By Lucas P., European real estate investor, active trader, and owner of Ampleinvest.com, a review and comparison for peer-to-peer lending, cryptocurrencies, and online brokers.

Growing up, I assumed “investing” was strictly for the silver-haired billionaires celebrated on the pages of Forbes. I couldn’t imagine anyone could be an “investor” with as little as the cost of a cup at your favorite barista.

Well, now I’m older, and hopefully wiser, I know you don’t have to wait to inherit a staggering fortune to start investing. I know that to move a mountain, you begin by carrying away small stones. I know that you can swap the fancy, overpriced restaurant meal for healthy, homemade dishes and put the extra money saved to work for you by means of modern technology.

You see, the time-tested way to wealth is through saving and investing. Although you could win a lottery, I’ll implore you not to put all your hopes on that. And if you don’t have wealthy relations about to kick the bucket and will all to you, you should start saving and investing. The trick is to start right where you are, with the little you’ve saved up and watch your money multiply aided by the magic of compound interest.

It even gets better.

Technology has presented the average joe, with just a few Euros at his disposal, many options, and choices for investing. So much so it could be confusing knowing where to put your money. In the following paragraphs, I’ll be showing you practical ways you can get the best out of your savings, even if it’s as large as an ant’s heart.

1. Lend money to others with peer-to-peer lending

Peer-to-peer lending platforms have changed the way we borrow money. Instead of spending several hours hunched down with your loan officers and going through tons of paperwork, you simply register with a P2P platform that will match you to an investor with cash to lend.

This circumvention of bureaucratic bottlenecks encountered with banks and credit unions has made peer-to-peer lending popular with both investors/lenders and borrowers.

Here is how it works.

Borrowers go to a peer-to-peer lending site and fill out an online application for a loan. Their information and loan details are made available to prospective investors who then decide on the loans they’ll want to invest in. Loan pricing depends on the allocated credit grade after extensive evaluation. These grades are based on factors such as borrower’s credit score, loan amount, loan purpose, income (debt-to-income ratio), and loan term.

If you have little money to spare for investing, P2P lending is just the right investment for you. You don’t have to invest in whole loans; instead, you can buy small slices of loans in the form of notes with as low as €10. This helps you spread your risks across different loan notes to mitigate concentration risk in the event of a default.

While the return on investment for P2P sites is higher than average – up to 12% per annum, you have to be mindful of the risks involved in investing in loans.

2. Become a landlord with real estate crowdfunding

Yes, you can own properties without being stinking rich. Real estate crowdfunding allows you to be a landlord with little money and, at the same time, avoiding the headaches associated with being a property owner.

There’s been substantial growth in the relatively new real estate crowdfunding market, with so many platforms launching in recent times. Real estate crowding platforms act as sponsors of real estate deals. The scout for the right property, raise funds through individual investors, buys, and manages the operations while investors contribute most of the financial equity.

As a small investor, you leverage the power of crowdfunding to participate in massive real estate projects that otherwise would have been way out of your league.

Sponsors and investors share profits from rental income and property sales. The rental income is distributed periodically as agreed. Property values typically increase over time, and so does rental income. Investors may earn a hefty profit when the property is finally sold.

Ease of access means you don’t have to go through piles of paperwork. You just pick a real estate crowdfunding platform, log on to their website, research available properties, and place your investments. All with only a few clicks and swipes from your smartphone. Returns on investment are not bad either. You can earn up to 14% p.a in some deals. You can start investing with as little as €50 on most online real estate crowdfunding platforms. This low minimum investment also enables you to mitigate risk by adequately diversifying your investment across different property types and locations.

3. Consider mutual funds or Exchange-traded funds (ETFs) over individual stocks

A mutual fund is a type of financial instrument consisting of funds pooled from many investors to invest in stocks, bonds, money market instruments, and other assets. They are run by professional money managers who aim to make income for the fund’s investors by skilfully allocating the fund’s assets. As a small, individual investor, a mutual fund gives you access to a professionally managed portfolio of bonds, equities, and other securities for a share of the gains (and losses sometimes).

Much like the mutual funds, ETFs are made up of a combination of different assets and give small investors access to a diversified managed portfolio. Rather than buying shares of individual stocks, investors purchase shares in the ETF for an equivalent portion of its total value.

However, unlike mutual funds, ETFs can be bought and sold on the open market like stocks and bonds at any time. While mutual fund shareholders can only redeem shares with the fund directly.

If you’re starting out investing with little money, mutual funds and ETFs offer distinct advantages over buying individual stocks.

Here is why:

There’s no better way to minimize your risk than diversifying your portfolio. With mutual funds and ETFs, your portfolio is instantly diversified because they invest in varieties of securities. Unlike stocks, you can buy units in a mutual fund or ETF with little money and access up to hundreds of different securities. To match this on the stock market, you must invest a considerable amount of money. Brokers will take the same commission for a share as they will receive for 5,000 shares. With little money to invest, you’ll be hard-pressed to buy over 20 different stocks.

Secondly, your cost is considerably lower since you split trading costs with other investors. And lastly, you may not have the time or energy to deal with the extensive research and complicated deliberations involved in selecting a winning stock. The portfolio manager does all the work for you.

4. Build a side income

Imagine what an extra income each month will do to your financial situation. You could use it to press down your debt, save up towards a down payment for a house or a car, or even use it to buy your freedom. Cutting down your expenses will only take you so far. But to increase your savings and improve your finances, you just have to increase your income. And there’s no better way than starting a business on the side.

Luckily, you can build a side business while working a full-time job with little or no money.  However, you’ll require lots of grit and time to get it off the ground. The best thing about building a side income is that with time, you may be able to ditch your 9 -5 and become self-employed. You can then live your best life while doing what that you’re passionate about – work that is meaningful to you.

Most businesses you can start on the side require nothing more than an internet connection, skills, and a winning mindset. The list is endless. From freelancing to flipping on eBay to Dog Walking, there is undoubtedly something that will light your flame. Something that aligns with you specific skill and experience, passion, and interest. When you find it, brush up on the needed skills through free youtube videos, affordable online courses, or a mentor. And most importantly, show up daily.

5. Invest in yourself

Investing in real estate, stocks & bonds, mutual funds ETFs, or any other profitable venture is a sure path to wealth. But even better, investing in yourself assures not only monetary gains but also better overall life satisfaction.

Making an effort to invest in yourself requires a lot of discipline and consistency. However, if you keep at it, the payoff is often huge. You’ll become more productive, successful, satisfied, and live a higher quality of life.

Prioritizing your personal and professional growth is the springboard for other significant life achievements. Adopt the Japanese principal of Kaizen – continuous, incremental improvement in all facets of your life. This principle can be applied in learning a new skill or improving on existing ones, nurturing your body and mind, exploring your creative side, and managing your finances.

Self-development doesn’t have to cost an arm or a leg. There’s an affordable online course for any skill under the sun that you want to learn. And you can also make use of several free online resources to advance yourself. But you must take action for any growth to happen.

Conclusion

Having little money shouldn’t be an excuse to put off investing indefinitely. Technology, in the form of the online and app-based platforms, has ushered in an era of easy, low cost investing tools that anyone with a decent smartphone can take advantage of. Start small, start with what you have, and, in a few years, you’ll be glad you did.