How to start small and grow a portfolio

For some people, investing in the stock market is one of the best ways to build wealth long-term. Though dabbling in the stock market can be daunting, getting started is often the hardest part. After that, an important part of investing is to contribute regularly, even if you can only invest a small amount. 

How you can start investing 

Starting to invest a certain amount each month — say $100 — might seem impossible, especially if you’re on a tight budget. If you think about it as setting aside just $25 per week, that might make it seem more achievable — and it would still move you toward your goal.

If you’re on a budget, you might consider cutting expenses. For example, if you make coffee and eat dinner at home instead of treating yourself at a restaurant, you can easily save $25 per week. Or you might be able to earn $25 a week by babysitting, doing online work, or picking up extra hours. In no time, you’ll have enough saved to invest $100 a month.

Then, it’s time to decide how you want to invest. For instance:

• Are you investing for short-term goals or for the long term, like retirement?

• Are you comfortable with bigger or more moderate risks?

• Do you prefer a hands-on or automated investing style?

These questions help determine your risk tolerance, which prepares you for the next step: actually investing. 

Automatically invest each month 

Once you’re committed, automating your investments can help you reach your goals. Many companies let you set up recurring deposits every month that they use to buy your selected stocks and bonds. This makes investing as easy as paying your bills. Soon, you might not even notice you aren’t spending that money on everyday items.

With a managed investment account like the one that MoneyLion offers, you eliminate several tasks, like doing research, finding a broker, or managing your portfolio. Instead, just set your risk tolerance, automate your deposits, and let MoneyLion’s professionally curated funds work for you. 

ETFs used in investment accounts

Managed investment accounts often purchase exchange-traded funds or ETFs. These are “baskets” of securities that can be bought and sold. While they offer similar diversification to mutual funds, they can be traded just as easily as stocks. 

For information on which ETFs MoneyLion may choose for investments, go to the MoneyLion investing page.

Understanding the risks

Before you invest, you should understand the balance of risk and reward. Generally, the greater the potential reward, the higher the risk. Likewise, the less-risky investments pose a reduced risk of losing your investment, but you probably won’t see as high of returns. 

If you’re not sure where you stand, MoneyLion can help you find your risk tolerance. 

Rounding Up for investments

MoneyLion doesn’t just make it easier to invest — we make it easy to save money to put into your investment account. 

With Round Ups, MoneyLion “rounds up” the spare change from your debit or credit card transactions and deposits them into your MoneyLion Investment or Crypto Account automatically. If you buy a coffee for $3.50, for example, we’ll round up the extra 50 cents. RoarMoney^SM accounts with an active Round Ups feature will round up each eligible transaction made with a MoneyLion Debit Mastercard^® or RoarMoney virtual card to the nearest dollar. Once the total accrues to $5 or more, it will be transferred to your MoneyLion Investment Account, where the funds are invested into a portfolio of selected ETFs. You can also deposit your spare change into your MoneyLion Crypto Account.

This puts your spare pennies to work in the market. You won’t even miss them! And you can turn on Double Round Ups to accelerate the amount you round up and get even closer to your financial goals. Investing $100 a month may seem like a piece of cake!

FAQ

Is it worth investing monthly?

It can be – and you can use a managed MoneyLion investment account!

Can you make money monthly by investing?

Investing regularly can boost your chances of seeing returns in your investment account. However, no investment comes without risk.

How much of your salary should you invest?

A general rule of thumb is to invest 15% of your pretax income (including employer contributions) toward retirement investing. But if you want to invest a little more in a general investment account, more power to you!