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Small investments that make money for low income earners
Looking for investment plans when you have low disposable income?
In today’s financial markets you can invest on a budget easily. Gone are the days where you needed to seek the advice of an expensive broker requiring a high account balance.
Thanks to new technology and products, the markets have become open to micro investors, small investors and beginners.
Investing literacy has also improved thanks to the internet, the SEC Investor Education, and new brokers and financial institutions.
Some of the investment opportunities for low income earners are not entirely new. They have been around for decades. However, they have become known and more accessible for earners looking to invest.
These are some of the ways to start investing with a low income. There are more investment instruments available. However, these are basic ones that don’t require a lot money upfront and charge affordable fees.
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Who is This Post For:
- Low income earners wanting to build wealth – long term
- Beginners wanting to learn self-reliant investing
- Low income earners looking for affordable ways to invest

How to Invest with Low Income?
Invest in Financial Education
Financial education is key if you’re going to take the DIY approach for investing. This education is informal, not a degree.
There are many resources free and paid to develop some investing skills. So, investing the time to learn the basics and continuing to learn is part of a DIY investing style.
These are some resources you can leverage to learn investing as you go.
- Personal finance blogs
- Investing podcasts
- Investing magazines – Money, Fortune, Kiplinger
- Investment books
- Financial news
- Paid courses
- College continue education – non degree
- Online investing communities
- Stock brokers, mutual funds websites
- SEC investor education portal
There is a lot of educational information about investing in different formats. As with anything else, you should look thru and decide what’s relevant for you.
Generally, the most useful information is one that empowers you to take any step towards your goals.
Automate Your Investments
Automating your investments is convenient and helps to improve your money management habits. You don’t have to mange it if you’ve already set up your automatic deposits.
One way to accomplish automation is between your bank’s checking account and your investment account at your Broker or Funds company.
You can set up monthly automatic deposits into your investment account.
Dividend Re-investment Plans – DRIPs
These are plans that allow you to invest in individual stocks. The plan lists dividend paying stocks that you can buy for long term investing.
As a self-reliant investor you can save on high fees and commission when investing thru a DRIP.
Related: Investing in DRIPs
Many of the large US public companies sell their shares directly to investors via DRIPs.
Direct Investing.com – A DRIP platform administering investment plans and providing investors education on it’s portal.
You can buy as examples the stocks of Coca Cola, General Mills and Exxon thru Direct Investing.
First Share is a platform that manages many DRIPs of large companies. The site also provides free resources to learn stock investing.
Exchange Traded Funds – ETFs
Exchange traded funds track specific stocks by industry and by company’s size. Sometimes these funds mirror other underlying indexes. ETFs are traded and priced just like stocks.
ETFS can invest in industry specific companies’ stock. Some of the more widely available include; REITS, Tech stocks, Financial stocks, FinTech, Foreign stocks, Healthcare, Bio Tech, Consumer staples, Oil&Gas stocks and others.
ETFS can also invest by market cap or company’s size. In this category you’ll find Small Caps, Mid-Cap and Large Caps companies stocks.
Related: Investing in Index Funds
You can also invest in an ETF Target Fund. These funds are commonly used for retirement planning. The stocks are selected mainly on their income potential during retirement and also on value.
Funds companies: Vanguard, Fidelity, Charles Schwab, TIAA, American Funds, T. Rowe Price and others.
Funds companies charge fees associated with administrative costs and other expenses. You need to look at the fees charged before selecting a company. High fees can eat away large part of your investment return.
9 Best Ways to Invest for Low Income Earners
Mutual Funds
Mutual Funds – these track a set of stocks according to industry or size. These are similar to ETFs, but Mutual Funds do not trade like stocks, these are priced once a day only.
Mutual Funds can be purchased at the same places. you would invest in ETFs. Vanguard, Fidelity, T.Rowe Price and others.
Related: 5 Places to invest with little money
You’ll want to watch out for funds’ fees and commissions.
A rule of thumb is a 1% expense ratio for an actively managed fund. Less than 1% is good, but more than this is considered high. Fees for mutual funds are usually higher than for ETFS because they are more actively managed.
Mutual Funds.com provides a list of mutual funds companies along with additional research information. Use this list if you’re looking to start investing in funds.
Money Market
A money market is a very liquid financial instrument. Generally, you can cash Money Markets whenever you want.
You’ll earn interest on a Money Market deposit, usually this interest is higher than a CD at a bank.
The mutual funds and ETFs companies also offer money market options for investors.
Related: Online Certificate of Deposit
Investing in Money Market is a way to earn higher interest than at a bank and at the same time maintain liquidity.
Generally, these are FDIC insured like Certificate of Deposits. However, always check to ensure your institution is insured for these instruments.
Individual Stocks thru a Broker
Just because you considered yourself a low income earner doesn’t mean you can’t invest in individual stocks, other than DRIPs. But, you need to understand your risk tolerance and the risks involved in buying equities.
There are many low costs online stock brokers like TD Ameritrade and Charles Schwab where you can buy and sell stocks thru.
Related: 6 DIY Stock investment platforms
33 Things to know before making money with your first stock
Invest Time Creating Passive Income
There are many ways to create passive income that required little to no money upfront.
If you have some skills or talents you can start building passive income streams for retirement and for extra income.
Some of the skills you can monetize thru passive income include; writing, photography, craft, blogging, teaching, graphic designs and others.
Check these out for more details;
4 Passive income ideas for side hustlers and investors
5 Ways to make passive income with a photo blog
Make passive income with a blog
Investing on a Budget
If you consider yourself a low income earner and want to start investing, creating a budget can help you attain this goal.
Savings comes before investing because you need money to start investing. A budget is a good tool if you have challenges when it comes to saving some of your discretionary income.
If you need help starting a budget, check this simple Excel template you can use to track your cash ins and outs.
Final Thoughts
If you’re looking to start investing while on a low income, there are different ways to do it including individual shares of stocks.
One way to start if you’re a very beginner is by investing in funds, instead of stocks. But, there are ways to also invest in stocks with little money.
Whatever options you go for remember that investing also carries risks, as well as returns.
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