Only Have $200? You Can Still Invest and Make Money — Here’s How.

Time: 6–8 min.

Summary:

• Even if you only have a small amount of money, you still have a variety of options for investing. ETFs, fractional shares, DRIPS, and savings bonds allow you to invest as much as you can afford.
• No matter how you choose to manage your money, the key is to start early so you can get the most out of compound interest.

Making your money make more money

Dreaming about having your money make more money, but aren’t sure whether it’s possible with your current financial status? Here’s some great news: you — yes, you! — can be an investor right now. 💹

Contrary to popular belief, investing is not just reserved purely for the elite or those with substantial wealth to spare. In fact, investing can really be very straightforward, even if you’re just beginning to dip your toes into the investment pool. You don’t need thousands or even hundreds of dollars to start investing in your future and your financial freedom. In fact, you can get started even if you only have $200 or less to spare. Here’s how to start investing and making your money make more money for you.

Why investing is a good idea (even if you only have a small amount of money to play with) 💵

Investing can feel overwhelming, especially if you don’t have a ton of money to begin with. So it’s natural to default to sending your savings to a traditional savings account. However, investing your money can be easy, and if done right it can help take your money so much further than it normally would in a basic savings account.

While most savings accounts will give you marginal amounts of interest on the money sitting there, it usually isn’t very much. So while a savings account is a good option for stashing away money that you need for short-term financial goals, that money usually isn’t making very much money for you.

So if you really want to get the most out of your savings, investing can be a better option, especially if you have longer-term goals — for example: buying a car, investing in your future children’s education, or investing for retirement.

If you start investing your money right now — even a relatively small amount of money like $200 or less; you can get a head start on growing your wealth that will pay off in the future. Utilizing investment tools like Marygold & Co.’s investment calculator can even help you better visualize how your investments have the potential to grow over time, so you can see just how far that $200 can take you.

Of course, investing also comes with its fair share of risks due to the rise and fall of the stock market. On the plus side, if you’re starting off by only investing a small amount of money, this means that you’re dealing with a smaller risk than making huge investments.

Good options if you have $200 or less

Exchange-traded funds (ETFs) 💲

ETFs are investment funds that allow you to hold assets like stocks, commodities, and bonds which are traded on stock exchanges. Translated: if you buy shares of an ETF, you’ll be able to own portions of several different securities, diversifying your investment portfolio.

ETFs are also extremely easy to participate in, thanks to today’s financial apps like Marygold & Co. These apps allow you to invest in small shares of stocks or ETFs even if you don’t have a ton of money to start with. Many of them also walk you through the process so they’re suitable for beginners.

ETFS are a good option for: People who want to diversify their investment portfolio and hold multiple assets at once. They’re also a great option for beginners who are looking to invest without having to actively manage those investments.

Fractional shares 💰

Investing in fractional shares is another great way to invest and participate in the stock market without breaking the bank. Rather than paying the full share price for an entire stock, fractional shares let you buy smaller portions of an individual stock, so you can invest exactly what you can afford. In other words, you can choose the exact dollar amount that you can afford to invest!

After you purchase your shares based on the amount you can afford, those platforms can then figure out what fraction of the stock or ETF you actually own, rather than you having to calculate it yourself.

Fractional shares are a good option for: People who have an exact dollar amount that they are willing to spend on their investments.

Dividend Reinvestment Plans (DRIPS) 📈

If you’re interested in investing in a specific company, investing in Dividend Reinvestment Plans is a good option. These plans allow you to buy shares directly from certain companies, usually big corporations that offer this option. Then, rather than receiving the earnings from that investment directly, they are automatically reinvested into even more shares, allowing you to build your investment over time rather than immediately receiving a smaller and more immediate amount of money.

Investing in DRIPs are a good option for: People who want to invest but are more interested in a hands-off asset that doesn’t require active management. DRIPs would also be a good idea for people who are interested in investing in a specific company that they believe will grow over time and generate good returns.

Retirement Plans 🧓

Retirement plans are also a good way to grow your wealth specifically to be used in the future. You have a couple of different options here that you can contribute to:

• 401(k): A 401(k) is an employer-sponsored retirement account. Your employer will generally match your personal contribution to your 401(k) taken directly out of your bank account and based on your income before taxes, and those contributions are then invested into mutual funds or other investment options chosen by the employer. When you retire and withdraw on your 401(k), you will have to pay taxes.
• Roth 401(k): A Roth 401(k) is similar to a traditional 401(k), but the amount that is invested is based on your post-tax income. You’ll make less money this way, but your withdrawals won’t be taxed once retirement rolls around.
• Individual Retirement Accounts (IRA): These retirement accounts can be opened on your own without the help of an employee. You can either invest in a Traditional IRA, in which contributions are tax-deductible, or a Roth IRA in which contributions are made after taxes are paid. The contributions can be invested in a variety of options like stocks, bonds, and mutual funds.

Retirement plans are a good option for: People interested in a long-term investment that will support them after they retire from the workforce. They’re an especially good investment for people whose employers match contributions.

Savings bonds 📈

Finally, savings bonds are a safe investment option if you know you want to grow your money for future decades. You can buy bonds from the United States Government for as little as $25, and that money will continue to accrue interest over time (think: decades). It may be a much slower investment than other options like stock trades, but it is a guaranteed, government-backed investment that will pay off in larger sums as long as you wait enough time.

Savings bonds are a good option for: People who don’t want to take a ton of risks while investing for decades down the line. This might be suitable for people who want a guaranteed return for their retirement nest egg or for their children and grandchildren.

Recap: Investments You Can Make With $200 or Less

The bottom line

If you’re interested in starting your investment journey the easy way, consider checking out Marygold & Co., a new kind of financial management app. Marygold & Co allows you to invest your money, your way.

• You can invest in unlimited Money Pools, which are portfolios of ETFs, so you can customize your investments and dedicate them to any of your savings goals (no matter how many you happen to be working toward).
• You can also set up automated investing accounts, so you can direct deposit from your bank account to your investments every month so all you have to do is sit back, track your investments through the app, and watch your money grow.
• Finally, Marygold & Co. also includes budgeting tools and PayAnyone® capabilities so you can move and manage your money all in one convenient app.