Dear DTA,
I don’t have a lot of cash. And I’m stuck on a tough choice. I’m thinking about either investing in stocks or starting my own business. I don’t have enough money for both. Any advice? Thanks!
-Josh F.
Hi, Josh.
Appreciate you writing in. Thanks for your readership.
You have a super interesting question there.
However, I think you’re needlessly making this an either/or situation.
You can invest in stocks. And you can start your own business.
They’re not mutually exclusive endeavors.
Both can be done simultaneously – with not much money!
With major online discount brokerages now offering free stock trades, one can buy a share or two of a world-class enterprise with basically pocket change.
Meanwhile, many businesses can be started with very little money.
Now, it depends on what kind of business you want to start.
If you’re aiming to start a business that’s extremely capital intensive, my advice won’t apply.
But why would you do that?
In the digital age, a high-margin online businesses can be built out in a day. It’s an incredible time to be alive for enterprising entrepreneurs who are tech savvy.
I’ll give you some examples from personal experience.
First, let’s talk stocks.
I started investing in stocks back in early 2010.
Josh, I had very little money. In fact, I was in debt when I started. I was worth less than zero.
But I didn’t let that deter me.
By following the steps I lay out in the Early Retirement Blueprint, I went from below broke at 27 years old to financially free and retired at 33.
I now control the FIRE Fund.
That’s my real-money early retirement stock portfolio.
It generates the five-figure passive dividend income I now live off of.
The investment strategy I followed – and still follow – requires very little money to start with.
That strategy is dividend growth investing.
It’s a strategy that is so simple and intuitive, it’s like this epiphany that hits you right over the head when you find out about it.
Fellow contributor Dave Van Knapp explains the A-Z of DGI in his Dividend Growth Investing Lessons.
Make sure to read through all of that to find out how to use this strategy to methodically build a lot of wealth and passive income in relatively little time, with relatively little money.
This strategy essentially advocates buying and holding stock in world-class businesses that pay shareholders reliable and rising cash dividend payments.
The Dividend Champions, Contenders, and Challengers list contains invaluable data on hundreds of these stocks.
You buy stock at an appealing valuation, after performing a full analysis.
Then you hold, collect your growing dividend income, reinvest, and wait.
It’s simple. But it’s not easy. And it does take time.
However, anything worth having is worth working hard and waiting for.
Plus, you’ll never be short on ideas.
The Undervalued Dividend Growth Stock of the Week series, which I helm, releases a full report on a compelling idea every Sunday.
Let’s now talk entrepreneurship.
I don’t know anything about your passions or skill set.
But great entrepreneurs take advantage of opportunities. And opportunities are all around you.
I’m currently living in Chiang Mai, Thailand.
It’s a bit of a mecca for “digital nomads”.
These are people who build online businesses and then travel the world while they scale up these businesses.
Not all of them are successful. No doubt.
But I’ve met quite a few people who built very profitable businesses with almost no starting capital.
Think SaaS, blogging, vlogging, social media management, digital marketing, virtual assistants, FBA, etc.
Again, none of that is easy. And all of it does take some time to see success.
But it can be done. The more you want it, and the harder at it you work, the more likely it is that you’ll succeed.
I’d know it can be done.
Because I did it.
As I noted earlier, I started investing in early 2010.
Well, I started my entrepreneurship journey one year later, in early 2011.
I began blogging about achieving financial independence and early retirement by living below my means and investing in high-quality dividend growth stocks. By the way, I started my first blog with no money.
My dream was to live off of dividends.
Other people shared that dream.
And I was able to build a small online business around a common vision by providing value and inspiration.
There is no reason you can’t do something similar, Josh.
Lack of money won’t hold you back.
But lack of motivation will.
I’ve never met a hard worker who couldn’t get ahead in life.
However, plenty of people have squandered fortunes.
So use what resources you have, work hard, and make things happen.
Oh, one last thing.
Start today.
I wish you luck and success.
Jason Fieber
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Disclaimer: Jason Fieber is not a licensed financial advisor, tax professional, or stock broker. Please consult with a licensed investment professional before investing any of your money. If your money is not FDIC insured, it may decline in value. To protect the privacy of our readers, any names published in this article are under aliases. In addition, text may be edited, omitted or paraphrased for grammar or length.