9 Smart Ways To Invest $300
“I don’t have enough money to invest!” That’s one of the most common reasons and misconceptions for not starting to invest.
Unfortunately, if you don’t start now, you”ll be missing out on the most valuable resource you have, time.
In this post, I’ll share with you 9 places you can invest $300 or less.
1. High Interest Savings Account
If you have not build up your 3-6months worth of living expenses for your emergency funds, save the $300 into the fund! Don’t underestimate this $300, it can keep you alive a couple of weeks if you get retrenched!
Stash your whole bag of emergency funds into high interest savings accounts to maximize your sleeping cash!
You can compare between high interest savings accounts here.
2. Peer to Peer Lending
Singapore’s online lending platforms is an option you can consider investing your $300 in. They provide you with a platform to fund individuals and businesses. An example of these online platforms is Funding Societies.
It has a minimum investment of only $100 with returns of up to 14% per year! Lock in periods ranging from 1 to 24 months.
3. Your CPF
You can top up your own CPF Special Account and earn a return of 4%.
Imagine if you invested this $300 at 4% for 40 years, the power of compounding helps you to grow it to $1,440, that’s about 380% increase from your initial investment!
The only downside is that you have to wait till you are 55 or 65 years old to withdraw your money.
Have you heard this saying that goes, “Invest in yourself, it pays the best interest.”? Well it’s hard to belief but it’s true!
Upgrading your skills and knowledge through reading books and attending courses(online and offline) can not only increase your employability but give you ideas on how to generate more money.
If you are 25 years old and above then you’re in luck!
SkillsFuture is an initiative by our government to support us in our lifelong learning journey! You are given $500 worth of credits to attend courses!
5. Start A Business
“Huh? Can I really start a business with $300?”
Yes! Since everything is online these days, you don’t need much to start!
You can also start a business by flipping items, meaning buying and reselling them at a profit on online platforms like Ebay, and Carousell.
Another option you can consider is flea markets. You can sell the stuff you no longer use and renting a space, table and chairs will definitely cost you less than $300.
6. Individual Stock
In Singapore, the minimum amount of stocks you can buy is a 100. So with $300, you can only invest in stocks that cost less than $3, provided brokerage fees are free.
Alternatively, you can open an online brokerage account overseas such as ThinkorSwim to invest in the United States stock market. The U.S Stock market allows you to buy 1 single stock instead of a hundred at one time.
Investing in the right stock can potentially earn you much higher returns than the market!
If you don’t have the time or knowledge to pick stocks, don’t worry here are several options for you!
7. Exchange-Traded Funds(ETFs)
An Exchange-Traded Fund(ETF) is an index fund that is listed on an exchange. An index is a basket of securities such as stocks and bonds. An example of an index is the Straits Times Index (STI) which consists of the top 30 stocks in Singapore.
The advantage of an ETF is that you can diversify your risk into a basket of multiple stocks, so if a couple of stocks are declining, the rest of the stocks that are rising can offset the loss.
The 2 STI ETF listed on the Singapore Exchange (SGX) are SPDR STI ETF and Nikko AM STI ETF.
You would think investing in 30 stocks through an ETF seems expensive, but guess how much each ETF cost? Only about $3!
But since you can only buy 100 shares at time, it’ll cost you about $300.
8. Regular Savings Plans
A Regular Savings Plan uses the Dollar Cost Averaging Strategy which invests a fixed amount of money into buying units at regular intervals of time.
This means you will buy more units when prices are lower and less units when prices are higher. As the stock market rises over the long run, your average buying price will be lower than your average selling price, making you a profit when you sell your units.
Regular Savings Plans can also be seen as index funds as they track the index, similar to an ETF except that it’s not traded on an exchange.
So if you can’t buy an index fund from the stock exchange, where can you buy it?
You can buy it from Financial Institutions like banks and brokerages. Here’s a list.
- POSB Invest-Saver,
- OCBC Blue Chip Investment Plan,
- POEM’s Share Builder’s Plan,
- Maybank Monthly Investment Plan.
At only $100/month, these plans are incredibly affordable.
9. Actively Managed Fund (Unit Trusts)
Another alternative is to invest is in an actively managed fund or unit trusts offered by financial institutions.
Actively Manged Funds are managed by professional fund managers. They buy and sell securities in an attempt to beat the performance of a particular index.
Banks such as OCBC’s Frank allows you invest in unit trusts with just $100 per month.
Also, almost every insurance company offer their own type of investment plans that can offer less than $300/month types of investment.
It’s extremely important that your financial planner go through the fees and the other complexities of the plan with you.
As each investment plan is different, it’s best to seek advice from a trustworthy financial advisor.
Hope that I’ve given you some ideas that you can start acting right away!
Remember, “The best time to plant a tree was 20years ago, the 2nd best time is now”.Image Source: asiarisingtv