Many people may think that it is not possible to invest with little money, and this misconception makes them spend their little capital and not invest. There are various methods of investing with little money, which we will continue to examine so that each person can choose one of these methods according to their own circumstances.
investing in bank
As we mentioned in the investment risk section, bank deposits are among low-risk investments. Although this method is low-risk, due to the increase in the inflation rate and the decrease in the bank interest rate, especially in recent years, it gives little profit to the depositors. But anyway, for a long time depositing in the bank was one of the methods of investing with little money that had its own fans and still some people are willing to use this method.
Stock market activity
Other investment ideas with little money are activities in the stock market and capital market. You may not believe it, but the minimum investment amount in the stock market is only 500 thousand Tomans. That is, with only 500 thousand tomans, you can become a shareholder of a joint-stock company and by participating in the meetings of the ordinary general assembly, you can be present in the decisions related to that company and use your right to vote. You should pay attention to this point
Investing in the stock market is a complex and risky process that requires training and knowledge. Here are some of the main things to invest in the stock market:
1. Getting to know the listed companies: Before investing in the stock market, you should familiarize yourself with the listed companies and their performance. For this purpose, you can check the financial information of the companies and pay attention to the news and reports related to them.
2. Investigating technical and fundamental analysis: Technical and fundamental analysis are two important methods for analyzing companies and the stock market. Technical analysis, based on price charts and trading volume, is an analysis that is used to predict stock prices. Fundamental analysis, on the other hand, is an analysis used to estimate a company’s value based on information about company performance, profitability, market growth, and other factors related to the company.
3. Risk management: Investing in the stock market always involves risks, so you must be able to manage the risks associated with your investment. For this purpose, you can use different methods such as diversifying the stock portfolio, limiting the amount of investment in a particular company and using derivative instruments such as futures and options.
4. Time management: In investing in the stock market, time management is also very important. You should pay attention to the time of entering and exiting the market, and if you need to invest in the market, you should use market monitoring tools and related signals.
5. Review of investment costs: Various costs such as broker fees, duties and taxes related to investing in the stock market should be carefully reviewed. High costs can reduce the return on investment.
6. Setting up an investment plan: In investing in the stock market, you must set up a plan for your investment and stick to it. The program includes investment objectives, risk level, investment strategy and timing of entry and exit from the market.
7. Understanding the impact of various factors on the market: In investing in the stock market, you must check the impact of various factors such as economic developments, political news, market conditions, etc. on the stock market.
In general, investing in the stock market requires knowledge of various factors, and decisions must be made accurately and with full information according to these factors.
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◊ Also read this article: Free stock market training from zero to one hundred
Investment funds are another way of investing with little money. Fixed income funds carry less risk and equity funds carry more risk. You can choose the right fund by comparing investment funds.
In the following, we introduce some safe investment funds with higher interest than bank deposits.
Kian Fixed Income Investment Fund
Kian Fixed Income Investment Fund is suitable for risk-averse people and acts like a short-term bank deposit. The yield of this fund in 2019 was equal to 33.5%.
Avai Saham Kian Investment Fund
Kian’s Voice Fund is a stock fund that is considered a good alternative to buying stocks directly. This fund has had a return of more than 3000% since its inception.
Song Investment Fund Kian Shares
Kian Stock Song Fund is another stock fund that has yielded 650% return since its inception.
Investing in gold and coins
Another way to invest with little money is buying and selling gold and coins. Gold has always been one of the popular investment options among different strata of people and carries little risk. But since the price of gold is influenced by the global market, always monitor the global news affecting the gold market when buying and selling gold and coins. The Kian Gold Investment Fund is also a suitable alternative for buying physical gold, which has had a return of more than 460% since its establishment.
Invest in a car
If you still ask yourself, where should I invest with little money?, we must say that buying domestic and foreign used cars and selling them at a higher price in the future, polishing and repairing cars, and renting classic cars are among the methods of making profit from the car market. .
Buying land and property
Although buying property is not a low-cost way of investing, but using methods, you can enter this field with little money. Among the methods of investing with little money in the field of real estate, buying land, pre-purchasing real estate, buying real estate from cooperatives and paying its price in installments, etc. Is.
One of the other investment ideas with little money is to work in the global Forex market, which is currently known as the largest financial market in the world. But since there is no limit to the range of fluctuation in this market, one may suffer huge losses in case of improper performance. For this reason, working in forex requires the acquisition of sufficient specialized knowledge in this field.
Investing in digital currency
Digital currency or cryptocurrency in the form of CryptoCurrency or encrypted money is decentralized and built on the blockchain platform. The purpose of designing cryptocurrencies is to increase security and prevent currency fraud and eliminate middlemen between buyers and sellers. But the activity in this field carries a lot of risk for investors in this field.
◊ Also read this article: Free digital currency training (from zero to one hundred)
Another way to invest with little money is to buy government bonds. These papers include debt papers and Islamic treasury documents. Islamic treasury bonds are sold for an amount less than their nominal value, and at the end of the contract, an amount equal to the nominal value of these bonds is paid to their owners. In the case of debt securities, the government undertakes to pay an amount as interest to the buyers at a certain time. Buying bonds is a low-risk method that brings little profit.
Buying and selling dollars is another investment method with little money that has its own fans. The foreign exchange market is very risky and one of its risks is the increase in purchase requests during seasonal trips and pilgrimages. Also, the presence of brokers is very effective on the fluctuations of this market. But by investing with a long-term view, the risk of the currency market is reduced.
Although it is not possible to start a big business with little capital, but to invest little money in the field of business, you can start a small business and gradually develop it. In this way, your risk is also reduced. Among the small businesses that can be started with low capital, home businesses can be mentioned.
What is the purpose of investing with little money?
At the beginning of this article, we stated that the purpose of investment is one of its most important pillars. Depending on whether your investment goal is to make a profit or preserve assets or both, and according to your risk tolerance and time horizon, you will have several options for investing with little money.
Where should we invest according to our budget?
Where should we invest with a budget of less than 10 million tomans?
You can invest 10 million Tomans to start a small home business or to enter the stock market. But in both cases, you should first do the necessary studies and estimates.
Where should we invest with a budget of 10 to 20 million tomans?
If you have a budget of 10 to 20 million tomans, you can invest in home business or stock market as before. Of course, you will be more profitable in this case.
Where should we invest with a budget of 20 to 50 million tomans?
With a budget of 20 to 50 million Tomans, you can enter the gold and coin market, also, options for home business and activity in the stock market are still included in our proposed package.
Where should we invest with a budget of 50 to 100 million tomans?
With a capital of 50 to 100 million Tomans, you can enter the stock market, gold market, coin or digital currency market. If you are thinking of starting your own business with this money, you can change it from home to a small workshop and develop it.
Where should we invest according to our risk taking power?
If you have a high risk tolerance, you can invest your money in the field of digital currencies, buying and selling currency, as well as operating in the stock market and stock funds. But if you are a cautious person with low risk tolerance, you can use fixed income funds, bank deposits and property purchase for investment.
Investment challenges with little money
The issue of investing with little money is mainly raised for the middle or poor class of society. But what challenges do these people face that many times they cannot invest with their own money?
Underestimating the investment amount
Many people consider small amounts insignificant and do not draw any plan for investing with little money. This way of thinking leads to the emergence of emotional and irrational behaviors when low capital enters a person’s life.
Unbalanced financial balance
People belonging to the poor strata of the society mostly owe more than they have assets. If these people get a little capital, they will mainly spend that money on their previous debts and will not be able to invest or save.
Unforeseen costs are imposed on people when one of the household appliances, such as a refrigerator or TV, breaks down. In this case, a person has to spend his entire savings to replace such not so cheap devices.
Temptation to buy
Another challenge of investing with little money is that if a low-income person earns capital, he prefers to buy a useful and valuable product such as a mobile phone.
Lack of capital infrastructure
Another obstacle to investing with little money is that financial institutions have a discriminatory treatment with little capital. For example, bank interest is high for small loans, and overall, the “cost of capital” is higher for low-income people than for the rich.
Short-term and long-term investment
Investments less than three months are considered short-term, between three months and one year medium-term, and investments more than one year are considered long-term. Of course, there are different definitions for investment time frame. But the important thing is to determine your time strategy before investing.
To stay safe from market fluctuations and possible risks, we recommend that you choose a long-term strategy for your investment. But if you can’t hold onto your money for a long time, take advantage of short-term investments.
Essentials of successful investment with little money
Investing with little money has requirements, which we will discuss below:
Acquiring specialized knowledge
One of the essentials of successful investing with little money is to acquire enough knowledge and skills to be present in the market you want.
Long term vision
Patience and a long-term view of investment are other requirements for successful investment with little money. Long-term strategy reduces investment risk.
Investigating the level of market risk
Before investing in any market, evaluate the risk level of that market to adapt your risk tolerance to it and enter that market if you wish.
Identify the right market
Check all the financial markets and analyze their performance from the past to today and see how much their returns have been. Then, enter your target market.
Liquidity is one of the most important requirements of investing with little money. For example, after selling shares in the stock exchange, the money is deposited into the person’s account up to two working days later, and in this way, the stock market has high liquidity.
Investing with little money seems impossible for many people. Although it is not possible to buy property or land with little money, the good news is that the methods of investing with little money are very diverse and everyone can invest with a little savings of their monthly income, even with amounts less than one million Tomans, and make a profit. Get accepted. But as a person who intends to invest with little money, you must be realistic and get rid of the expectation of making huge profits in a short period of time.
Important elements of investment
Investment, regardless of its amount, is a necessary thing in everyone’s life. But a person who has such an intention must first of all determine his goals, measure his conditions and also evaluate the conditions of his investment subject in order to achieve the desired result. In the following, we examine the most important factors affecting investment.
The amount of risk taking
In the article comparing low-risk and combined with risk investment methods, we stated that the rate of return of an investment is directly related to the level of risk-taking of the investor. For example, fixed income funds are considered a low-risk way of investing, but investing in the stock market is considered a high-risk way. Therefore, you should choose the right investment field according to your risk tolerance.
Purpose of investment
Your investment goal is also an important factor in choosing an investment method. For example, if a person intends to invest with the purpose of making a profit, his performance will be different from a person who invests with the purpose of preserving assets.
Investment interest rate
Some investment methods are more profitable than other methods, but at the same time, they impose more risk on the investor. For example, depositing in a bank is a low-risk method, and the profit from it is lower than the stock market, which is a very high-risk method.
Liquidity means how quickly and at what price you can convert your investment into cash. Liquidity is an important element that can be effective in choosing an investment method. For example, a bank deposit has high liquidity, but the sale of property and land is a time-consuming process and may take months.
Financial conditions of the investor
Another important pillar in investment is considering the investor’s financial conditions. As an investor, keep in mind that you should never risk your entire property, but by estimating the monthly installments and daily expenses and deducting these expenses from your monthly income, spend the remaining amount on investments so that you don’t have trouble meeting your daily expenses. don’t be
The age of the investor
A person’s age is also one of the important pillars of investment. For example, consider a person who, at the age of 25 and at the peak of risk-taking and experiencing excitement, intends to invest in the hope of earning more profit. On the other hand, consider a 65-year-old person who invests after retirement with the aim of preserving his capital. As you can see, the approach of these two people will be very different from each other.
Acquiring investment knowledge
Another important factor that you should consider before investing is to gain enough knowledge about each of the markets to operate in that market. For example, in order to operate in the stock market, you must first learn how to get the stock code. Also, if you intend to invest in investment funds, you should also know the types of investment funds in Iran. You can also strengthen your investment knowledge by entering the Rehvard website and participating in the Rehvard Academy training courses.
Short-term, medium-term and long-term investments each require their own strategies. If you cannot afford to lock up your assets for a long period of time, choosing long-term methods is the biggest mistake you can make. Also, expecting huge profits in the short term is also a misplaced expectation. Therefore, you should include the time factor in your investment to achieve the desired result.
In which financial markets can you invest with little capital?
With a small capital, you can invest in banks, investment funds, gold, coins, stock exchanges, digital currencies and forex. The information about the yield and the latest transactions of the funds can be obtained from here.
What is the best suggested strategy for investing with little money?
Regarding the best solution for investing with little money, it is not possible to apply the same prescription to all people. But each person can choose the best solution by examining the investment pillars and evaluating his own conditions.
What are the most important pillars of investment?
The level of risk tolerance of the investor, the purpose of the investment, the interest rate, the amount of liquidity, the financial conditions and the age of the investor, sufficient knowledge in the field of investment in the target market, and also, time are the most important elements of investment.
Is it better to invest in our business with a limited budget or in the financial markets?
You can invest your money, however little. If you have a small home business, this small investment will be effective to boost your small business. Also, you can invest this money in financial markets. But since the amount of this money is small, to increase its profitability, you can enter high-yield markets that require high risk, such as the stock market and digital currencies.
Investing with little money is very challenging and for many people, it seems impossible. But knowing the pillars of investment, target markets, the risk of financial markets and the returns of each market and many other things, helps the investor to choose the best platform. Also, a person may invest his funds in several financial markets in parallel or spend it on developing his business.