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How to start investing in shares with little money

Tristan Harrison
steamroller, pennies, dangerous

Investing is one of the best things you can do for your long-term wealth.

But investing in property can take a lot of money to start investing. If you’re going to invest in property you probably need a deposit of at least 10% of the purchase price (which could cost a lot in lenders’ mortgage insurance). Even a 10% deposit amounts to tens of thousands of dollars. This is too much to save for people just starting out.

One option is to consider using an investment app provided by RAIZ Invest Ltd (ASX: RZI) (previously called Acorns).

What Raiz does is “invest spare change automatically from everyday purchases into a diversified portfolio.” You can choose to round-up purchases to the next dollar amount – so that extra $0.30 is invested for you – and/or you can set recurring daily, weekly or monthly investment amounts to set aside more.

Raiz invests in exchange-traded funds (ETFs) on the ASX. ETFs are diversified portfolios of many shares which you can buy in a single investment. However, Raiz does come with fees and the ETFs would also presumably be charging fees too.

The best investing for little money 

You can take matters into your own hands by investing as little as $500 through a share broker like Commonwealth Bank of Australia’s (ASX: CBA) CommSec, National Australia Bank Ltd’s (ASX: NAB) NABtrade or any other provider.

That’s one of the best things about shares – you can invest with very flexible amounts. You could decide to invest $500 or $10,000 (or more) per transaction. Bigger amounts mean you’re paying less in brokerage in percentage terms for each investment.

Which shares should you invest in? Well, that’s what people spend lots of time thinking about. You could go for some of the brightest growth prospects on the ASX like Pushpay Holdings Ltd (ASX: PPH), Altium Limited (ASX: ALU) and Webjet Limited (ASX: WEB).  

Or, if you want to play it safe you could go for businesses with reputations of performing better than the market when it drops such as Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), Magellan Global Trust (ASX: MGG) and Ramsay Health Care Limited (ASX: RHC).

The post How to start investing in shares with little money appeared first on Motley Fool Australia.

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Tristan Harrison owns shares of Altium, MAGLOBTRST UNITS, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of PUSHPAY FPO NZX. The Motley Fool Australia owns shares of and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of Altium and National Australia Bank Limited. The Motley Fool Australia has recommended PUSHPAY FPO NZX, Ramsay Health Care Limited, and Webjet Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019