Investing- with a small amount of money


You did all the right things: went to school, got good grades, landed that oh so elusive first job and began running on the track toward success. You’ve managed to skimp and save bits and pieces from the morsels you’ve received for your efforts. You have a small amount stashed and lately all this running has got you feeling like Harvey the Wonder Hamster. People often ask questions like: “I have a small amount of money (read $200/ $1000/ $2000/$5000 USD etc), what can I invest in to become financially free?”  Having asked that question myself, scoured the globe (read research/ books/ seminars/ trainings,  countless meetings with financial advisors and several financial missteps), and still being on the quest, I have arrived at a somewhat unorthodox view on the approach to be taken with small lump sums or financial nuts. Below are my thoughts:


Invest in your self

When you are starting out on your financial journey, the best person you can invest in is you. Instead of looking for someone to give your hard earned cash to, I vote YOU for President of your financial state. Further your studies in an area that will put you at a greater advantage toward earning more. Learn a new skill. I know of several small and part time entrepreneurs who have built viable small businesses from skills learnt in areas such as: graphic design, sewing, carpentry, interior decor etc. Find something you’re curious or passionate about and explore the hell out of it. When you do what you love, you will never have to work a day in your life. Set yourself up for success. Also, you can find inexpensive business options to invest in for yourself. I remember my days of doing network marketing. It was a powerful platform to earn real income. It afforded me the privilege of forming solid relationships, some I hold dear to this day and also taught me the value of focusing on personal development. So, even though I did not become the next Holton Buggs (highest earner in network marketing, earning in excess of $1.3M USD per month), I became a better version of me.


Pretend like it doesn’t exist

Albert Einstein was quoted as saying that “compound interest is the 8th wonder of the world”. This basically puts forward the view that when it comes to investing, time is your greatest ally. There is a principle called the rule of 72, it basically is used to give a rough estimate of when a sum of money invested at a particular rate of interest will double if compounded. You divide 72 by the interest rate per annum to get the number of years. As an example, if $2000 USD is invested at 6% per annum it will reach $4000 in approximately 12 years (72/6=12years). However, even at a very unrealistic and highly optimistic rate of return like 12% per annum we would need all of 6 years (72/12= 6 years) to turn $2000 into just $4000.  It’s not rocket science then to note that relying solely on a small sum of money as the main source of investment to secure one’s financial independence is foolhardy. So your best course of action is to lock this away into some safe instrument or account and do the following step.


Take massive action

Jim Rohn, famed American entrepreneur, author and motivational speaker is quoted as saying “We get paid for bringing value to the market”. Money is a reflection of the energy you put into the market place. Your greatest resource then when your financial currency is low is to use the currencies of energy and creativity. Think of ways that you can serve a market. What great pain is there that you can alleviate? When you see an opportunity, go for it like your financial life depends on it, because it does! Take massive action. People have met financial success doing many different things. Financial success is in the middle of the town square. The whole matter of success then is less about whether this road can take me there, but rather when will I start my journey. For any path once undertaken with purpose, in the right way and with persistence will take you to the center of town. Seek advice from those who have done it before. If you wish to become a baker, research all you can about baking. What will make your cakes different/ more appealing? Life is also such that if it doesn’t work out for whatever reason, you can begin afresh. Take the lessons and just keep moving toward the center of town. When you are starting out on a new path it is expected that your effectiveness will be low. If you are in sales, you will hear more NOs than YESes initially. Until you have mastered your craft, your only strength then is productivity and action. Make more calls. If you need to make 10 sales to reach your quota and you get 1 YES in every 5 calls, you only need to make 50 calls to be a star. Get moving…


So to sum it all up, it is a very good thing to begin saving at an early age to benefit from the powers of compounding. However, when you are just starting out and have a small financial nut, the best thing you can do is to keep doing things. Invest that small sum in you and take steps to increase your income. Your real currencies are your energy, creativity and time. Wait until you get to a meaningful financial nut before taking on complex investments. Pretend like this sum doesn’t exist and get right back to working.

What’s your take on investing with a small amount of money? Is there anything you’d like to add? Feel free to leave a comment or query below.


7 thoughts on “Investing- with a small amount of money

  1. Great article. Investing in yourself is very important….try and keep learning you never know when you will need a new skill


    1. The single most important thing you can do is get an education. Not necessarily a formal education either with degrees and designations. Learning an actionable relevant skill is critical toward increasing the value we add and as a result the income we make.


  2. This is a well written piece. I applaud the writer We should all apply it in someway or another because financial independence is worth it. Let us all be brave and try.


  3. It is interesting how scary it can be to “invest in self”. You can either use 1.5 million to do a masters and increase your earning potential or you can do what most of us do with our first 1.5mil (which normally comes as a loan lol) and we buy a car that devalues every year, and just as the car becomes ours (loan is all paid up ) what do we do ? we sell our asset . Many of us have a craving for doing something for ourselves, the fear of stepping out and doing you can be so debilitating at times that we spend the majority of our work life where we dont want to be, not realizing that that is where we spend most of the day. It leads one to wonder, are some of us just made to be hamsters on the employment wheel? Is it that we only see employed to unemployed? are we blinded to the step of employed to self employed?
    You are right though, taking bold steps start with investing in self, and the best way is through education. The irony sometimes for me comes in the fact that the people who are willing to walk off jobs and the ones of us that are bold enough to go ‘try a ting’ are the the ones of us with less formal education. It is all such an interesting dynamic that comes down to “self”. Great read as usual, very thought provoking.


    1. Hi Trudes. I say go for any investment in self that will increase your value. If you are in a position to later increase your productivity or better appeal to the market place you will recover any such investment. It is advisable to minimize your spend on RRD objects, that is objects that rot, rust and depreciate. These actually cost you money to keep and lose value over time.

      Regarding the move to step out into the realm of entrepreneurship, anyone so bold is to be lauded for their drive and courage. When the timing is right, I say go for it. It is notable though that this timing varies by person and by business.

      It is my view that everyone can become financially free and step off the wheel. However, we should not discount the fact that several persons are happiest being an employee. As Robert Kiyosaki posited in his book “Rich dad, Poor Dad”, there are actually 4 options in the cashflow quadrant: Employee, Self Employed, Business Owner and Investor. You can become financially independent in each of the 4 quadrants. The two that give you the greatest chance to do so though are Business Owner and Investor. The challenge is that they both come with greater risks and somewhat require capital.

      Self employed and employee, whilst both noble offer less leverage and scale. It should be noted that some persons trade off working for others to be self employed and literally still in a job. That is because the productivity of the operation require their input constantly and they have not yet put in place systems so it can operate like big businesses do. These persons are more interested in control and in putting their efforts to a cause of their own. The highly accomplished and awarded business leader Douglas Orane, former CEO and Chairman for Grace Kennedy was quoted in an interview as saying that he could have easily started his own business, but preferred working for GK. He stated that if he was to go off on his own and start a business, it would look identical to GK, so he opted instead to build on what was there and move the company forward. He expressed that he is very happy and is also financially independent.

      It is instructive then to remember that there are many roads to financial success and you can get their on any. Once you have found one that works for you, work it like there’s no tomorrow.


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