5 Ways to Invest With Limited Capital

You want to grow your nest egg and the allure of the stock market has your attention, but can you invest on a limited budget? You sure can. Whether you’re just curious about securities or you’re ready to hand over your hard earned cash, keep reading to learn five ways to invest with limited capital. 

Options Trading

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A common reason people look to the stock market is to earn enough income to eliminate debt. Options trading is one method you’ll want to look into. Option trading basics differ from trading stocks and bonds because you can outperform the market, control your chances to earn a profit, and manage your level of risk — right up front.

Consider setting up a payroll deduction that benefits your investment account. An automatic transfer from your checking account works well too. Even if you start with a modest contribution, you’ve started down the road to potential earnings. 

Swing Trading

Do you have a nice refund coming from Uncle Sam this tax season? Those funds are perfect to start your new investment strategy. Swing trading is a method for buying and selling securities, and even novice investors can realize considerable returns.

Swing trading isn’t as extreme and time-consuming as day trading, and you can limit your risk by investing in the large-cap market. Investing can be confusing, so if you don’t understand swing trading, hire a professional. Sure, you’re going to have to pay commission, but the long-term goal is to earn more than you have to pay out. 

Participate In Your 401(k) Plan

If your employer offers a 401(k) plan, go for it. The frugal investor should always capitalize on any employer-sponsored retirement plans, especially if there’s a match. If your company contributes dollar-per-dollar up to a certain percentage, you will double your investment before you earn a single dividend. It’s the perfect way to start planning for your future at any age. 

The money you put in your 401(k) goes another step further in helping your bottom line. Your contribution is generally pre-tax, meaning you may end up saving on your tax bill. 

It’s also painless. Your employer will seamlessly deposit your contribution into your investment account with every paycheck.

Penny Stocks

Everyone around the office is talking about investing. They say you need to invest to grow your wealth, but don’t stock options require a lot of capital? Not penny stocks.

While never really sold for a penny, these stocks typically sell for under $5. In today’s market, your basic low-cost penny stock may bring in huge gains, if you’re lucky. Penny stocks do come with risks, as small-cap stocks are often volatile. 

Imagine if you got rid of your high-interest credit cards? You could divert those funds that are going to pay interest, into an investment account that pays you. Guru Dave Ramsey offers a seven-step plan to get out of debt. 

The stock market is appealing to individuals and families all over who live within a strict budget. These are just four investment ideas that don’t require a lot of money to get started.

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