While you need significant sums of money to invest in property, the great thing about investing in shares is you can get started with very little money.
With Superhero, you can start investing in shares and ETFs with as little as $100.
You might think it’s a waste of time to invest such small sums of money, but there are actually three good reasons why this can be a smart decision.
Why starting small can lead to big outcomes
First, even a small amount of money can grow into something big, if given enough time to compound.
For example, as the 2020 Vanguard Index Chart shows, if you’d invested $100 in 1990, by 2020 your investment would’ve grown in value to:
- $1,305 if you’d invested in an index fund of Australian shares (for an average annual return of 8.9%); or
- $1,868 if you’d invested in an index fund of US shares (for an average annual return of 10.3%).
Second, you can turn your initial small investment into something even bigger if you continue making small investments.
For example, if you’d invested $100 at the start of 1990 … and continued investing $100 each month … by 2020 your investment would’ve grown in value to:
- $161,839 for Australian shares; or
$210,845 for U.S. shares.
Third, the best way to become good at something is to practise. The moment you start investing – even with as little as $100 – you’ll start becoming more familiar with investment strategies, tax rules, stock market jargon and the like. That will turn you into a more knowledgeable and confident investor, which will stand you in good stead if, in the future, you’re able to invest larger sums of money.
Why investing in shares and ETFs can help you build long-term wealth
Before you ask yourself “How much do I need to start investing?”, you might be wondering why you should even invest in the first place.
Well, generally you should consider investing if you think that’s the best way to use your excess cash.
The other main alternatives are:
- Spending your excess cash – you get immediate gratification, but you don’t build long-term wealth.
- Depositing it in the bank – your money is safe, but you earn a minimal return.
- Putting it under your mattress – your money is readily available, but you don’t earn any return.
When you invest your excess cash in shares or ETFs, the risk is that you can experience significant volatility and periods when your investments may go backwards. However, the big positive is you have the chance to build long-term wealth – as the example statistics from the 2020 Vanguard Index Chart show.
Now you know why you should invest and how much you need to start investing. The next step?
Take action and Join Superhero for free today and start your own investment journey with as little as $100.