Today, we have five different tips that’s going to help you start investing your money and slowly roll it up like a snowball effect so you can thrive in your 30’s. You need to learn how to invest money when you’re young in order to create long term incomes.
When you’re in college, you typically don’t have that much money. You’re partially receiving money from your parents, partially receiving money from financial aid and then a couple of side jobs and then that you’re taking to cover your daily expenses and also your tuition expenses.
You, at that age, should start thinking instead of getting an iPhone, which is very cool, maybe you can do a lot of things with that money. Is having an iPhone functional to help you get where you need to? And the answer is yes.
Ideas to invest your money
With the $1,000 that brand new phone is worth, you have a thousand dollars to invest instead. There are multiple ways where you can start small investing your money and then bring it all the way up to the next level. Let’s list the ways that you can invest money in your 20’s:
1. One of the very first to do that is through a platform called stockpile. Stockpile, it’s a platform that allows you to buy fractional stocks. For example, you saw a stock like Apple.
Apple it’s a little too much for you to make the most out of your $1,000. What you do is that you buy a fraction of it and then you slowly continue to buy more as time progresses. That way you can make the most out of your money.
2. The next it’s a platform that is called Robin Hood and maybe you had already heard about that at some point in your life, but Robin Hood, it’s a stock trading platform.
What you do is that you can buy full stocks and you buy them without having to pay any commissions. Most platforms tend to charge you commissions for it. If you’re a brand new investor and you’re trying to get yourself acclimated with everything that’s going on, I think Robinhood is definitely a great platform for you to start investing your money.
3. The next one it’s a platform called Wefunder. For those who don’t know about Wefunder, it’s basically a crowdfunding site.
Whether it’s a service or whether it’s a product, with Wefunder you have the option to invest in a company before they go public.
If a company that is pitching you the latest technological product out there and you really like what they had to offer, you think is going to be a great value-add to society and you decide to invest a certain amount of money. What happens when that company grows and eventually goes public, you’re going to get priority to get assets to shares in that company before it even goes out to the public.
4. The fourth one is called Fundrise. What Fundrise does is that they buy a chunk of portfolios. They go in and they buy lots and lots of properties.
What they do is that they pitch it to investors and they receive money. It’s similar to Wefunder, but this is heavily focused on real estate. They have a minimum, of course, and then each quarter, what they do is that they pay out dividends for you and then the money you invest.
How to navigate on these platforms?
These are the four platforms we recommend you to check. Now, bear in mind that for Stockpile and for RobinHood, you can actually download an application and you can start trading from the comfort of your phone. Either way is fine.
What exactly is stockpile? It is a way for you to trade on fractional stocks. It shows you that you can start investing with just as little as $5 and you buy fractions of over 1000 stocks and ETF and it’s free to sign up and you don’t have to keep up with any monthly fees or a minimum.
For those who have more money to invest, let’s explore all these other platforms. Ideally, you could do a combination of all four, but if you can, then you can start testing the waters with Stockpile.
As you start accumulating money with interest and company gains, then you can decide whether you want to transition into something that will require more capital view or if you want to continue just on this site.
Just invest in any amount you want. You also have the possibility to give stocks to other people. Then you can learn as you go. Kids and teens can track their stock 24/7 and place trades that you approve
Ideally, you will want to have the flexibility to diversify your stock portfolio. You definitely don’t want to put all your eggs in one basket. For that, you can diversify them by buying fractional shares in Stockpile. For example, for a stock in Google or in Alphabet, you can just choose to allocate $30. For Microsoft, you can choose to allocate $75, and then Coca-Cola $20. Eventually, it’s going to grow over time.
Robinhood is more than just for stock and funds. There are numerous options. You can even trade Crypto.
They started gaining a lot of market share and over time, their competitors, they had no option but to get on board with the no trading fee practice.
You can feel free to sign up. It’s free to sign up and break free from commission fees. You can make unlimited tradings and you don’t have to worry about any commissions.
They do a pretty good job explaining what you can do in here. The beauty of this is that you can actually learn a little bit about money, buzzworthy. They have a good platform that can teach you and get you educated on the subject of investing.
This website allows you to actually invest in multiple startups and companies. There you have a company that focuses on spirit, another one that focuses on AI (artificial intelligence).
Whether you want to invest in a little bit of everything or business that are heavily focused on technology or main street, alcohol, hardware, software, entertainment, retail.
They are a disruptive brand that is changing the household cleaner industry. They have a team of seasoned professionals driven to build a successful non-concessionary impact company. As you navigate the website, you will see that each company is different. Some companies require a minimum of $100. Some require a minimum of $5.
What exactly is Fundrise? They introduce themselves with the phrase: “Finally, a real alternative to investing in the stock market.” You are investing in real estate, you’re investing in a portfolio without getting your hands dirty. For those who either want to invest in real estate, but they don’t have the capital to do, so this is one way for you to do it.
Or you can be one of those people who have the capital to start investing in real estate but perhaps you don’t have the time or maybe you don’t have the energy to deal with tenants or property managers or inspections or anything to that matter. This is a sophisticated way for you to invest in real estate from the comfort of your home.
Fundrise provides you with a lot of market research information. It helps you understand and every time your portfolio acquires a new project, they send you a report, they send you the logistics, the numbers, and everything you need to know so you can stay on top of everything that you are doing.
Invest your money: Short and long-term results
About the long term growth, it’s kind of unpredictable. You have to ride the ups and downs, just like you do with the real estate market or the stock market. Think of it as buy and hold. Every here and there, the market, it’s going to have to face some dips.
In the short term, there’s a possibility that you may lose some money, but as long as you’re holding your portfolio for a long time, then you can see the gains overall.
In the long term, you will notice how your initial little investments started to grow and now you have to manage an important investment you did yourself for your future.
- Strategies: You have four different platforms and you have $1,000. How can you make this work? Let’s assume you’ve started doing this in your 20s. From this $1,000, you can easily distribute this into these four different categories. You can start investing $200 and then you’re probably doing an additional $200.
You have now $400. For Wefunder and Fundrise, their minimum is typically about $500. Depending on the type of company that you’re investing. For Wefunder and Fundrise, it is a $500 minimum guarantee.
What you need to do is that out of that $1,000, you’re going to allocate $500 in each of those platforms. You’re going to take Fundrise and you’re going to allocate $500.
Every single month, you’re going to allocate little amounts for your new investment portfolio. Imagine the amount of money you can actually end up with, thanks to compounding interest. If you don’t know what compounding interest means, it just basically means interest adding up on top of one another, rather than just simple interest.
When you turn 25, you will have accumulated five years for interest to grow over time. With this, what you’re going to do is that you’re going to apply a technique called house hacking. Imagine you bought a house or an apartment, and it has four bedrooms, and you can put a roommate or two or perhaps even three. What you’re going to do is that you are all going to live in the same place but then you’re going to rent out the rest of the bedrooms.
Assuming you do get a house with four bedrooms, then you live in one. The remaining three, let’s assume you’re renting each room for $500 a month. That means that at the end of each month, you are already collecting $1,500 that’s going to go straight towards the mortgage payment of your brand new house, and then you pay for the difference. This is how you apply house hacking technique by sharing it with your friends or roommates.
Assuming you do this for another five years and you pay down your mortgage aggressively by leveraging the money for your roommates or your “room tenants” and paying a lot out of your own pocket. You have accumulated sufficient equity down the road. Then what you’ll do you can either do a HELOC or you can do a Cash-out refi.
That is a good idea and you could do this for years and you will see how, when you turn 30, you will have achieved a lot for your real estate business.
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