Dear DTA,
I’m looking to get started with trading. But I don’t have a lot of cash right now. What’s the best way to start with not much money? Can I turn a little into a lot? How do I do that? Thanks.
-Ryan A.
Hi, Ryan.
Appreciate you taking the time to write in.
This is an exciting time in your life.
Taking advantage of opportunities. Building wealth. Buying time. Gaining freedom.
All of that could easily be in your future.
But you have to execute properly.
I understand you don’t have a lot of money right now.
But it’s not impossible to start with very little.
In fact, I personally started my investment journey with about $5,000 back in early 2010.
I’m not sure how big five grand sounds to you, but it’s not much in the grand scheme of things. Plus, I never had a high-paying job, Ryan. I used to work at a car dealership making a very middle-class income.
Regardless, I took what was a relatively little amount of money and turned it into the $400,000+ FIRE Fund.
The Fund is my real-money early retirement stock portfolio.
And it generates the five-figure passive dividend income I live off of.
Not only do I live off of dividends, but I live off of this passive income in my 30s.
That’s right.
I achieved financial independence and retired at 33 years old after taking a small sum of money and turning it into a much larger sum of money.
A much larger sum of money that generates money all by itself.
I was able to quit my miserable day job and pursue of a life of enjoyable passions at an incredibly young age.
You can read all about how I did that in my Early Retirement Blueprint.
That Blueprint lays out exactly how I executed everything.
Now, I’m not telling you all of this to brag.
Not at all.
I want you to know that you don’t need a lot of money to become wealthy, successful, and free in a pretty short period of time.
Again, though, it all comes down to building the right plan and properly executing.
As you’ll notice in the Blueprint, the investment strategy I used to get here has been critical to my own success.
That strategy is dividend growth investing.
This strategy is amazing for so many reasons.
Dividend growth investing is a strategy which advocates buying high-quality companies that pay their shareholders reliable and rising cash dividends.
The Dividend Champions, Contenders, and Challengers list contains plenty of examples of these stocks.
The list provides invaluable data on more than 800 US-listed stocks that have raised their dividends each year for at least the last five consecutive years.
Perform investment analysis to separate the best from the rest.
Buy stock in these companies when the shares are reasonably valued.
And hold for the long term, allowing dividend reinvestment and compounding to build a massive pile of wealth and huge stream of passive income over time.
I know it sounds simple.
That’s because it is.
But simple doesn’t mean easy; it’s difficult to regularly save and invest your money for years on end, Ryan.
If it were easy, everyone would be rich.
However, anything worth having is worth working hard for.
One thing you won’t have to work hard for is information.
We have you covered in that department.
Make sure to read through fellow contributor Dave Van Knapp’s Dividend Growth Investing Lessons for the complete lowdown on this strategy.
One thing I love about DGI is the fact that it doesn’t require one to have a ton of money.
You can get started with almost nothing.
Like I said, I had five grand when I began. And I could have started with even less.
With commission fees at most discount brokerages now at $0, there’s nothing holding you back.
Even buying a single share of a high-quality company is a good start toward building wealth and passive income.
By the way, you’ll never be short on high-quality companies to invest in.
I helm the Undervalued Dividend Growth Stock of the Week series, which is a weekly series that freely shares compelling long-term investment ideas.
I rigorously analyze and value every stock before I present an idea.
And many of these stocks cost less than $100 per share.
You definitely don’t need much money to start building serious wealth and passive income, Ryan.
But you do need to start.
I wish you luck and success.
Jason Fieber
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