6 Ways to Invest When You're Broke
Financial advisor Jeff Rose shares the six investments he made when he first started.
When Jeff Rose started his career as a financial adviser, his annual salary was just $18,500. Now a multimillionaire, he shares the answer to the question, “How do you start investing when you don’t have any money?” in this video. Rose’s advice:
1. Get rid of debt
Rose began his career with student loans and credit card debt. He paid it off with the debt snowball method, a debt reduction strategy in which you pay off debts in order of smallest to largest. Rose also advises limiting unnecessary purchases — setting boundaries by deleting shopping apps, for example — to prevent yourself from racking up more debt.
2. Have an emergency fund
Rose advises opening a savings account — ideally, one you can’t access online, and that would require a visit to your bank to withdraw money from. He suggests aiming for saving between three and twelve months’ worth of living costs to cover unplanned car, house, or medical expenses (and not a new iPhone). Rose started small, targeting $1,000 in savings initially, and then expanding it to a three-month reserve, then a six-month reserve, and so on.
3. Accelerate your learning
This and the following tips Rose describes as “income accelerators” and, if done correctly, can increase your income by 10X. He recommends learning about investing by reading books and taking online courses. Rose admits that self-guided research could achieve similar results but that courses present material in a time-efficient way, allowing you to expedite your learning curve. He recommends Udemy and Skillshare for courses that are frequently offered at discounts. Rose also suggests opening a Robinhood account, as the service is free at sign-up and provides useful information about investing.
4. Join a mastermind group
Rose explains that joining a mastermind group is to surround yourself with like-minded individuals trying to achieve goals similar to yours who are interested in supporting and encouraging each other. He says a good mastermind group provides challenges to your thinking and constructive feedback. Though some are paid, many are free and can be conducted online via Facebook or Slack.
5. Invest in relationships
Rose suggests making and nurturing professional relationships with both potential business partners and competitors. The focus of these relationships should be on providing value, asking yourself (and them) how you can help them achieve their goals.
6. Invest in a mentor
Rose explains that he’s unable to honor requests for mentorship as he is busy raising his children. Rose says his first mentor was Robert Kiyosaki, author of Rich Dad, Poor Dad, though they never met or corresponded. He suggests finding someone you admire whose approach to business and investments you can emulate. For a personal mentorship relationship, Rose reiterates the importance of offering something such as a cup of coffee or lunch and politely asking them how they achieved their success — and not asking for help if you have no intention of doing the work yourself.