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Best ways to start small?

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    Best ways to start small?

    My grandmother recently passed away, and I was driving back home with my uncle. Since he knows I work in finance he was curious about how to get started with small amount investing. His work gives him like a small match on his 401k, and he has a 4.25% mortgage. But he hasn't made more than like 30k for most of his life. Does he have any options for apps or strategies which might help improve his situation?

    Like is there anything which could automatically round up his purchases and invest it in a roth at the end of the month or something like that?

    #2
    Bank of America has their "keep the change" program that rounds up debit card purchases and transfers the excess to a savings account.

    A lot of people do this manually by rounding up numbers themselves. If you write a check for $11.79, you enter $12.00 in your register so that your balance appears lower than it really is. Over time, you build up a "hidden" surplus in the account. Once you've accumulated enough to make a Roth deposit, you can take it out.

    All of that said, if he has a 401k with a match, he should make sure he's contributing enough to get the full match before he worries about a Roth.
    Steve

    * Despite the high cost of living, it remains very popular.
    * Why should I pay for my daughter's education when she already knows everything?
    * There are no shortcuts to anywhere worth going.

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      #3
      Get a job with a company with a stock purchasing plan or gives stock options, buy into it every paycheck, become a company man and it will pay off quickly.

      This may not apply to your uncle but it's the perfect game plan for someone with or without a useless degree
      retired in 2009 at the age of 39 with less than 300K total net worth

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        #4
        This is just my personal opinion but if you want to make the best investment return on a small amount of money, say under $500, then micro-finance is the way to go. Your small interest-free or low-interest loan can help entire families in areas of need. The gratification is worth far more than a few percent return on your money elsewhere.

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          #5
          Originally posted by amastewa93 View Post
          My grandmother recently passed away, and I was driving back home with my uncle. Since he knows I work in finance he was curious about how to get started with small amount investing. His work gives him like a small match on his 401k, and he has a 4.25% mortgage. But he hasn't made more than like 30k for most of his life. Does he have any options for apps or strategies which might help improve his situation?

          Like is there anything which could automatically round up his purchases and invest it in a roth at the end of the month or something like that?
          The app "Acorns" rounds up your purchases and invests the small bits of money. Please note I am neither recommending nor giving it a thumbs down. You will have to do your own due diligence. It exists; that is all I am saying.

          https://www.acorns.com/

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            #6
            The 365 day money challenge typically starts with a buck a day, thats a great way to start small.
            james.c.hendrickson@gmail.com
            202.468.6043

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              #7
              Fidelity has a credit card that can put his cash back into a brokerage account. https://www.fidelity.com/cash-manage...signature-card

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                #8
                Why an app? Just tell him to sweep his checking account monthly into a savings account (if he must receive help to save money; otherwise, just keep everything in checking). Then at the end of the year, put that $ into his Roth IRA.

                Or is the year end $ too small? Then, he may need to save multiple years or just combine with wife or somebody else close enough.

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                  #9
                  Automate, Automate, Automate

                  Hey amastewa93,

                  The best thing your uncle can do is set up an automatic transfer from his account every time he gets paid. He can start off with $50 once every 2 weeks and see how that works. Once he starts automatically saving, he will get excited about the progress he's made and increase his saving amounts. Starting small is the best way to make sure that your uncle eventually achieves financial independence.

                  Raphael
                  Check out the go-to blog for personal and professional development
                  thestrongprofessional.com

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