Jonathan Bentz has been 'getting rank' online since 2004. He is a Digital Marketing Manager and been featured on many top sites and blogs.
Ever since we were children, we’ve always been told to save and put away whatever we can. Whether it be a piggy bank, a personal savings account, or your “rainy day fund,” the honest truth is that most of us find it hard to store away any extra cash we may come into.
So, say we actually decide to buckle down and get serious about saving (or even better yet—investing), where is the best place to even get started? If anything, the world of saving and investing is so large and diverse, the average person will have absolutely no idea what’s best to put their money into.
If you are serious about investing your hard-earned cash for some kind of return, the best step to take for you would, of course, be finding and hiring a financial advisor. An expert will be able to point you in the right direction, but a good advisor will always make recommendations to suit your needs and keep your interests in mind.
Outside of that, if you don’t have a whole pile of cash to play with but still want to invest somehow, there are less traditional ways in which you can start investing. Below are the top three unconventional ways you can put your money to work now.
Unconventional Ways to Start Investing
- Crowdfunding: Equity-Based vs. Reward-Based
- Exchange-Traded Funds (ETFs)
- Micro-Investment Apps
1. Crowdfunding: Equity-Based vs. Reward-Based
Traditionally, the only way normal folk could invest for some kind of ownership of a company, you either had to wait for said company’s stock to become available after their IPO or somehow become an accredited investor.
With the boom of the Internet and recent changes in SEC regulations, this is no longer the case. One of the best ways you can start investing is by seeking out some sort of crowd funding need. Two kinds of crowdfunding can be done online: reward-based and equity-based.
Reward-based crowdfunding like Kickstarter is the kind we are all familiar with. We’ve all heard about success stories like the Pebble Watch, or even “The Veronica Mars Movie,” projects and ideas that were funded solely from funds granted via backers. Kickstarter campaigns are still prevalent to this day, but be aware of how this type of crowdfunding is categorized. In most cases, donating money to a Kickstarter campaign will grant you access to tiered rewards. The more you give, the better your reward should be.
If you truly believe in a Kickstarter campaign and want to see it succeed, feel free to give what you wish; just be aware that there are seldom any financial returns to be gained from this.
In contrast to reward-based crowdfunding structures like Kickstarter, there’s a whole pool of equity-based crowdfunding sites out there that give you the opportunity to invest in a startup company that you believe in.
Before May of 2016, only accredited investors could invest their dollars in privately traded companies. But subsequent changes to SEC Title III opened the door to companies being able to now portion off shares to online backers via equity crowdfunding. The difference here from traditional crowdfunding is that these companies are held to strict SEC regulations to limit the amount of risk to the pool of investors. And better yet, equity shows promise for some kind of return if the business becomes successful.
2. Exchange-Traded Funds (ETFs)
For the longest time, mutual funds remain to be one of the best investment vehicles that retail investors can sink their dollars into. But if you don’t have a whole lot to diversify your set of mutual funds, exchange-traded funds (ETFs) are one way to do so for as little as $100.
Unlike a mutual fund that may impose a minimum initial investment, ETFs trade like stocks. They have a specific share price and can be purchased through virtually any broker. With an ETF you can buy just a couple of shares as long as you have enough money to buy the shares.
Be buyer beware—no form of investment is not without its own set of drawbacks. Typically, whenever you make a trade, you’ll probably have to pay a trading commission each time. These commissions, ranging anywhere from $4.50 to $11 per trade, can quickly eat into your investment.
The best way to combat this expense would be to purchase ETFs less frequently and with slightly larger amounts of money. With large amounts moving less often, you can keep these transaction costs down.
3. Micro-Investment Apps
Smartphones and apps have become so synonymous with our everyday lives, we often there’s an app out there that can do just about anything we can think of. The beauty of the minds behind some of the biggest applications is that they figure out new ways solve queries that people may never have thought of before.
Case in point, apps like Acorns, Stash, and Robinhood are apps that allow a brand new way to stash away small amounts of money into some form investments. These new apps and trading platforms are making it easy to start investing with as little as $5. They can also help you spread your risk across multiple stocks and bonds to achieve the kind of diversification you would have with a much larger portfolio worth thousands of dollars.
The way most work is something like this: you make a purchase with your debit card, and it rounds up the nearest dollar difference and stores that away for investing. Instead of pairing you with financial advisors, many of these programs keep costs low by using software and algorithms to help you create portfolios that are in line with your goals and risk tolerance.
Helpful Links to Get Started With Unconventional Investing
Kickstarter is the world's largest funding platform for creative projects. A home for film, music, art, theater, games, comics, design, photography, and more.
- Revenue-Weighted Exchange Traded Funds From Oppenheimer
Oppenheimer revenue weighted ETFs are based on S&P and Navellier index funds. Same stocks, ranked by revenue & re-balanced quarterly.
- Stash Invest: Start investing today
It's not Wall Street's world anymore. Start investing today with as little as $5.
- Robinhood: Free Stock Trading
Free stock trading. Stop paying up to $10 for every trade. Robinhood is available now! Signing up takes less than 4 minutes.
- Acorns: Invest Spare Change from Everyday Purchases into a Diversified Portfolio on the App Store
Read reviews, compare customer ratings, see screenshots, and learn more about Acorns.
Go Out and Start Investing!
Investing your money can be daunting and a tad bit overwhelming when you have no idea where to start. But you definitely should not let that deter you from seeking out the options that work for you. If getting a financial advisor feels a bit too serious for you, start small with these unconventional methods of investing.
Unconventional Investing Preferences Poll
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.
Jonathan Bentz (author) from Kingwood, WV on September 16, 2016:
Hey Camille, thanks for jumping in and sharing your experience! Kickstarter and sites like it obviously get a lot of the buzz around the web, but I have found those micro investing apps to be very appealing. I mean, you're not ever really going to use those pennies in the first place, right? Might as well put them to good use.
Camille Harris from SF Bay Area on September 16, 2016:
I started using "Acorns" about a month ago. Though my portfolio is quite small ($84 and counting!), the app estimates it'll be worth $9,000 in 10 years. Not bad! I'd recommend it to others like me who are just getting started.