How to Invest Like the 1% (Even if You're Actually Pretty Broke)

You can still invest like the 1% even if your piggy bank is pretty empty.
Updated April 11, 2024
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Investing like the 1% might seem like a distant dream when you're on a tight budget, but it's not as unattainable as it sounds. With strategic steps, you can build wealth over time and actually live the retirement you dream of in the future.

This guide will unveil how you can harness the secrets of the wealthy elite to start growing your own financial empire. Here are our favorite tips to help you get started, no matter how much money you're currently making.

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Prioritize your debt

Wayhome Studio/Adobe young couple reviewing bills at home

Before diving into investments, it's crucial to tackle high-interest debt like credit card balances. 

The 1% often avoid high-interest debt to maximize their investment returns. Paying down debt frees up money for investing and eliminates a financial burden.

Focus on clearing high-interest debt first while making minimum payments on lower-interest loans. This strategy reduces financial stress, enhances your credit score, and paves the way for more substantial investments when you're ready.

Start small and start now

Romolo Tavani/Adobe leaves on pennies saving money concept

You don't need a fortune to invest like the 1%. In fact, starting small is a savvy move. Many successful investors began with modest sums and gradually built their portfolios over time.

You can begin investing with as little as a few dollars. Starting early and consistently contributing to your investments, no matter how small, can lead to significant wealth growth, putting you on the path to financial success.

Automate your investments

Wayhome Studio/Adobe woman planning budget using smartphone

Emulate the 1% by setting up automatic transfers to your investment accounts. This disciplined approach ensures you consistently contribute, taking advantage of dollar-cost averaging.

By steadily funneling funds into your portfolio, you harness the power of compounding, potentially growing your wealth substantially over time. 

Whether it's a retirement account or a brokerage, automation simplifies your journey to financial success, making investing a habit rather than a sporadic effort.

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Diversify your portfolio

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The wealthy understand the importance of not putting all their eggs in one basket, and you can too. Diversification spreads your investments across different asset classes, reducing risk.

Even with limited funds, you can create a diversified portfolio by investing in various assets like stocks, bonds, and real estate investment trusts (REITs). 

Diversification helps your portfolio weather market volatility and enhances your chances of long-term success.

Embrace dollar-cost averaging

FellowNeko/Adobe stock market graphs on smartphone screen

The wealthy know the power of consistency. Instead of trying to time the market, they often use dollar-cost averaging. This strategy involves investing a fixed amount at regular intervals, regardless of market fluctuations.

By doing this, you buy more shares when prices are low and fewer when they're high, ultimately lowering your average cost per share over time. It's a smart way to reduce the impact of market volatility and steadily grow your investments.

Invest in low-cost index funds

mrmohock/Adobe businessman saving pennies in glass jar

Low-cost index funds, which track the performance of an entire market, are a popular choice among the wealthy. These funds have lower fees compared to actively managed funds, allowing you to keep more of your hard-earned money working for you.

With index funds, you can enjoy diversification, reduced risk, and steady, long-term growth without the burden of excessive fees. It's a strategy that aligns with the 1% and benefits investors of all backgrounds. 

Even Warren Buffett says most people should stick with an S&P; 500 index fund rather than try to pick individual stocks.

Explore robo-advisors

zaschnaus/Adobe robot analyzing business data

You don't need a personal financial advisor to invest like the 1%. Robo-advisors are automated investment platforms that can create and manage a diversified portfolio for you.

They use algorithms to optimize your investments based on your risk tolerance and financial goals. These platforms often have lower fees than traditional advisors, making them accessible for those on a budget.

Educate yourself

ckybe/Adobe aman analyzing data graphs on laptop

Knowledge is a powerful tool in the world of investing. The 1% often invest with confidence because they understand the markets. You can read books, take online courses, and follow reputable financial news sources to catch up. 

Understanding investment principles, risk management, and market trends will empower you to make informed decisions. By investing time in your financial education, you can navigate the complexities of investing.

Leverage tax-efficient strategies

brizmaker/Adobe senior couple reviewing bills together

The wealthy often use tax-efficient investment strategies to maximize returns. 

Explore options like tax-advantaged accounts (such as IRAs and 401(k)s), which offer tax benefits and can grow your wealth more effectively than standard accounts. 

By implementing smart tax strategies, you can keep more of your investment gains, allowing your wealth to grow faster and more efficiently.

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Cut unnecessary expenses

successphoto/Adobe man calculating expenses using calculator

To invest like the 1%, start by scrutinizing your expenses. Identify and trim any unnecessary costs, from subscription services you rarely use to dining out excessively. 

The money saved can be redirected into your investments, accelerating your wealth-building journey. Remember, the 1% prioritize financial discipline, and cutting unnecessary expenses is a powerful way to fund your investments, even if you're not starting with a massive fortune.

Invest your windfalls confident woman counting dollars on street

When you come into unexpected money, such as a tax refund or a bonus, don't splurge it all. The 1% know the value of capitalizing on windfalls. Allocate a portion of these funds to your investments to accelerate your wealth growth.

It's a strategic move that can substantially increase your net worth in the long run, even if you're not starting with substantial wealth.

Stay the course

fizkes/Adobe african american woman reviewing tax documents

Patience is a virtue, especially in investing. The wealthiest individuals understand the power of holding onto investments through market fluctuations. 

By avoiding knee-jerk reactions to market ups and downs, you can benefit from the long-term growth potential of your investments.

The 1% don't panic-sell during market downturns; they stay the course. This disciplined approach allows their investments to recover and thrive over time, ultimately leading to substantial wealth accumulation.

Network and collaborate

VideoFlow/Adobe colleagues discussing project using tablet

Networking isn't just about making friends; it's a powerful wealth-building tool. The 1% often engage in collaborations and partnerships that amplify their resources and opportunities. 

By connecting with others, you can access new investment opportunities, gain valuable insights, and even pool resources for joint ventures.

Building a strong network opens doors to valuable connections, potentially leading to lucrative investments that can help you grow your wealth, even on a limited budget.

Consider side hustles

ChayTee/Adobe woman unboxing package on live video

The 1% often diversify their income streams beyond traditional investments. Side hustles can boost your earning potential significantly. 

Whether it's freelancing, selling crafts online, or offering consulting services, these endeavors can provide extra funds for investment.

A side hustle doesn't have to be a full-time job; it can be a passion project that generates income. By exploring these opportunities, you can increase your financial resources and accelerate your journey toward investing like the 1%.

Seek professional advice when needed

Drazen/Adobe couple consulting female finance advisor

Even the wealthiest individuals consult financial experts. When it comes to investing, consider seeking advice from a certified financial planner or advisor. 

They can help you create a personalized investment strategy, navigate complex financial instruments, and ensure your investments align with your long-term goals.

While professional advice may come with a fee, it can save you from costly mistakes and supercharge your bank accounts.

Bottom line

Bojan/Adobe man analyzing business graphs using laptop

Achieving the investment success of the 1% requires diligence, patience, and smart financial choices. Start small, stay informed, and leverage opportunities to grow your wealth. 

While it won't happen overnight, your dedication can lead to financial prosperity and less money stress.

Do you think you might need to make some changes to up your investing game? It’s not too late to start with these tips above. So, begin your journey toward financial abundance today.

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Author Details

Adam Palasciano Adam Palasciano is a personal finance-obsessed and money-savvy individual who loves to hash out content on all things saving money. He specializes in writing millennial-friendly personal finance content, covering topics ranging from trending financial news, debt, credit cards, cryptocurrency, and more.

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