Low Cost Investments for First-Time Investors

First-time investors would be wise to start slowly when seeking their first low cost investments.

Investing only a small amount of cash creates less risk in losing money you can afford to lose when you don’t know the ropes. In this way, you’ll be learning as you go and potentially making some money without blowing thousands of dollars on a beginner’s mistake.

Here are some low cost investments that require a lower cash commitment and are easier to understand:

Shares

Beginners who invest in the stock market should stick with safer, more seasoned shares that are proven, stable moneymakers over a longer period of time.

Yes, it will take more time for your share purchase to appreciate, but this a less volatile investment that won’t fall into the basement overnight.

• “Safer” shares are ones of by well-established businesses that sell common merchandise people use regardless of current economic conditions. Moderately priced personal care merchandise, foods, and cleaning products are within this category.
• Choose a “hot” stock, and your chances of earning money quickly are higher. However, stocks can lose value just as easily. If you can buy low and sell high and quickly liquidate your asset, the potential for profit is good.
• Use an online broker to assist your investment plan. Sites like Commsec or Etrade have low-cost memberships that are generally less than $10, and their members areas give you access to quality advice, investment tools, and the buying power necessary to make successful trades or purchases.

Managed funds

A managed fund is more like a community of thousands of investors who each contribute their individual funds into a larger group investment. Thus, a managed fund contains earnings that are part of a whole, not exclusively yours to claim.

• First-time investors are drawn to managed funds because they are managed by seasoned professionals who can potentially earn more money for the investor group as a whole, rather than going it alone with one person.
• Managed funds require very little startup costs – in some cases as little as $500 to $1,000 in a lump sum or even $25 per month on a regular basis.

Term Deposit

A term deposit has virtually no risk, but offers a minimal return. A term deposit is an investment where the interest rate is guaranteed not to change for the nominated term, so you’ll know exactly what your investment’s worth.

• When you open a term deposit, you’re essentially loaning the bank your money. In return, you earn a low interest rate for the privilege.
• Most terms are between 1 month and 5 years.
•   Most term deposits require a minimum investment of $5,000.

Low cost investments – start your journey to financial freedom

Low cost investments for first-time investors offer lucrative opportunities, if properly managed. You might not have a down payment for a house from the proceeds, but by utilizing these quick, easy low cost investments, you’ll be able to enter the world of investments on surer footing.