Low income and investor. Do those seem like two terms that go together? Unfortunately, most people count themselves out of investing opportunities if they have a low income, but they’re doing themselves a disservice in the process.

Investing isn’t reserved for high-income individuals, and in reality, making smart investment decisions can be one of the best ways to build wealth, even in the face of a less-than-optimal salary.

New graduates are one of the groups that tend to count themselves out of investment opportunities the most, and it’s likely going to be economically crippling to them later in life.

The following are some of the most powerful and useful tips for low-income investors.


Be Conscious of Fees and Minimums

You can and should invest even if you’re on a strict budget, but you need to be particularly aware of fees and account minimums that come with many investment platforms.

If you’re on a restrictive budget and you’re paying $10 per trade, that’s not optimal for you.

Also, you’re not going to be able to invest in funds or with brokerages with high minimum balances or initial investments.

First, look for investment platforms with minimal fees and investment minimums. A good option is something like Betterment, which keeps costs low and automatically rebalances portfolios.

You might also look at discount brokers instead of the big names. They usually not only offer low-cost and free services but frequently have competitive promotions going on as well.

Set Up Automated Transfers

If you use a robo-investing platform, you can deposit an initial amount to be invested in your account and then set up small, regularly deposited amounts to be invested each week or month. For example, maybe you invest only $1000 initially, and then you set up a transfer of $50 to be taken out of each paycheck and put into your investment portfolio. It may not seem like much, but it will add up over time.

Don’t Be Afraid of Risk

If you’re working with a limited amount of money, you may be extremely risk-averse, but a successful investment strategy typically depends on balancing your level of risk. If you’re a younger investor, you can also shoulder more risk since you’ll have more time to recoup losses.

Try experimenting with a riskier but potentially more rewarding investment strategy, such as penny stocks. You may not want to put all of your investible money here, but if you learn the ropes, you can actually make a lot more capital through riskier strategies.

Peer-to-Peer Lending

Let’s say you have $2,000 you can invest. You can build a diversified portfolio by investing in an ETF that follows a major index, setting up automated transfers to your brokerage account, putting a bit of your money in something riskier such as penny stocks, and then maybe putting a few hundred dollars into an alternative investment account.

A good option is peer-to-peer lending.

Peer-to-peer lending is an excellent opportunity for low-income investors because It’s relatively simple, you can invest as little as you want in most cases, and you can mitigate the risk by investing small amounts like $25 across several loans.

Above all else, if you are relatively low-income, don’t count yourself out of investing. Start with putting money aside, and then explore strategies like the one above to get started with investing. You don’t have to be making six figures to invest, nor should you wait until that time to begin.