Investing isn’t just for the wealthy. With less than a hundred quid, you can get involved and grow your money. Here are just five ways that you can invest a small sum of money and make a return.
A mutual fund investment could be a great place to put your money. These are funds in which multiple investors contribute money. Because lots of investors are contributing money, these funds generally come with a low minimum investment. A fund manager ( who you may have to pay a small fee to) runs the fund – this fund manager is usually an investment expert and decides how best to invest the bulk sum. Returns can sometimes be slow as any profit has to shared amongst all the investors involved in the mutual fund. However, in the long-term it can be a successful investment strategy.
Lending sites allow you to give out loans to other online users. The creditor pays back this loan in instalments with interest attached (which is where you get your return). You can choose the causes that you want to lend money to. Like a mutual fund, you can also split the cost with other investors. In fact, on many lending sites, there is no minimum investment, allowing you to contribute as little or as much as you like. Also choose a secure and established lending site so that you can guarantee a return.
There are apps out there that can help you to invest money with your spare change. Some micro-investment apps are able to round up every purchase you make to the nearest pound and then move the change into a special savings account. At the end of each month, the app then finds the best way of investing these savings to get you the best return. The beauty of this app is that it encourages you to not just invest but save up money.
If you’re looking for ultimate security and simplicity, putting your money in a savings account such as ISA could be the best option. There are all kinds of accounts out there with different interest rates and conditions (some may require you to make a minimum payment into them each month), so it can often be worth doing your research. Some savings accounts may prevent you from accessing your money for a certain length of time. This could be beneficial for those that think they may be tempted to dip into these savings unnecessarily.
Paying off debt
Paying off debt might not sound like a form of investment, but it can be. Most debts such as loans and credit cards collect interest and the longer it take to pay them off, the more interest collects. By contributing more money towards paying off your debts, you could cause your debt to be paid off quicker and pay less interest in the long run. You might not be earning any money, but you’ll be spending less which is as good as.