Introduction
Many people in the world think that if you need to invest in stock market then you should have thousands of dollars in your bank but in reality this statement is false with the help of new upcoming technologies in this world and online platforms literally anyone can start investing in stock market even with a small amount of money whether you’re a student, a beginner, or someone who wants to grow his/her savings by the stock market It is now open to everyone In this article, we will teach you how to start investing in stocks with little money
Understand What Stocks Are
Before investing in this market, you need to understand the basic of stock market like what stocks are or shares and how this market works it is very important to understand what you are buying. A stock basically represents a small piece of ownership in a company. When you buy a stock, you become a shareholder it means you own a small part of that company that worth to the amount you invested. If the company performs well and starts to grow your stock value increases and sometimes you even earn dividends. Dividends are the small profits paid to investors.
Set Your Financial Goal
Whenever you invest in stock market you need to set your goal that whether you are investing in this stock for how much time like for short term or long term
If you are investing for short terms, then it is recommended to follow the market and trends But if you are investing for long term for like 10 years then you need to invest in the companies the grow little by little over time
Choose a Reliable Platform
Before you start investing anywhere you need to find a trustworthy platform choosing the right platform is like getting ahead of 30% people because a good platform helps you every way by telling you hot markets where people are investing, news about the market or even buying and selling stocks
All thanks to the digital apps due to which investing has become easier than ever. You can start with these platforms because these are the best
-
Robinhood
- eToro
- Webull
- Trading 212
- Interactive Brokers
These platforms allow you to start with as low as $1 by using fractional shares, which means you can even buy a small portion of expensive stocks like Apple or Tesla. If stocks cost 200$ then you can even buy 1/10 part of the stock which is equal to 20$
Fractional Shares
Fractional shares are one of the options for investors with little money instead of spending 500$ on stock you can invest 5-10$ This option allow you to expand your portfolio by investing in multiple companies
Investing Regularly
The best way to grow your little money is by investing regularly. You can invest 5$ or 10$ weekly. This method is called Dollar Cost Averaging (DCA) it simple words it means buying small amounts of shares consistently which helps to balance the risk of market ups and downs.
Focus on ETFs and Index Funds
If you don't want to invest in a single stock you can invest in ETFs (Exchange Traded Funds) or Index Funds.
These funds combine multiple stocks in one place. For example, if you look at the S&P 500 ETF it invests in the top 500 companies in the U.S. so, your money automatically spreads across all of them. Even if you invested like 100$ in it will divide the money equally in every company which will be equal to 0.20 cents, so it means you invested 0.20 cents in world top 500 companies
Learn Before You Earn
This is the most important point you need to understand sometime people just buy shares by just knowing they are in top list but sometime even the top shares become a loss while some people ask to people which stock to invest but in reality people will tell you based on their plans if you want short term profit but you ask a person where to invest the money but he told you about the shares for long term because he or she need profit in long term and they are not in rush so learning before earning or investing is very important for you because in this case your mind will decide according to your situation
Bonus Tip
If you make profit or receive dividends don't rush to withdraw them. If you really want your money to become too much or even more than your need then seriously Reinvest those earnings to buy more shares. and this method is called the compounding method your money keeps growing on its own
Conclusion
You don't need thousands of dollars to invest in shares, but you must need knowledge before you invest because that knowledge phase will save you to not being dependent on anyone
