You don’t need to be wealthy to begin investing. If you only have $2,000 available to start growing your accounts, that is still enough to start creating a nest egg that can be worth a lot more in the future.
Every situation is different, so the final decision will always be yours to make. The first step you should take is to establish an emergency fund to cover unexpected expenses. Once you have that amount in place, then you’ll be ready for these additional options.
1. Open a Roth IRA
This investment option is available to all Americans who meet specific income requirements. You fund this individual retirement account with post-tax money, which means you can withdraw it at retirement without owing capital gains taxes. There isn’t a required distribution at either, which means you can keep letting the compounding work in your favor.
2. Take a Vocational Class
Side hustles are easier than ever before to manage thanks to the rapid speed of technological evolution we see in society. Platforms like Fiverr allow the average person to offer services without even needing a website to start making some cash. If you feel like you don’t have any specific skills to offer, then invest that money in yourself so you can turn it into more significant profits.
3. Invest in a 529 Plan
If you have a family, then this investing option makes sense for their future. It is an educational savings plan that works similarly to an IRA. You can invest in several different assets to let your money grow over time. Then you can take the money out when the kids go to college or for other specific educational purposes without taking a massive chunk out of your income. Some states offer upfront deductions or income exemptions.
4. Buy Dividend Stocks
One of the best dividend stocks available right now is the Ford Motor Company. If you have $2,000 to invest right now, then you can turn that into a return that will net you about $100 per year in dividends. It isn’t overly impressive at first, but you can compound that money into additional investments that continue to build dividends over time. You might even get some equity gains out of the deal to give your wealth a bigger push.
A corporate bond can provide reliable returns with the right investment. Some companies, such as Johnson and Johnson, have offered returns for over 50 consecutive years. Look for options in this category that will give you a performance that is at least double the rate of inflation to ensure that you get good value from the investment.
It’s never too late to begin securing your financial future. Whether you’re 25 or 55, the money that you save today can help you to achieve bigger and better things in the future. Take some time to review all of your options, and then put your finances to work today so that tomorrow you won’t have as many financial worries.