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How to Make Smart Investments on a Small Budget


If investing seems like a foreign word to you that only those who are wealthy are able to do, this article is for you. Investing can also seem complicated and overwhelming when it conjures images of the stock market. There are several smart, simple ways you can invest on a small budget, regardless of your age or income. In fact, learning how to invest wisely sooner rather than later can help you pay down debt and start saving for you future.

Keep a Fund for Emergencies

First and foremost, if you don’t have a savings account, please start one before you start investing. It really does no good to invest even a portion of your income if you don’t even have a savings account set up for emergencies. If your car breaks down, or you have a medical emergency, it’s much harder to pull money out of those investment accounts than it is for you to access money from an actual savings account. It’s a good idea to have this emergency fund separate from other savings – like those for a down payment or for a new car.

Understand Your 401 k Plan

According to, there are at least 25 million people in the U.S. who work for companies that don’t offer a 401(k) plan. If you’re lucky enough to work for a large enough company that does offer that benefit to its employees, make sure you know how much of your paycheck is being invested in the plan. Many companies also offer a match investment for their employees too, although that has been severely cut back in this economic climate.

Research Investment Firms

There are several online investment brokers as well as larger companies that may work well for you. Before you decide to go down the path of using an investment broker, do your research. Make sure you understand where your money is being invested and why. With many online brokers, a small amount of money can go a long way.

Educate Yourself

I have a friend in the advertising business who has just recently taken over her own investment account. She has no background in finance or investments, but she quickly taught herself after doing a sizable amount of research on the stock market. She’s nearing retirement age, and felt that the investment firm she had been using for so many years, wasn’t investing in the best companies to get the highest return. They were definitely not being as aggressive as she would have liked. She now checks out the stock market every morning and monitors her shares like a hawk. Why is this so important? At the end of the day, this is her money. She may not know all of the ins and outs of the stock market business, but in one year of taking over her own investments, she’s earned more than $100,000 in returns for herself.

Regardless of how you decide to invest or how much you decide to invest, make sure that you understand all of the options available to you. After all, it is your money. Regardless of if it’s a little or a lot of it, the more you understand, the better chance you have of being successful in your investment strategies.

 Photo Credit: newsusacontent