Do you want to know how to invest money? Are you taken aback because you do not know how much you should put into your investments? You have to understand that even if you have a few dollars or thousands to spend, there are a lot of opportunities that awaits you. You just need to open your eyes and know more about these small, medium and big opportunities for making more money.
Small Investments
If you have a small amount of cash to spare like $20 to $50, then you might think that it is not big enough for you to make an investment. However, if you really want to know how to invest money, you should realize that no matter how small the amount is, it will eventually add up to an amount that is deemed to be large over time. Small amounts of money can be invested and they can reap great rewards in the future! You can take a Dividend Reinvestment Plan, more known as “drip”. This is very much related to Direct Stock Purchase Plan or DSP. With these, you can directly buy stocks from the companies and not go through any broker at all. There are a lot of companies that provide opportunities for small investors. If you are patient enough, your small cash now will get big in the future. You just have to wait a little longer than usual.
Medium Sized Investments
Should you feel that you need to invest higher amounts like $100 to $500, you can look into index funds or mutual funds. This can be your chance to make an investment that will give you a high return per annum. Sometimes, you can earn as much as 10 percent per year, usually for those that are under the Standard & Poor’s 500 index. You can even go directly to companies that have mutual funds so that you can bypass brokers who charge quite a large sum. If you feel like spending a few more hundred bucks, you can open a discount brokerage account. This requires a little bit more knowledge on how to invest money so make sure that before you dive in, educate yourself first and make sure that you really know what you are doing.
Big Investments
If you are one of the lucky people who have thousands of dollars to spare, make sure that you make a wise decision on how you will begin your big investments. You can still continue with your discount brokerage account. You just have to have biggest purchases or you can add up to your original investment every few months or every year. Of course, the higher your investment is, the bigger your rewards will be in the future, especially if you were wise enough about where you have invested your money in. You can have a Roth IRA so that you can avoid paying taxes in the future when you withdraw your money. Of course, this can vary depending on the amount and the current laws.