How much Money do I need to start investing?

This is one of the most commonly asked questions from readers. Many people want to become the next Warren Buffett, but they don't know where to begin investing or even how much money they need to make the first purchase.

Short answer: $5.

Better answer: $500, and only AFTER you have built up your emergency savings.

"We really encourage people to have six months of savings first," says Yvette Butler, president of Capital One Investing. Once you have a few thousand in savings, then you can start investing.

The goal of investing is to make your money grow faster than it would in a typical bank account (especially since savings accounts barely spit out a little more than 0%interest now). But investing is risky. You can lose money, especially in the "short run."

How to invest: Once you have the cash, an explosion of trading apps has made it easy to get going.

"We wanted to make our service accessible" to anyone, says Vlad Tenev, co-founder of the app Robinhood that allows you to buy and sell stocks for free. You just have to have enough money to buy the stock you want (e.g. $56 for Starbucks (SBUX)).

Robinhood launched in March 2015. It already has about a million users. Tenev says many begin by investing just a few hundred dollars as a way to dip their toes in and learn. Over time, they add more to their portfolio.

How to get going with just $5: If you really want to start small you can use an app like Stash or Acorns. Both allow you to begin investing with just $5. Stash offers you a choice of several funds to invest in. You basically end up owning part of a stock -- similar to sharing your apartment with roommates. Acorns allows you to deposit "spare change" from say, your coffee purchase. When you get to $5, the app invests that money for you into a diversified portfolio (basically, a mix of stocks and bonds).

How to get great advice: Feeling too intimidated to pick your first stock or fund? There are a lot of great -- and cheap -- services that will do it for you. Betterment and Wealthfront are good examples. They use computer models to figure out the best portfolio mix for you based on your age, income, goals and tax situation and they will invest your money for you.

"The way people invest is changing dramatically," says Jon Stein, founder and CEO of Betterment. "We optimize your gains, net of fees."

Betterment doesn't have a minimum balance requirement, so you can start with just a few dollars. Wealthfront requires $500 to get going.

More established players like Fidelity, Charles Schwab and Vanguard are lowering their prices and offering more options to cater to "new investors," especially Millennials. You can call them up or stop by an office in your town to discuss what to do.

Just remember: Always check the fees. If you only want to buy $500 in Apple stock, you don't want to get charged a $7.99 fee when you can buy the stock on an app for free.

What to buy: Figuring out what to buy is tough. There are roughly 2,400 stocks traded on the New York Stock Exchange alone.

The easiest option is to buy what's known as an ETF (an exchange-traded fund) like SPY (SPY). It trades like a stock, but it means you own a basket of stocks. In the case of SPY, the basket is made up of 500 of America's largest companies. Sure, a few might struggle, but all 500 probably aren't going to tank at the same time, so it helps lower the risk.

Another common option is to buy the ETF of a sector of the economy such as QQQ (QQQ) for tech stocks or EEM (EEM) for emerging markets.

Buying individual stocks is riskier. If the stock falls, you can lose a lot of money. Of course, you also gain a lot of money if it goes up. The most popular stock by far is Apple. Other widely held ones are Facebook (FB, Tech30), GE (GE) and Disney (DIS).

Keep in mind: About half of Americans have money in the stock market, but only 14% own individual stocks.

How To Save Beyond $250 Monthly Using These 25 Methods That Most Business Owners Are Ignoring

I get it -- money is tight. So, how does saving $250 a month sound? There are tons of ways business owners can save hundreds of dollars (or more) each month. Sadly, most people, including business owners, don't make the effort to implement huge-but-easily accomplished savings. 

This post will list 25 easy ways you can start saving $250 per month right now. While not all of these tips will save you hundreds of dollars in one shot, combining two or three of them definitely will. 

1. Ditch the landline.

If you have a single-line system for your business, your costs likely start around $50/month. If you have multiple lines, you're probably paying at least double that.

Scrap the landline and let your cell phones do double duty. Bonus: You can write off your business-associated phone costs, saving you even more money.

2. Share advertising costs with another business owner.

Cut your advertising costs in half by teaming up with the owner of a complementary business. This works especially well for co-sponsoring local or online events.

Another cost-saving option is to ask other business owners if they want to advertise via your website or social media. This can actually be a great bonus revenue stream!

3. Create your own forms rather than paying for them.

The vast majority of business forms you need (invoice, order forms, non-disclosure agreements, partnership contracts, etc. ) can be found online for free. Heck, it's what my company does and we don't charge anything.

4. Buy second-hand equipment and furniture.

Why pay $500 for a new desk when you could get a gently-used one on Craigslist for $100? Same goes for printers, computers and other electronics.

Another great option is buying refurbished electronics from reputable electronics dealers.

5. Negotiate a cheaper credit card rate.

Paying credit card fees is one of the worst ways to spend your money. Look around to see what competing card companies are charging, and then try to negotiate a lower rate with your current card company.

6. Raise your insurance deductible.

Take a look at how many times you've made a claim over the past few years. If you seldom make claims, consider raising your deductible to save on monthly premiums. Even moving from a $250 deductible to $500 can make a decent dent in your monthly insurance costs.

7. Outsource rather than hiring.

While the hourly cost of outsourcing may end up being equivalent (or even slightly higher) to hiring someone, you'll save big in terms of pensions and benefits. Why not save that extra money, or use it to pay a highly-qualified consultant who could likely do a better job in less time? I've also found a full time programmer by first outsourcing.

8. Check the accuracy of your mailing list.

If you do large-scale mailings, you could be wasting a ton of money if your address list is outdated or inaccurate. The US Postal Services offers a number of free and low-cost services to check your list before you mail.

9. Get your family to help out.

Instead of hiring outside help for administrative tasks like filing and bookkeeping, hire an immediate family member. You still get to claim the business expense. You keep the money in the family, and your lower income-earning. Family members won't have to pay much tax on their earnings, either.

10. Always pay early to get the discount.

Take advantage of early payment discounts whenever possible. This can be particularly lucrative if a supplier is offering 2/10 net 30 (meaning 2 percent discount if paid within 10 days). This works out to an almost 37% return when annualized.

11. Barter.

You'd be surprised at how many businesses are willing to barter goods and services. I find this is particularly true when it comes to advertising. If money is tight, offer your products or services in exchange for a free ad, mention or online sponsorship.

12. Go as paperless as possible.

Skip the paper and ink and use email whenever possible. There are tons of free apps that can help you make the transition: CamScanner, Evernote and Due.com are just a few.

13. Share office space (or go without).

Many companies are saving hundreds or thousands a month by going virtual, sharing office space or renting temporary meeting rooms. Use a site like ShareDesk to find local office space you can book on an as-needed basis. I personally use coworking space Bootup. It helps me to cut costs.

14. Try your hand at free PR.

Hiring a PR consultant can cost big bucks. Instead, use a service like Help a Reporter to get free PR. This service lets you respond to daily, emailed queries. These queries can land you in big-name publications like Time, The Wall Street Journal or The New York Times.

15. Hire an intern.

Instead of hiring or outsourcing, consider an intern from a local college or university. While this can be a very labor-intensive process (finding, training, reporting, etc.), it can save you money in the long-run.

16. Outsource the tough tasks.

It seems counterintuitive, but by outsourcing tasks it actually frees you up to spend more time on revenue-generating activities. Some of these tasks might be blogging, social media management or office administration.

17. Stop using your credit cards.

Take it from someone who owns a company to accept credit card payments: don't underestimate how fast it can saddle your business with debt. According to ValuePenguin, the average rate for a business credit card in 2017 is over 15 percent. If you're tempted to carry a balance on your card, try switching to cash-only purchases.

Each month get pre-purchase gift cards for your necessities. This way you always know where you're financial standing is and can avoid racking up charges on credit.

18. Bring a bagged lunch.

Spending a few bucks a day eating out may not seem like a lot, but it adds up. According to Time, bringing your own lunch can save you up to $2,500 per year.

19. Move from traditional to online advertising.

Are you still using old-school advertising strategies like magazine or newspaper ads? Switch to digital advertising strategies. With social media, email and content marketing, you could save a ton of money each month. Plus, digital marketing tends to be much more effective.

20. Ask for a reduction in your phone or internet bills.

Your phone and internet bills are not set in stone. Investigate what others are charging, then call your provider and ask for a discount. Most phone companies will look for savings in your current plan, if you simply call and ask if there's a way to reduce your bill.

21. Use free tools whenever available.

In many cases, free tools can be just as effective as paid ones. Don't pay for a tool unless you KNOW you need it and you can't live without it!

22. Go open source for your ecommerce store.

Thinking of opening an e-commerce store? There are tons of great, free open source e-commerce platforms you can choose from.

This means no additional monthly fees for the privilege of selling your stuff! Look into BigCommerce, Zen Cart, WooCommerce or WP eCommerce.

23. Deduct your business-use-of home expenses.

If you run your business from home, claiming at-home business expenses can actually save you a ton of money over the year. Don't forget to claim the business portion of your mortgage or rent, phone/internet and even utilities.

24. Go without the extras.

We all have little "extras" we spend money on every day (I'm thinking specialty coffees, in-app purchases, bottled water, etc.). Cutting out $5-$10 of daily unnecessary luxuries and impulse buys can save you $150-$300/month.

25. Become a marketing DIY'er.

Hiring a marketer can cost you a lot more than $250/month. If you have the time and interest, consider teaching yourself how to do your own marketing.

How Youths Of Today Can Build A Financial Fortune With Just $90 A Month

Sidney Pearce doesn’t buy into the hype that Millennials are financial flakes who would rather buy a Venti latte than invest in a retirement fund.

“Yes, some of my friends have credit card debt and they’re not saving a dime, but that’s not me,” says Pearce, a 22-year-old publicist in Phoenix. “I learned the value of investing from my grandfather. He grew up in a time where ‘saving for a rainy day’ was the go-to mantra.”

For his part, Pearce is laser-focused on shoring up his financial future, despite only earning $36,000 a year. He has $3,500 stashed for emergencies, and contributes $90 a month to his company’s 401(k) plan.

Investing less than $100 a month may not sound like much, but Bankrate’s compound interest calculator tells a different story. For instance, if Pearce continues to invest $90 a month in his 401(k) with a 7% rate of return, the money will grow to nearly $280,000 by the time he reaches age 65.

Unlike some of his peers, he’s bucking the trend that younger Millennials tend to steer clear of the stock market.

The reason, according to 46% of Millennials who responded to a 2016 Bankrate Money Pulse survey, is that they don’t have the money.

Still, Pearce is undaunted.

“I’m focusing on paying off all of my bills, including a $15,000 car balance,” he says. For now, investing in an IRA is not financially feasible, “but I have a friend who is a broker and we talk about trends on a regular basis.”

With Pearce making progress on two financial goals, the publicist is eyeing a third —getting hitched in the next year or two.

Pearce and his fiancée, Mira Richey, age 21, want to foot the majority of the bill for their wedding and honeymoon. “Yet, we don’t have the luxury of paying for an expensive wedding and an over-the-top honeymoon,” he says. They're considering getting married by a justice of the peace and hosting a reception, and then honeymooning in Mexico.

It makes sense given his careful budgeting. In 2016, the average cost of a wedding day rose to $35,329 nationally, up from $27,021 in 2011, according to a survey by The Knot .

While her parents are going to pitch in, the plan is to save $10,000 for their nuptials. “I use a free app called “Albert” and it helps me save more and manage my budget,” says Pearce. It connects all the financial accounts, makes real-life suggestions, and tracks every dollar spent. The goal is to emerge from the experience debt-free.

His advice for young investors: “Don’t buy into the ‘party now, save later’ philosophy. Start today.” 

The Expert Advice

Rianka R. Dorsainvil, CFP, president of Your Greatest Contribution, a financial planning firm in Washington, D.C., says Pearce has done quite a bit to start investing in his future. Below are tips for young investors, whether single or a pair, on how to grow and protect your money.

Don’t leave money on the table. Pearce is saving 3% of his salary to his 401(k). If your company offers matching contributions, take them. "Young investors need to understand the power of compounding interest," Dorsainvil says. "People assume it's just a difference of losing 2%-3% in matching funds, but that amount could equal thousands in additional retirement funds," she says. So, contribute up to the match

Invest in disability insurance. A young worker’s most valuable asset is his or her ability to earn income. “Protect your income with disability insurance, which can replace 50% to 60% of your income should you become unable to work for a period of time,” she explains. Many employers offer group disability plans which may be less expensive than an individual plan.

Start a side business. Like many Millennials, Pearce has a good eye as photography enthusiast. "He should do photography as a side gig," Dorsainvil says. "He could create a site on Square Space that costs little to nothing and start snapping photos this summer." There's money to be made that can go toward achieving some of his financial goals, she says.

Have money talks. “Pearce understands his money script and the history of where his money mind-set came from," Dorsainvil says. "I encourage him to have the same conversation with his fiancée." Before marriage, couples should not only have the big picture talk about saving and investing habits, they should also delve into how their money style came to fruition. Failing to talk about money can lead to financial strain and miscommunication.

Create S.M.A.R.T. financial goals. Pearce and his fiancée have to develop S.M.A.R.T. goals that are specific, measurable, achievable, relevant and time bound."First, they need to set a wedding date," says Dorsainvil. "That will tell them how long they have to save and how much they need to set aside each month to accumulate $10,000." Another tip: Every single dollar you earn needs a home, whether you are getting married or saving for a home, she says.

This Is How Rich You Would've Been Had You Invested In Apple Instead of Having a Child

In the off chance you want to know how rich you'd be if you'd invested in Apple instead of raising a child, you can.

WhatIfIBoughtAppleInstead is a website that invites parents to enter their child's birth month, their family income, and whether they paid for their child's college education. The site then calculates how much money they would have made if they had invested all that cash in Apple instead.












"Have you ever wondered how different your financial situation would have been if you'd invested in Apple stock instead of having a child?" the site asks. "Well even if you haven't, now you can find out."

Apple's shares have soared in recent years, due in no small part to the success of the iPod, followed by the iPhone. Apple is now one of the biggest companies in the world in terms of market capitalization, and is currently valued at nearly $600 billion—a far cry from when it was just a startup in a garage.

The calculation by WhatIfIBoughtAppleInstead involves several assumptions. For one, it estimates the monthly cost of raising a child from data obtained from the U.S. Department of Labor. It also estimates the cost of raising a child to 18 based on income level, and adjusts Apple's share price based on stock splits and dividends.

The value of the investment is based on Apple's latest closing price.

There's one major limitation: Apple didn't go public until Dec. 1980, and the calculator, reported on Tuesday by Apple-tracking site 9to5Mac, only extends as far back as 1981. So, if your child was born before 1980, it would be impossible to determine how rich you'd be.

There's also no way to calculate an investment return on any shares sold before the latest trading day.

But if anything is for certain, it's that investing in Apple over the long haul would've been provided huge returns. Sure, Apple had some difficult years in the 1990s, and many people got out of the stock at that point. Also, over the past few years, its share price has fluctuated within a narrow band. But any early investment would've paid off in a big way.

For instance, if parents with nearly $111,000 in gross family income who paid an average of $50,000 annually for four years of private college for a child born in January 1981 had invested in Apple stock, they would now own more than $48 million in Apple shares. That figure drops to $34.3 million for middle-income families that earn between $64,000 and $110,000 in total income.