What can you do with $5? Start small, invest and end up rich

In this article

  • Subscribe to Line, you can save as little as $5 and enter a chance to win up to $100,000.
  • Investing $5 is not a hard place to start.
  • Investing $5 regularly helps build a good financial habit.

Are you one of those people living with the notion that you need a lot of money to begin investing? Well, that may have been a reality years ago. But, now, with niche-type investment platforms exploding in recent years, you can begin investing with as little as $5.

Sounds interesting? It has to – seriously!

Why you must invest with just $5

Well, to begin with, you’ve got to start somewhere—heard that before? And $5 is not a hard place to start. Because it’s not so much about the amount of money you have to invest, but the amount of time your money is invested.

 For example, you’re 25 years old, and you have so little extra money in your budget that you decide not to bother investing at all.

You decide to wait until you have $10,000 to begin investing. Unfortunately, as life tends to go, you’re 50 years old before you have that kind of money. You end up investing it in a balanced portfolio of stocks and bonds, with an average annual return of 7%. By the time you’re 65, your $10,000 only grows to $27,591.

But let’s just say you chose a different course because you don’t have a lot of money. But you somehow manage to save $5 twice a week ($10 a week) to invest, or about $500 per year.

You then end up investing $10 per week for the next 40 years, with an average annual rate of return of 7% on your money—want to guess how much you’ll make?

Your bank account will look big and juicy with $103,586 by the time you reach 65.

So don’t wait until you’re 50 to begin investing. Start now and start small – you will end up with way more than you invest by the time you turn 65.

Turn $5 into an investment habit

The other dynamic involved in investing with $5 is building a financial habit—and it’s powerful. The sooner you embrace investing as a financial habit, the better it works for you.

You may start with something as small as $5. But when you start getting used to investing $5 consistently, your investment plan is in motion and your motivation will increase. Soon you’ll be contributing $10 per week, then $20 and then $50 and so on. 

To get your investment plan in motion and your favor, just start with $5. From there, carve out more room in your budget. And over time, as your income increases, you’ll be able to increase your savings and investing. 

But all of that happens only when you get started.

Where can you invest $5?

No promises of the sun, the moon, and the stars here. But know that $5 is enough to start investing on some popular platforms. But since you’re starting small, your options will be limited.

The best platforms, to begin with, are micro-investing apps and Robo-advisors. They’re designed specifically for small investors. 

With just a few dollars, a micro-savings app, or a Robo-advisor, you’ll be able to design a fully diversified portfolio. All you need to do is fund the account regularly.

Save with Line

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This page is purely informational. Line does not provide financial, legal or accounting advice. This article has been prepared for informational purposes only. It is not intended to provide financial, legal or accounting advice and should not be relied on for the same. Please consult your own financial, legal and accounting advisors before engaging in any transactions.

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