You can get started investing even if you only have a small amount of money to contribute. Even $200 is enough to get started with some types of investments. If you make it a habit, contributing these small amounts can add up to big numbers in the future.
Dividend Reinvestment Programs
One of the best ways to invest $200 is to get involved with a dividend reinvestment program or a direct stock purchase program. With either one of these programs, you can buy stock directly from the company that issues it instead of having to work with a broker. When you use this option, you do not have to pay broker fees, which allows you to put all of the $200 into stock. With a dividend reinvestment plan, every time the company issues a dividend, you automatically use that money to buy more stock.
Another way that you could potentially invest $200 is to buy shares of a mutual fund. While many mutual funds have larger minimum investment requirements, some are still available at this level. You can also set up an automatic investment plan that allows you to contribute a fixed amount of money to a fund every single month. With mutual funds, you get access to professional money management and a diversified portfolio, which can bring in some nice returns over the long term.
When you have $200 to invest, putting it into stock could pay big rewards. With this amount of money, you could potentially buy several shares of a company or you could buy one or two shares of more expensive stock. Investing in stock provides you with the potential to receive dividend payments from the companies that issued the stock. If the companies appreciate in value, your original investment could be multiplied many times as a result.
Another option that you may consider is putting money into a small business project. Instead of using that $200 to buy securities of some kind, you could potentially use it to start a money-making venture. For example, you could use the $200 to set up a website and start creating content for the purpose of generating traffic. Then you could sell advertising on your site. The returns on small businesses can often be more than what you would receive from a similarly priced investment.