Is Saving $20 a Week It? Building Passive Income with Stock Worth Investments

Today, many of us imagine being rich and turn to investing to achieve this dream. On the other hand, some of us do not have that much money that could make a difference. Or do we? You might think you need hundreds of dollars to make a solid investment but there are other ways. Today, I’ll talk about what you can achieve with as little as $20 if you make smart investments.

Compound Interest Might Be Your Best Friend

Compound interest is one of your best friends if you don’t have that much to invest every week. Basically, it allows you to earn interest from your initial amount and the accumulated amount on your account. In simpler terms, it allows you to earn interest on your interest. Let me give you an example: Let’s say you invest $100 with a 10% annual interest rate. Next year, you would earn $10 in interest. In compound interest, your interest would be calculated based on your current balance. So, instead of getting another $10 for your initial $100 investment, you would get $11.
As you can see, it might be a great way to increase your income with smaller amounts. After a while, it will cause a snowball effect and you’ll earn much more than it is possible with traditional interest. There are various interest periods like annually, semi-annually, quarterly or sometimes even monthly. It is especially beneficial for longer-term investments as it gives them more time to snowball.

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