Article Summary

• You can start investing with as little as $20
• The average American spends almost $18,000 per year on “non-essential” items
• Easy suggestions for finding investment money that won’t make you “go without”

YOU Are a Typical Investor

When thinking about the typical investor, many imagine some stodgy old rich man with lots of money.  So if you are on a limited income, a single parent, a student, or someone who just lives paycheck to paycheck, you may not see yourself as the potential investor you truly are.

It Doesn’t Take Thousands to be an Investor

Contrary to popular belief, you do not need a huge pile of money to be a serious player in the stock market.  All you really need is to get started today.  Whether that is with $20, or $2000, the most important piece is making the decision to invest.

38% of Americans believe they cannot afford to invest for their retirement, but also spend up to $18,000 a year on “non-essential” items

-Ladder

While getting started may be the most crucial piece, having money to invest is a pretty close second. Investing even $150 a month while averaging a 10% rate of return will earn you $30,000 in just 10 years.  But according to USA Today in a research study conducted by OnePoll, 38% of Americans believe they cannot afford a retirement fund because they don’t have enough money.  This study also concluded that American’s spend almost $18,000 a year on “nonessentials”. 

Investing Doesn’t Mean Going Without

$18,000 a year would be a nice chunk to start investing with.  Many of the “nonessentials” listed in the study though are things that make life more enjoyable, (such as bottled water, rideshares, and personal grooming) and are things the average person is not likely to give up entirely.

Still, there are ways to find investment capital;

Rounding up – One of the simplest ways to find a little extra is to utilize bank services that will round up each of your debit purchases to the nearest dollar, and deposit that into a savings account.

Having a designated account for investment funds is also a good idea, so those funds don’t get confused with savings or vacation funds.

Insurance – In an interview with CNBC, Leslie Tayne, a debt relief attorney at Tayne Law Group, says one of the most overlooked ways of saving money is adjusting the insurance you buy.  For example, canceling identity theft insurance, noting that most credit cards offer built-in protections for fraud, nothing extra needed.

She also looked at children’s life insurance policies, reminding us that “children don’t usually have assets to protect.”  If you’ve purchased life insurance for your child planning to “cash-out” to help cover college costs, think again.  According to Tayne, the fees outweigh the rate of return and you’d do better investing that money.

Other insurances in Tayne’s sights are travel and rental car insurance, noting that a typical car insurance policy often extends to rental cars, and if you book travel plans with a credit card, most already provide travel insurance.

Cutting Back on the “Non-essentials”

It’s always a good idea to comb through your bank statement on a regular basis looking for all those tiny little $2.99 or $9.99 recurring or subscription fees.  You might be surprised at how many you have, and how many you don’t use.   Finding even $20-30’s worth is a great way to add to your investing fund.

In the OnePoll study, they estimate Americans spend a little over $200 a month on restaurant meals and just over $175 on take-out or delivery meals.  This averages out to about $95 per week.  Cutting back by only $25 per week could easily leave you with $100 a month to invest, while still enjoying the convenience of a restaurant or delivery meals. 

It’s money you’ll never even miss

There are other things too, like canceling unused gym memberships, reducing multiple video streaming accounts to just one or two, or dropping down to the non-subscription music streaming apps.  The advantage here is that because you’ve been paying them all along, by canceling and adding that money to your investment fund, it’s money you’ll never even miss. 

Investing is not just for the rich or people with loads of disposable income.  It also does not have to be about scrimping and saving and going “without”.  By spending an afternoon with your bank statement, calculator, and just a little creativity, it is very likely you can find all the money you need to start investing today. 

You can do this.  If all you have is $20, start with $20.  This is your future, and you are worth it.