Looking for good investments ideas for small investors? It is not a widely covered subject because investing is usually considered a “big shot” activity involving a lot of money, cigars and expensive suits! At least… in the movies!
But, as a small investor myself, that’s a question that often came to my mind. It took me years to finally find my way and find investments ideas for a small investor like me that suits me well.
Here are several investments ideas for a small investor :
Real estate?? Hell no! We’re talking about small investments. Yeah… I know. We all know someone who knows someone who became millionnaire with real estate. But is it for small investors? I don’t believe it is.
One shouldn’t consider investing in real estate without at least a net worth of 100,000$. That’s the minimum required here in Canada to buy a 5 units or more rental property. And if you want to buy a single unit or a 2 to 4 units, you’ll need at least a 20% cash down anyway.
That’s a lot of money that most people don’t have handy. And that’s also a lot of money tied into one single investment which is a lot of risk.
Real estate investing is a job anyway. You’ll have to deal with tenants, you’ll have to collect the rents (many don’t pay on time), deal with the proverbial leaky toilet, sign lease contracts, go to court sometimes, deal with contractors…
But, for a serious investor with a passion for real estate, it can be a great way to build your wealth pretty fast (10-15 years).
Dividend growth investing
That’s one of the techniques I use to build my wealth. Basically, I amass 1200$-1500$ in my brokerage account, then I pick a company who has a policy to not only pay a dividend every quarter but also to raise it every year at a rate higher than inflation.
My goal is to pick stocks paying a dividend of 3,5% with a year to year dividend growth rate of +/- 8%.
I currently have 1065$ in passive dividend income. I have amassed that in a year with monthly savings.
Not bad! But to be able to save that amount of money every month, one have to be pretty disciplined and willing to cut costs. I do it because my dream to he financially free surpass my desire to buy and own luxuries.
I don’t care to own a two or three stories house with 3 bathrooms, five bedrooms and a spa if I have to work 12 hours a day for the rest of my life. I won’t enjoy it… I won’t be there to enjoy it. I prefer owning a small cozy bungalow, to pay down my mortgage at the speed of light and to live there almost for free forever!
Dividend growth investing is a robust strategy, but it takes a lot of time and discipline to see the results.
Invest in developing online sources of income
Okay… Saving 1500$ per month might not be feasible for you. Still, you’d like to invest. You could then DRIP or investigate brokers like Loyal3 who let you buy partial shares for as low as 10$ per transaction. One could build himself a nice portfolio that way and many do.
But, if you really don’t have money but a lot of time, you could start developping yourself online sources of income. It’s inexpensive and it’s fun!
I currently make between 15-30$ per month with this blog. It’s not a lot but it took me a while to learn the basics and to focus my time on what makes money. I expect my income to grow over the next following month.
It’s important to be patient if you want to make money blogging. That’s not something that happens overnight but it’s feasible. In fact, I’m in contact with many bloggers making a decent income online (from several hundreds to 10,000$ per month).
I monetize my blog mainly with Google Adsense but plan to create a website soon who will be fully dedicated to making money as an affiliate. It might complicate my tax a little because Uncle Sam likes to put barriers to Canadians… Most companies are based in the US and to become an affiliate they ask for a ITIN (kind of a social security number for foreigners) and to get that you either have to go through an authorized agent (usually big accounting firms offer the service but at what price) or you can fill out the form by yourself and mail your passport to the US government (yeah… sure).
The same applies if as a Canadian I want to sell ebooks on Amazon. I need a freaking ITIN in order to get paid or to avoid the 30% tax provision that IRS will keep.
Anyways. Making money online is feasible but it’s easier for US citizens for sure.
One could write and sell ebooks on Amazon, Clickbank or directly from their website. One could also monetize their website through affiliate sales or with the help of pay-per-clicks adds programs like Google Adsense.
These are the most common ways of making money with a small investment. I call this an investment because there is a startup price. You’ll usually have to pay hosting and for your dot com to setup a website that you will the be able to monetize. The investment is usually small (less than a 100$ per year) and the return can take quite some time to show up but that’s an interesting idea for a small investor.
If you are interested in affiliate marketing and making money online, I suggest you go see this website :
I really don’t know a lot about peer-to-peer lending and have personally no interest into it. But I know that a lot of folks out there use it as an investment vehicle with great success.
One of my fellow blogger and dividend growth investor seem to like it a lot and could tell you more about it. I suggest you should take a look at it peer-to-peer lending page for more information about it.
Invest in property
Big or small investors share something very important in common. They invest in property. If you build yourself an asset, could it be a software, a song, a book, a patent, a blog or even a movie, it’s going to be yours forever and you can collect money from it forever too. If you decide to buy an asset, the same applies.
For sure, owning property comes with some risk, but the reward can also be greater than if you just stack your money into an insured bank account or treasury note.
Each and everyone of us have our own tolerance to risk and our own interest in different fields too. I don’t like to deal with tenants and I love to write. You might hate to write and love to deal with leaky toilets. The important thing to do is to stick with what you love and to start now. Compounding takes quite some time. It’s better to start now small than to wait. Time is money!
I have to decided to invest both in dividend growth stocks and to create online passive sources of income. Both strategies require some patience and a lot of free time but I’m sure that two or three years from now, I’ll be more than happy with the fruits of my work. Until then, I plant seeds and let them grow slowly but surely into a forest of money!
Any other ideas for small investors?
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