Is it worth investing with little money? – 10/16/2020

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Investments are becoming cheaper and more accessible in recent years. With less than R $ 100 you can access the best fixed and variable income investments. Even with all these facilities, one of the questions I get the most is: “Is it really worth investing with little money?”.

Most Brazilians are currently unable to invest, so any amount you keep on a monthly basis already makes you above average. Having money saved to save you from emergencies or problems will make your life a lot easier and will take away your big headaches.

Three factors

When we think about investments and increase in equity, we always need to keep in mind that there are 3 factors that make the difference at this moment, and they are the mechanisms behind compound interest: the profitability of your investments, the time you invest and how much invests monthly.

The first 2 factors, profitability and time, can compensate for the fact that you invest little money, but they are limited. You can increase the profitability of your investments, but if you do it the wrong way, you end up taking too many risks and you can lose money.

Time is the strongest factor

Time is the strongest factor when it comes to compound interest, but we have to remember that for the time being it is not possible to go back in time or advance in it. Therefore, the most controllable factor among the 3 of compound interest is the amount invested monthly.

If you invest little money, you cannot expect a miracle with your investments. You will have to overcome this difficulty by increasing the profitability of your applications or the time invested.

So I recommend to anyone who is investing little money today to change the focus. Instead of saving that money in an investment that you will use 20-30 years from now, use it to leverage you in your business and your profession.

Improve your qualification

It is much more worthwhile to use the money you would use to invest and dedicate it to improve your professional or business qualification and increase your earnings to save more monthly there than to go through hardships today to invest little.

By doing this, you not only increase your wealth in the long run, but you also manage to increase your standard of living and leave your budget looser for eventualities and problems that usually arise in your daily life.

If you are going to follow this path, it is very important that you have at least the emergency reserve well structured. It will provide support in case you have any unforeseen circumstances and will save you from unnecessary loans and debts.

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