Here’s How To Start Building Wealth With Only $5
It’s easy to look at wealthy individuals and assume they started out with money. That makes sense, but then how do you explain the people like Geoffrey Holt, who worked low-wage jobs, yet left millions to his town upon his death? Or celebrities like Dolly Parton, Oprah Winfrey and Ed Sheeran, who started with nothing to speak of. Some of these people lived far more frugal lives than you might choose, and many others also started small and kept on going.
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Check Out: 4 Genius Things All Wealthy People Do With Their Money
Here’s how to start building wealth with only $5.
Wealthy people know the best money secrets. Learn how to copy them.
Start Small
Building wealth with just $5 seems pretty hopeless, but you can invest small amounts painlessly using an app like Acorns, Ally Invest or Betterment. You set the amount and frequency; the app deducts the money and invests it for you.
With some apps, the money that goes in, say $5 a week, earns interest. If you leave that interest alone, it will earn more interest. Keep it up until you have enough to invest in a few shares of stock that pays dividends. When those dividends come in, reinvest them in the stock. This will give you more shares. This, in turn, will result in more dividends.
You could also choose an app that allows you to purchase fractional shares, so you can start with $5 — or even less — even if you’re not generating interest before you start investing.
Learn More: Barbara Corcoran’s 5 Best Passive Income Ideas
Increase Your Contribution
Once you’ve started with $5, you can set your sights on a bit more each week, as you progress in your career or take on a side gig to bring in more cash to set aside. You could put it in a savings account, or better yet, get into CDs. The rates may not impress you, but they’re guaranteed.
After the CDs mature, again take the money you’ve earned, along with the money you initially invested, and roll it into a new investment. When you have enough saved, look around and see what other opportunities are open to you.
The trick to building wealth with small amounts of money is to be consistent, roll principal and interest into new investments and keep your eyes open for other things you might invest in as your investment fund grows.
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