The most commonly held belief regarding investments is that having a huge bank account is necessary. Building an effective portfolio could begin with just thousands of dollars. Here are some tips categorized by the amount you could have to start your investment and also explains the smart choices that low-income investors could make to begin an investment and savings program.

4 Strategies to Start

Automate Savings

It is a good idea to save a specific monthly amount that will pay off in the end. If you're unable to muster the determination or the organization to accomplish this on your own, assistance is available on smartphones and computer-based applications. The applications that make saving the most difficult are the ones that round your purchases and other transactions to the closest dollar and then put in your "savings."

Acorns invest the money in one of its low-cost ETF portfolios. These are great options for smaller savers. Qapital offers the possibility to transfer money automatically, according to your select rules. The funds in the FDIC guaranteed Qapital account is managed by one of the banks that are partners with them. Chime is an online bank and app that provides an account for savings that automatically reserves a portion of each paycheck you deposit, along with other options. Without these apps, inquire with your bank about its own apps and other options to transfer money from savings accounts to those more for investment and savings.

Take Care of Your Debts

Before you save, look at the amount it costs you to carry the debts you already have and think about how quickly you could pay them off. In the end, high-interest credit cards could have rates of up to 20%. Some student loans carry rates of interest that exceed 10 percent. They are more expensive than the annual average earnings of 9.2 percent or more, which is the rate at which the average U.S. stock market has increased over the years.

If you're carrying a significant amount of high-interest debt, paying at least a portion of it before investing makes more sense. Although you cannot know the exact returns on the majority of your investments, it is a sure thing that settling debt with an interest rate of 20% one year earlier can yield 20% of your investment.

Consider Your Retirement

The primary goal of investing and saving money in the early stage should be to ensure you have enough funds after you cease working. A key element in your plan is to make the most of incentives offered by the government and employers to promote retirement security. If your business provides a 401(k) retirement savings plan, don't forget about it. This is especially true if your company matches a part (or all) of your contributions to the plan.

If, for instance, you earn $50,000 and contribute $3,000 or 6 percent of your income in the 401(k) plan, the employer could match the contribution by adding $3000. A less generous employer could make contributions as low as 3 percent, adding $1,500 to the $3,000 you contributed. You'll want to make sure you invest enough to earn the entire amount of the employer's match. To not do this is basically to throw the money out the window.

Notably, 401(k)s and other retirement vehicles are excellent investments due to their tax-friendly treatment. Some allow you to contribute to them using pretax money and reduce the tax burden for the year you contribute. For other types of accounts, like Roth 401(k)s or IRAs, you make contributions using tax-free income, but then you can withdraw the money without tax, decreasing the tax burden in the year you withdraw. Remember that when your savings have been growing for a long time, you will have more than what you originally put in, so tax-free withdrawals are worth the cost. In both cases, the profits on the money you invest are tax-free in the account.

You Can Invest Your Tax Refund

If you're finding it difficult to save money through the year, consider saving a portion (or all) of the tax rebate to start investing. It's one of the rare times throughout the year that you're most likely to receive an unexpected income you didn't anticipate.