How Do You Invest When You Don’t Have Much Money?

The following is a sponsored blog post:


Most of my readers aren’t wealthy. They’re not poor either, but they’re in no place to be called financially independent. That’s fine, but if you’re in a situation like this, you’ve really got to get your ducks in a row before you can start laying a foundation for wealth. There are no steps here that can be skipped. But if you can successfully make the decisions necessary to pull this thing off, you’ll find that you have a lot of wealth at some time in the future. And you don’t have to have a lot of money to start this process.


Start by changing the way you spend and save. This may not sound like investment, but it is. Investing is about taking a finite resource and using it for the best possible purpose. These resources can include time, energy, learning capacity, and the like. These decisions can be translated into money, but investment is frequently allocating intangible resources with somewhat intangible results. We’ll confine our discussion to things you can do with your money before you start properly investing.


I’m speaking here of cancelling debt and increasing savings. Debt tends to snowball quite quickly, many credit card debts building at 17.9% and higher every year. This is faster than you can earn money in most investments, so if you have debt like this, you’ve got to cut it off at the knees or you’ll be bleeding money faster than you can earn it. This process may take months or a years, but it’s important that you throw everything at it that you can. If you can kill off your debt, you’ll be able to save much faster. Once you have several thousand, or tens of thousands, of dollars saved, you’re probably ready to start investing in earnest.


CFD Trading with CMC Markets is a great way to learn about investment as a whole. Using their demo account, you won’t even have to risk any money. You’ll simply have to make tutorial investments based on the real value movements of a variety of markets and financial products. By seeing what you would gain and lose in real life, you can start to develop habits of making wise investment choices. This will build into every other form of investment that you ever take on. These can include many things.


Once invested, I recommend setting money aside for long term investments, like ETFs and index mutual funds. These are typically stored in a tax free account like a 401(k) or an IRA. Whereas CFD trading will resolve quickly, giving you money for today and tomorrow, ETF and index fund investment are meant to pay off over the course of decades, giving you money when your kids need to go to college, or you need to retire.


As you can see, starting an investing career without much money requires some important decisions and lifestyle changes. But once completed, saving and real investment isn’t hard at all. By learning the basics of investment using free tutorial opportunities available to everyone online, you’ll learn what you need to make judicious investment decisions for the rest of your life.

14 thoughts on “How Do You Invest When You Don’t Have Much Money?”

  1. Great informational article, but what a lot of people want to ask, or are thinking is this. If your only able to contribute a low dollar amount each payday what investment do you actually buy? When stocks (good ones) commonly trade over $100 a share and your only dropping say $20-$30 every couple weeks into an account it can take months or years to get enough cash to make a decent purchase, plus we’re not even taking into account trading fees. Like everyone we’ve all cut spending and are reducing our debt loads (hopefully) but its a real depressant when your bank only pays .0001% interest. So in order to start building where can a person locate quality information for quality lower priced stocks and ETF’s?

    • Hi Mark,

      These days there are several options for anyone wanting to buy stocks that do not require a lot of money to start. One company, Loyal3, allows for the purchase of fractional shares in a number of different companies at zero commission. You can invest as little at $10 at a time and if a stock trades for $100, as you mentioned, a $10 investment would buy you one tenth of a single share. If you look at my portfolio you’ll see that all my holdings are in fractional shares. Another company, Robinhood, also offers zero commission trades which means you can buy small dollar amounts there as well. Hope this answers your question. Thank you for commenting.

    • I have a person who I’m trying to teach investing to. Outside of those accounts, what I recommend is putting aside each paycheck that is ONLY for investing. Open a separate savings account at an online bank if need be (to avoid spending that money on junk). I personally set an amount that I want my bank account to grow to and move money over when it gets to that amount, but everyone is different. Some people need a place where that investment money can’t be touched.

      Look at your budget and choose an amount of money that you’ll be able to set aside regularly. Maybe $50 or $100 or $200 a paycheck. No one knows your budget better than you. Then build up to an amount that you would be comfortable putting into one stock. Maybe $1,000. Keep saving your set amount per paycheck until you get there.

      When you finally build up $1,000, put that into one great dividend paying business you like. Then repeat the process again and buy another company in another industry. Don’t buy the same company or the same industry until you have a decent sized portfolio of companies. While your eggs will be in one basket for awhile, you want to diversify as quickly as possible.

      Do this, and over time you will create a diversified portfolio of great dividend paying businesses. Maybe not as fast as one would like, but this sort of thing takes time naturally. And all that by putting $50-200 away per paycheck.

      ARB–Angry Retail Banker

  2. When it comes to the ‘snowballing’ debts that you described (credit cards etc), I’d be interested to hear your thoughts on a Debt Management Plan?

    I was on one for a while and I enjoyed the security that they provide by handling your creditors for you, but I didn’t like that I couldn’t be sure of what portions of my payments were going to what company.
    Jenna L recently posted…Equity vs. Debt in Real Estate Crowdfunding InvestmentsMy Profile

    • Hi Jenna L,

      Personally, I never liked the notion of a Debt Management Plan for some of the reasons you mention. I got into heavy credit card debt when I first started my own business almost 17 years ago and the way that debt was paid back was by attacking the highest interest card first. I know some suggest to attack the smallest balance first and snowball from there. The bottom line it that with your own self discipline you should be able to manage and pay back all your debt on your own without the assistance of any DMP. This way you have full control over where your payments go. It may take more work on your part as you’ll have to negotiate with multiple creditors but you’d be surprised at how accommodating some can be if you just call and speak to a real person instead of just ignoring requests for payment. Hope this answers your question.

        • Hi JL,

          It’s a lot easier than you think. Dealing with debt takes basic common sense but above all, discipline. Once you create a plan and stick to it without any digression you’ll see how easy it is to pay down all your debt. It does take time, depending on your income/expenses and sacrifices you are willing to make but there is always a light at the end of the tunnel. Thank you for commenting.

    • Hi SM,

      Thank you for sharing your advice on budgeting. I fully agree with you regarding attacking your debt snowball just as we are growing our dividend snowball increasing our passive income from year to year. It all works just like interest. You can pay it or earn it. You also need to be on the same financial page as your spouse with any money matters in your household. I’m happy that Mrs. DivHut and I agree wholly on spending, saving and investing. Thank you for sharing your thoughts.

  3. On the subject of investing vs. debt, Kevin O Leary was interviewed a while back and it happened to be one of those interviews where I didn’t automatically switch him off out of disgust. He actually had something interesting to say in response to a viewer’s question, which was, “should I invest, or should I pay my credit cards off”?

    And O’Leary actually responded intelligently, he told the viewer, “don’t be stupid, pay the credi cards off! The credit cards are costing you 18%! I don’t even make 18 in my O’Leary funds”.

    Just an aside, O’Leary was both right and wrong. Right in that paying the credit cards back is the smart choice. Wrong in that the after tax return required to recoup non-deductible credit card interest is closer to 36%, not 18%.

    • Hi Dan,

      I think it’s always wise advice to pay off your credit cards or any balance that carries interest on it. Eliminate the interest and that amount is an automatic “gain.” I know many don’t like the way he comes off in interviews but he actually says many intelligent things when it comes to finances. One of my favorite videos was of him describing his affinity towards dividend paying stocks and that he only buys stocks that pays dividends. Thank you for sharing a Mr. Wonderful moment.


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