If you were considering investing some money besides your 401(k) plan to boost your savings and making more money for your retirement, you are maybe asking a question right now: how to do it with a small amount of money. In this post I am going to show you how I did it and what strategy I consider the best when investing small money. Later in this post I will also tell you why it is a good idea having another investing account besides your 401k, where you can invest on your own and why you should invest in your 401k only as much as to get your employer match and save the rest elsewhere. I will tell you why I decided to invest small portion of my contributions to 401k just to receive my employer’s match and the rest goes to my ROTH IRA and Investing-trading Account (this blog is a journal of my investing account only, but I am thinking to show my ROTH IRA account either on this blog or start another one).
If you do not have a lump sum of money available for investing in your own new account, you have only one way to go: invest a small amount of money every month. What strategy and what investment vehicles you should chose to start with? This is the most important question ever. You need a strategy, which will save you money on fees and commissions and which will help you to boost your savings, while still be as cheap as possible.
I tried several approaches before I came up with a strategy, which will be the most effective. Originally in my previous post I advocated to start saving in your savings account and after you save some substantial amount of money, transfer them to your new investing account. This approach didn’t prove to be the most effective to me.
I searched through the internet trying to find some feasible strategy and I have found a lot of great ideas and advice from aggressive growth trading, growth investing up to income investing. However, all of the strategies I found had something in common: all expected you to have an account with at least 10,000 of dollars or more and some income strategies even expected you to have 100,000 of dollars or more!
I also found some articles advising investing with small amount of 100 dollars a month. However, all advice I read about this investing approach revealed itself to be extremely expensive for a small investor like you or me.
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