A lot of us think that investing is something that only the wealthy can partake in. While it’s true that you need a lot of money to invest in some assets like property and gold, there are other forms of investment that don’t require spending as much money upfront. In fact, you can start investing with only a few pounds.

Investments that don’t require a lot of money upfront

There are a few investment strategies for those that don’t have a lot of money to put down. These include:

Stocks

Trading stocks is one of the most traditional and reliable forms of investing. Nowadays, you can invest in stocks with as little as £1 thanks to trading apps like Trading 212 and eToro – these apps don’t have fees and allow you to buy parts of shares, instead of having to buy whole shares. It’s worth buying shares in a multitude of companies (known as diversifying your portfolio) in order to minimize any risk of loss. Most people make about a 10% return per year from stocks. If you want to find out how it works you can even set up a virtual portfolio to try out different strategies before committing your hard-earned funds.

Cryptocurrencies

There’s been a lot of hype over cryptocurrencies like Bitcoin recently. Many of these cryptocurrencies have seen huge spikes in value over the last few years leading to huge profits. Of course, some cryptocurrencies have also proven themselves to be quite volatile, falling dramatically in value at points too (it’s definitely not a low-risk investment). The good thing about crypto is that you don’t need a lot of money to invest, making it worth the risk – you can buy £5 worth of crypto if you want. There are many cryptocurrency exchanges out there where you can trade Ripple (XRP) and other cryptocurrencies with minimal fees. If you don’t know that much about exchanging, it’s important to research how to choose the best platforms, Taking a look at the Extras Cryptocurrency Exchanges guide is one option when it comes to this! As with stocks, try to diversify your portfolio to minimize the risk of loss. 

Real estate crowdfunding

Buying property may not be within your budget, but you could try real estate crowdfunding. This involves investing in property with multiple other people. You then all get a share of the return. There are quite a few real estate crowdfunding sites where you can get involved in this form of investing – you’ll usually need to invest a minimum deposit of a few hundred pounds up front, but this is a lot cheaper than the multi-thousand-pound deposits that you’d pay when buying property.

Adding to your investment

Investing a few pounds isn’t going to make you £1000 returns. However, you can always add to your investments over time. A bit like putting money in a jar, you can keep buying more stocks or more crypto over time. This allows you to slowly build up your returns. Some trading platforms even allow you to set up a direct debit – you could plan to invest £10 every week. Alternatively, you could try apps like Moneybox that round up every card purchase you make to the nearest pound before investing the leftover change.

Disclaimer: I am not a financial expert. You should always seek professional advice before undertaking any investment.

(collaborative post)