it. Day trading, swing trading and other similar types of investing methodologies make one group of people rich; brokers.

Step 3: Add to your investments in small but frequent amounts if possible. Most everyone can skip one meal out or skip one night out at the bar or movies. Use the money you saved to add to your investments. For example, if a person was able to save an extra $50 dollars a month by skipping these activities that would add up to over $600 per year that could be used for additional investments.

Step 4: Relax and enjoy the power of compounding returns. If a person started an investment with $200 dollars and each year added $600 dollars by the end of 30 years assuming an average return of 8% per year that investment would be worth over $76,000! It is also interesting to note that the amount of money deposited into the investment was only $18,200 during the 30 year period.