Starting when you have near nothing means you start small and build from there.
I was late in saving and investing for my retirement and I had to start small. That meant opening an Acorns account to save pennies on the dollar, carefully choosing how to spend what savings I had, and figuring out how to reinvest as I went along.
Below is a list of what I chose, in order of when I chose them.
Acorns was the cheapest and most passive way for me to get started.
Let me back up a second and remind you of the olden days.
Once upon a time, we visited banks and most of us relied on cash for purchases. Cash meant we ended up with change in our pockets. Every night we’d get home and fill a jar with our change until we had enough of each denomination to fill a coin wrapper. It was exciting to fill the quarter wrappers because each on held $10. We’d deposit our rolled coin at the bank and the money would earn a small dividend over the year.
Since we now live in a digital age of debit and credit cards, we are not collecting spare change to put in jars.
Acorns is brilliant because it rounds up each transaction to the nearest dollar and transfers the difference to your Acorns account.
It’s like this. Imagine it’s 1990 and you buy a Yahoo drink for 95 cents and pay with $1 bill. You would get 5 cents back to jingle in your pocket the rest of the day. Acorns takes that 5 cents and puts it aside for savings. In other words, Acorns creates the change you would have had if you had paid with cash.
Does saving change sound too insignificant to bother with? Check this out.
Like I said earlier, after the initial set up, I left my Acorns account alone for two years. At the end of the two years, my account had $1000. Is that too insignificant?
2. StartEngine is one of the equity crowdfunding platforms that allow nonbillionaires to invest in startups (or request funding for a startup). Investment amounts range from $100 to $500 or more and are converted to shares that can be sold if the company goes public. Depending on the startup each dollar invested may be equal to a share.
I choose the startups based on their product, how doable the investment, and the fact Startengine had determined they had a high chance of succeeding.
Any return above my initial investment is a gain. If they all go on to be highly successful and go public, I could make thousands to put toward larger investments. Coupled with supporting young, innovative companies, these are higher risk investments that I feel good about.
An important note: There was one startup I selected that did not meet its funding goal, which canceled the transaction and my money was never transferred. This is another reason why I like Startengine- it’s like Kickstarter in that you pledge your money but it is only withdrawn if the fundraising goal is met, so there’s no risk of losing your money on an early failure.
3. Capital One Travel Rewards was used for every purchase. The rewards added up and I was able to get a free roundtrip flight to New Orleans for a much-needed mini-vacation. Once, I used the reward points to pay off the balance due. Another time the points paid for a hotel in Vegas.
Without the reward points, those expenses would have been in addition to everything else.
But what does a credit card have to do with retirement?
It can give us room to breathe.
We’re playing a 20–40-year catchup. Even if our salaries are good, we can’t just deposit their entirety into a retirement account and call it good. We have to portion our money in new ways and, depending on our lifestyle, a little bit may make a big difference.
For some of us, our budgets don’t allow us to save for a flight, hotel, and associated vacation spending, which can be in the hundreds of dollars. This means time-off goes on the back burner maybe for years.
Using a reward card on purchases we were going to make anyway earns us rewards that may eventually cover the cost of a plane ticket, hotel, or paying off the balance. Vacation is possible again!
4. FolioFirst allows you to buy fractions of stock in a variety of industries. This is an excellent choice if you are like me and can’t buy whole stock. If you only want to invest $100, it’s up to you how far stretches.
To better illustrate this, below is a screenshot of a portion of my portfolio.
Take note of how much a single share costs for each company. The “value” column shows how much I invested, and “shares” is how much of a whole share I own.
Though my portfolio is spread out thinly, it has done significantly better overall compared to the S&P 500.
If you’re like me, naive to the trading world, FolioFirst is a place to start because the level of risk is up to you.
There are three portfolio options to choose from:
- Supplemental Income (what I have)
- Balanced Investing
- Long-Term Growth.
Since my other investments already included long-term strategies of Startup shares and company stock with FolioFirst, I decided to make Fundrise a supplemental income.
The Supplemental Income portfolio requires $500 to open but guess where that $500 came from?
Do you remember the $1000 I saved through Acorns during those first two years? That’s what fully funded my first real estate investment portfolio.
So far, my Fundrise portfolio is steadily earning close to 10% return and climbing. That’s way more return than if I had kept the money in a checking, savings, or left it in my Acorns account.
It’s also twice the return I’m averaging with a meager Vanguard account I received from my divorce, which, of course, I plan to reinvest elsewhere.