The Practical Solution to Begin Investing With No Money

Updated – 11/3/23

Although it’s not easy to start investing with no money, it certainly isn’t impossible. Keep reading for tips to start your investment accounts now!

There is one saying that you hear many people allude to, and that is, “it takes money to make money.” And while that may be somewhat true, it doesn’t mean you have to be rich to find a way to start investing. In fact, investing with no money is far more common than you may think.

Millennials are far more worried about work-life balance than any other past generation. Because of that, more and more folks are thinking early in their lives about investing for retirement or supplemental income, even when they don’t have a ton of extra money lying around to invest.

So, is investing with no money impossible? Absolutely not. Are you going to be able to get rich and retire at the age of 35 with a limited amount of income? Again, absolutely not.

It’s easy to look at a single share of NVIDIA (NVDA) that is valued at over $400, or bitcoin being valued at over $35,000 apiece, and be instantly turned away from investing. Just because trendy investments are expensive doesn’t mean yours have to be.

I have a few tricks for you if you are struggling with this

Keep reading to see exactly how you can start investing with no money and find the courage to start planning for your future today!

It’s okay not to be a big player right away:

Listen, this is honestly one of the best pieces of advice I can give anyone. I don’t care if you have $5 or $5,000 dollars to start investing, it’s a good idea to start small for many reasons. Just like anything, you don’t want to put too many eggs in one basket.

The biggest reason, you’re still learning the game, and this is real money. While you should never invest money you aren’t okay losing, you also want to give yourself the best possible chance to succeed. No one starts an investment account planning to lose it all. If you were going to enter a free throw contest, would you just show up and compete? Or would you take a few days before (at least) and make sure you get some practice shots up?

Not only is starting small a good idea, truthfully, but a simulator also isn’t a bad idea either. Especially with stocks, a simulator will give you some experience at buying and selling, as well as watching the market.

The second reason to start small even if you have a ton of money is that you want to give yourself some flexibility as you learn the game. Trust me, you’re likely to get addicted when you start this, and you’ll find yourself reading more than you ever have in your life. This isn’t a bad thing, but you’ll want to leave some money to invest in new things as you learn.

Here is my suggestion if you want to start investing with no money.

  1. Once you decide to start investing, start a simulator account and begin making fictitious trades, but treat it as your own money.
  2. As soon as you start the simulator, start sitting back money each week. It doesn’t matter if it’s only $5 a week; start setting it in a separate account so you can deposit it when you’re ready.
  3. I recommend at least three months on the simulator. That would be ~12 weeks and should give you enough time to save at least $60 to invest.
  4. Once you are finally ready to make the plunge, after researching what trading platform and what stock or stocks you want to invest in, move the money into that account.
  5. Last but certainly not least, move forward and invest the money. If you only have $60-100, I would say at least invest 25% or more of the money, but no more than 50%.

It’s a big plunge to go from no money to any amount of money in an investment account. I remember when I started, I looked at it 20 times a day. If you are investing with no money, that means the money in that account is that much more valuable to you.

The key takeaways from this section: don’t invest anything more than you’re willing to lose and make sure you start small so you get through the learning curve.

Take advantage of the easy money:

One of the easiest ways to start investing with no money is actually through your own employer. Not only do most companies offer some type of retirement plan program, but they also will typically match or contribute a portion towards your retirement as well. You read that right, this is the closest thing to free money you’ll ever see.

I worked at a distribution center in college, and even for student help, the company offered a four percent 401K match. I remember telling my dad that I didn’t want to lose four percent of my check and it was such a small amount it would never matter.

He let me know right then and there how wrong I was, and boy was he right. I worked at the distribution center for four years giving back four percent of my check and then matching it. When I left, the account was at roughly $2,500, I looked today, and it’s valued at over $10,000 currently without a single contribution in over eight years.

The biggest reason to always participate in a company retirement plan is free money. Anytime a company you work for offers a match contribution, you make sure you take it. For you to not be enrolled in that program, there would have to be an all-hands-on-deck emergency for why you need that extra money in your check.

The second reason: investing in your company is actually a great way to start. You really don’t feel the loss of income because it’s taken directly out of your check. Also, your company usually has a platform that manages the money for you. Whether that be Fidelity, Vanguard, or any other type of financial institution that handles retirement accounts. That is just an extra layer of safety when you begin investing with no money.

Typically, in a company-offered retirement program, you can set up a percent of income, or an exact dollar amount to take per check and put into the account. I would highly recommend using a percentage of your income, that way as you get raises, the amount going into the investment grows as well, and you won’t really even know what you’re missing.

A lot of people don’t consider a company 401K as an investment, but it can be just as lucrative as trading stocks, and is easy to begin, especially when you are investing with no money.

Dividends are your friend:

Another excellent tip for investing with no money: remember to look at the dividends of the companies you want to invest in. A dividend is a payment to an investor from the company that is a way of sharing profits. These typically will come in the form of cash and can be a fixed payment or a variable percentage.

One example would be you own 15 shares of stock XYZ that pays a $3 per quarter dividend. That means four times a year you would receive a payment of $45 into your investment account.

Another example would be a dividend percentage. These typically fluctuate, and a good company will try to increase the percentage. Let’s say you own 10 shares of stock ABC valued at $10 a share with a 4% dividend in the first quarter. 4% of $10 is $0.40, and then multiply that by your 10 shares for a dividend payment of $4.

These are both just easy-figure examples, but you can see how a high dividend stock can be beneficial, especially if you are investing with no money. Remember, investments with a higher dividend will typically have a lower return, but when investing with no money, this strategy can help you build capital.

Not only do you get the gains from the actual stock going up, but you also have incremental cash flow hitting your portfolio each quarter (the dividend) which is for you to do as you please. I would always recommend re-investing your dividend payments; it doesn’t necessarily have to be in the same stock that paid you, but you may have another stock in your mind that you’d like to start a small investment with.

It’s certainly a slower process, but I’m to a point where I’m getting anywhere from $100 to $150 a quarter just on dividends. I do have quite a bit invested (now), but I started just like everyone with a $100 bill and a goal to turn it into $200.

Find a friendly trading platform:

This isn’t nearly as big of a concern now as it was when I first started trading, but you definitely want to do your research on what trading platform you want to use when you start investing with no money.

When I opened my first account, no platforms had free trades. Now almost all of them do. It used to cost me $7.99 every time I executed a buy or sell on E*Trade, and now there are zero fees which is much more user-friendly to investors, especially guys who want to make a lot of moves (which I don’t recommend, especially when you are investing with no money).

I’ll be honest, I haven’t done as much research on platforms in recent months, because I’m pretty happy with where I am. However, a new investor should certainly do their research on what fits them. Here are a few items I would recommend looking at.

  1. The obvious one: is there a yearly fee for your account, and are there any fees per trade that you make? There are so many platforms that don’t have either of these, so it should be something you aren’t willing to budge on.
  2. Make sure there isn’t an account minimum. A friend wanted to start trading crypto on a certain platform, and they wanted to require that he had $1,500 of credit or purchases on the app. This is a quick red flag for me, and you should not be held to a minimum.
  3. Ensure you can buy partial stocks (if that’s important to you). My platform doesn’t offer that, but if you start investing with no money, a partial stock buy may be the way to go. That means if Amazon (AMZN) is trading at $3,000, you could buy 10 percent of one share for $300. This is especially important for crypto trading (which I don’t recommend if you have limited funds or are just beginning; it’s far too volatile).
  4. Just like anything, make sure it feels right. Check the app, check the web interface and make sure you like and understand how it navigates. It sounds silly, but this is an account you’ll likely be using for a long time, so being user-friendly should be a pretty high priority. I’ve used a fair number of platforms or at least seen glimpses of how they work, and there are a few that I wouldn’t recommend because of usability issues.

A plan forward:

The last thing I’ll leave you with when investing with no money; is always make sure you have a plan forward. What exactly does that mean? Even though you don’t have a ton of funds to invest at the moment, make a plan for the future like it won’t always be that way.

It’s plenty to just give a small amount to a retirement account or to invest in one stock, but if at all possible, you want to continue to increase the funding as you grow older. That means each year should not only be gaining money from your investment on your actual money but also the incremental money you add each year.

I don’t know about you, but I would love to retire when I’m 60 years old if possible. Is that a luxury? Absolutely, but it’s also possible if you start investing early and continue to grow your positions each year.

I find myself in a very comfortable situation now at the age of 30. Still, as I mentioned before, the funds in my investment account and retirement accounts were all zero at one point, and I was just a kid in college making a few hundred bucks a week. I started investing with no money practically.

It’s all about priority and discipline, and if you are willing to read an article on investing with no money, you likely have the discipline to be successful.

Remember, always start small, and always take the free money, whether a company-paid retirement match or a dividend from a stock you decide to purchase.

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