What Assets Can I Buy With Little Money?

Investing does not always require a substantial amount of capital to begin. Assets represent anything an individual or entity owns that holds financial value, such as real estate, cash, or investment accounts. These resources can generate income or appreciate in value over time. Building wealth through investment is accessible even for individuals with limited funds.

Accessible Investment Assets

Investing in publicly traded companies or diversified funds is possible without purchasing entire shares, thanks to fractional shares. A fractional share represents a portion of a full share of stock or an Exchange-Traded Fund (ETF). This allows an investor to allocate a specific dollar amount, for example, $50, to buy a piece of a company’s stock. This method facilitates diversification across various companies, even with a small budget.

Exchange-Traded Funds (ETFs) are another accessible investment option, pooling money from many investors to invest in a basket of securities like stocks, bonds, or commodities. ETFs trade on stock exchanges throughout the day, similar to individual stocks, and often have lower operating expenses compared to actively managed mutual funds. By investing in an ETF, an individual gains exposure to numerous underlying assets, aiding portfolio diversification.

Mutual funds also offer a way to invest in a professionally managed portfolio of stocks, bonds, or other securities. While many mutual funds traditionally require a minimum initial investment ranging from $500 to $5,000, some funds have significantly lower minimums, occasionally as low as $5, $10, or $100. Mutual funds provide diversification by spreading investments across different assets.

Real Estate Investment Trusts (REITs) offer a pathway to invest in income-producing real estate without directly purchasing physical property. REITs are companies that own, operate, or finance various types of real estate, such as office buildings, shopping malls, or apartment complexes. These entities are typically traded on stock exchanges, allowing individuals to buy and sell shares just like common stocks. REITs can provide a share of the income generated from commercial real estate.

Cryptocurrency, while known for its volatility, can also be purchased in small allocations. Cryptocurrencies like Bitcoin are highly divisible, meaning an investor can buy a fraction of a coin rather than an entire unit. Many cryptocurrency exchanges and platforms allow for the purchase of these small fractions, enabling individuals to invest with minimal amounts.

Getting Started with Small Investments

Beginning to invest with modest sums typically involves selecting an appropriate investment platform. Online brokerage accounts provide direct access to various investment assets, including stocks, ETFs, and mutual funds. Many online brokers cater to new investors by offering low or no account minimums and commission-free trading for US-listed stocks and ETFs. This accessibility makes it easier for individuals to start investing.

Robo-advisors represent another popular option for those starting with smaller investments. These automated investment services use computer algorithms to construct and manage diversified portfolios based on an investor’s financial goals and risk tolerance. Robo-advisors often feature very low or no account minimums, with some platforms allowing investments to begin with as little as $0 or $10. They typically charge an annual management fee, often ranging from 0.25% to 0.50% of the assets under management.

Once an investment platform is chosen, the next step is to set up an account. This process usually requires providing personal information, including your legal name, current address, and Social Security Number. Financial details, such as employment status, annual income, and investment objectives, are also commonly requested to ensure the platform can offer suitable investment options.

After the account is established, it needs to be funded. Common methods for depositing money into an investment account include electronic transfers, such as Automated Clearing House (ACH) transfers, directly from a bank account. Some platforms may also support direct deposit or recurring deposits, allowing for consistent contributions. Funds typically become available for investing within a few business days.

With funds in the account, making the first purchase involves navigating the platform’s interface. Investors can typically search for specific assets using their ticker symbol or browse through categories like ETFs or fractional shares. When placing an order, especially for fractional shares, the investor specifies the dollar amount they wish to invest rather than the number of shares. The platform then executes the order, and a confirmation is usually provided.