Viscious Cycle: Don’t Make Enough Money to Invest, but Need to Invest to Make More Money (Technorati) Technorati | (Del.icio.us) Del.icio.us | (Digg) Digg | (Blinklist) Blinklist | (Comment) Comments (2)

How many of you don’t think you have enough money to start investing? Living paycheck to paycheck and keeping track of where every penny goes, you have enough trouble making ends meet from day to day, much less putting money away for a rainy day. Many of us that are just starting out, or perhaps starting over, might read this blog to get investment ideas for the future. Not seeing how investments can fit into our tight budgets in the present, we think all the advice we hear is for someone else, or for us to file away for “someday.”

While those of us that live on a shoestring budget are wise to be cautious, the truth is that we should not allow this caution to stunt our growth. Everyone has the potential to invest in their futures – we just may need to take different approaches.

I recently read an article on this topic entitled How to Invest When You're Broke, which provides some good advice for investors (or soon-to-be investors). In this article Harry Domash makes the point that even small investments can add up very quickly. For example, if you save $10 a week (maybe by sacrificing your daily Starbucks coffee) you could have as much as $10,000 after ten years if you choose the right investment.

So how do you get started? Domash advises that investors in this situation stick with more safe investments, such as mutual funds, which spread your money out. While most people automatically think of stocks when they first think of investing, if you only have enough money to buy one or two stocks this is a risky move. The key to lower risk is to diversify your investments. Putting all your money in one place is like putting all your eggs in one basket. As a result it’s probably best to play it safe until you reach a point where the fluctuation of the market can’t make or break you.

I’d like to hear any other advice you have – or if you have similar experiences share them! Remember - live for today, but plan your finances for tomorrow and make 22 dollars from your 22 cents.

22Dollars - Personal Wealth Management
Stock Quotes and Growing Personal Wealth by Managing Your Own Money! 22dollars is your online source for investment ideas, stocks analysis, business and other worldly issues. Geared towards the young professional, this site will be written by successful young professionals who are ambitious and driven to succeed in life, cause in the end - no body cares more about your money than you.

2 Comments - Post your comment below.

Joey L
Apr. 30, 2007

Hey Chad,

Very insightful post. It certainly applies to me. I think there are plenty of people out there that want to begin investing, but are scared because of their financial situation. Reducing the risk on investments helps :)

Floyd Upperman
Sep. 14, 2007

Its hard to let money go where there is no immediate return such as when you buy goods. Investing takes time and is rewarding in the long run.

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