There is an old saying that you need money to make money, though this isn’t really true. You can make financial progress investing small amounts over a long period of time if you have decent growth rates. The book “The Millionaire Next Door” proved that was possible over decades. And you can become financially well off if you start investing and see very good returns even faster. But the numbers for traders can be surprisingly low – as little as a hundred dollars.
Here is how you could start trading on a shoestring budget.
Learn Before You Put Money at Risk
First, you should learn as much as you can from reputable sources for free. Online sources like InvestinGoal are great places to start, as their website contains numerous guides and reviews on social trading. Find books by reputable traders, not just people selling you webinars and newsletters and whose income comes from selling the “system”. You’ll be able to avoid costly mistakes and won’t have to put money at risk until you’re ready.
If you’re looking for investment opportunities, read about the risks as well as potential rewards of investments like options, ETFs, microloans. Don’t just buy something because it is hot, and never buy anything you don’t understand.
Practice, Practice, Practice
Look for trading platforms that let you set up a practice account. You can enter trades as if it were a real one through the same interface as you’d use for legitimate transactions and then see what your results would be. This allows you to test out various strategies without losing real money. Once your trading strategy is proven successful, you’ll make fewer investing mistakes and earn higher returns over the long run.
Actually Do Something
For some, the time invested reading and learning is not only the first step but the last step. This is often called analysis paralysis. They can say they are doing something by studying but never do anything. Even the person who makes progress paying an extra $50 a month on debt is making more financial progress than someone who buys yet another book but never actually invests.
Repeat the Process
We mentioned that someone who is actually taking action and putting some money against debt is making financial progress, as is someone who puts $20 a week into savings toward some goal versus someone who procrastinates and never acts.
Suppose you invest a hundred dollars in a trading platform and earn $120 back. You’ve earned $20. You should set that aside for taxes and as a financial cushion and then try again, earning more money off the re-invested $100. Over time, you’ll have hundreds of dollars. And you can use that money to invest in other products like stocks and EFTs. Or, you could engage in bigger, more profitable trades and turn hundreds of dollars into thousands of dollars.
Starting trading with as little as $100 is perfectly possible if you know how to go about it. But, if you do decide to start trading, make sure that you learn before you put your money at risk and practice on platforms that let you test out various systems risk-free