How to Safely Invest Small Amounts of Money
Investing money into anything is a big decision to make. However, there are several ways to safely invest smaller amounts of money to find out if investments will work out for you. Before beginning to invest in big-ticket items, start off small. This can help you understand how the process works and help you save money at the same time.
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Instructions
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A great investment for beginners is to open a savings account at the bank of your choice. Look around and research current interest rates. The more money you put back into your savings, the more interest you will draw, which overtime can create a good bit of money if you leave it there long enough. Check your bank statements every month to track progress.
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You can also start a CD -- or certificate of deposit -- investment. This is a great choice for investment beginners. Depending on the bank and the options available, most of the time you can start up a CD with a minimum amount of between $500 and $1,000. When you invest this money, you are not allowed to withdraw it for a certain amount of time, such as a year or more. The good thing about CDs are that they draw a lot more interest than a savings account.
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Once you have started a CD, you can choose to create a CD ladder. To do this, you purchase another CD at a different term than your other CDs. This will allow you to choose between having them mature a various times, like every year or even every month, depending on the terms and length of the CD. If you choose not to take the money out when it matures, the funds simply roll over into a new CD with the longest term option. This is for more advanced investors, so you may want to speak with a professional before deciding on this option.
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You also may want to put some money into stocks. If you have extra income or money that you don't need for several years, talk to a stock broker about investing in stocks. Never invest in high-risk investments if you don't understand the market or can't afford to lose the money. Start out small with simple stocks that you will not have to put a lot of money into.
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Tips & Warnings
Collect all your extra change for a month and then put it into your savings account. Every little bit helps. Always talk to your bank agent before deciding what to invest in.
