People are often under the impression that, to start investing in the stock market, you need to have a lot of money. The idea is that, to build wealth, you need to start with wealth.

These myths couldn’t be further from the truth, as those with even the smallest of budgets can start getting involved in investing.

Here we’ll take a look at how you can build wealth on a budget, not letting it act as a restricting factor in reaching your financial goals.

The Earlier You Start Investing, the Better

If you’re working with a small budget, one of the best tips is to start investing as early as possible. This gives your investments more time to build and accumulate wealth over time. If you have the goal of building wealth that can be used in your retirement, there is no such thing as investing too early in life. Wealth can take time to build, even decades, depending on the types of investments you choose.

Starting early also helps you create a habit of putting aside a specified amount of money each week or month to be used for investments. Just make sure you’re not taking money away from an emergency fund or for paying bills. All essentials need to be covered first.

Use Your Tax Refund to Invest Each Year

Another tip that can pay off in the long run is to use your tax refund as investment dollars. A tax refund may be money you weren’t counting on and therefore hadn’t worked in the budget. It makes perfect sense to then take it and invest in your future. You can turn that extra money into even more money.

Learn About the Different Types of Investments

Here’s where things can get pretty confusing: did you know there are all kinds of different investments? Some options include individual stocks, mutual funds, and index funds. What’s right for you will be dependent on your financial goals, what type of investor you are, and how much money you want to invest. And remember, your answers and goals may change over the years as you have more or less disposable income available to you.

Choose Low-Risk Investments That Mature Over Time

As you learn about the different types of investments, you may want to focus on low-risk ones. These aren’t the ones that grow quickly and provide a fast turnaround; instead, they take time. These work particularly well for people focused on retirement goals.

Some examples of low-risk investments include:

• U.S. Treasury Bills, Bonds and Notes
• Treasury Inflation-Protected Securities (TIPS)
• Series I Savings Bonds
• Money Market Mutual Funds

Make Use of Online Tools and Information

The internet can also be a great resource for beginners that need a little help. You can find a wealth of free information and advice that helps you make better decisions. 

Online tools such as a calculator for your dividend stock portfolio will do all the work for you and give you a clearer picture of what your investments will look like over time. These types of online tools allow you to plug in all the details such as your starting principal, your contributions, investment type, etc., so that you can get an instant calculation. 

Don’t Let a Limited Budget Hold You Back

The takeaway here is that a small or limited budget shouldn’t hold you back from making smart investments. Many people start with small investments and build on them over time—it doesn’t mean they won’t pay off in the long term. Building wealth takes time, smarts and a little bit of risk-taking on your part.