Low Cost Investments for First-Time Investors

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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:


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

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

  • “Safer” stocks are ones held 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 OptionsHouse 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.

Mutual funds

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

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  • First-time investors are drawn to mutual 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.
  • Mutual 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.

Certificates of Deposit

A CD has virtually no risk, but offers a minimal return. Also, most CD terms are between 6 months and 5 years, so there’s little chance of you seeing any return on your investment for awhile.

  • When you open a CD, you’re essentially loaning the bank your money. In return, you earn a low interest rate for the privilege.
  • Seasoned investors buy at least three CDs at once: one with a 12 month term, one with a 2 year term, and a third for a 3 year term. When the first CD matures, they’re able to cash it out and keep the other two CDs active, earning a higher interest rate.

  • CD startup costs vary widely, largely depending on the available funds you’re willing to invest. Some CDs can be initiated for as little as $500, while others require a minimum investment of $10,000.

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 investment channels, you’ll be able to enter the world of investments on surer footing.

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