Investing On A Small Salary

Often it seems like investing and market information is relegated to the wealthy. Most news about fluctuations in the stock market are tailored to upper class and for obvious reasons—they're the ones who are responsible for major cash infusions. Information about safe mutual funds and cheap stocks with good dividends may reach the ears of mid-range salary workers. But it seems that valuable financial news that is targeted towards low salary investors is limited to free insurance quotes and the latest credit card offerings. Does this mean that Wall Street doesn't want you to invest if you're not rich? No, it just means you're on your own. So here are a few tips and things to consider before investing on a low salary:

Don't invest with the intent of making a lot of money quickly. Think about why you are investing. If your intent is to get rich quick, you're cruising for a bruising. The market can be brutal in the short term and most major gains are made over time, years or even half a decade. If you're not willing or able to keep your money in the market for that long, you're wasting your time investing in the first place. Hopefully, you're investing to become more knowledgeable of the market so that you can take advantage of future fluctuations. Your first foray into investing will not necessarily make you a lot of money. Keep that in mind.

Be organized and smart. Have a game plan for what kind of companies you want to invest in—green technology, manufacturing, etc. Research the major performers in these industries. Look for patterns over many years. If you see a company whose stock has consistently been very high which has recently taken a hit, now may be the time to jump onboard.

Don't scoff at penny stocks. If you're investing on a low salary, you may find yourself overcompensating by not even considering penny stocks. But penny stocks can be great investments over the long run. It all goes back to research. Research what some of the big growth sectors of the near future and then find small, startup companies in those sectors that have good infrastructure and alliances with bigger players. If these companies hit the big time, your shares of its once penny-wise stock could be worth millions. As an added bonus, many penny stocks offer great dividends.

Wading into the stock market is tricky for an investor of any salary level, but it's especially tricky for lower income people who can't afford to take major financial risks. That's why it's important you do your due diligence by researching the market, practicing patience, and looking carefully at penny stocks.



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