How to start investing when you are broke


Investing is the only path to grow your capital, but how can you invest when you are broke?All you need to do is be patient and save.

I can already see your face, not too excited about saving? If by the end of this article you are still lacking the motivation to save make sure to read an article about Lisa Nichols, but for now hear me out. Saving can be fun and it can be successful. The reason people fail at saving is because they go in without a saving plan and as Benjamin Franklin said “to fail to plan is to plan to fail”. If you want to save money for the purpose of investing you are definitely going to need s solid plan. So in this article I am going to show you an example of how solid plan should look like and then the steps on how you can make one to fit your budget.

Casandra earns R1000 a month and she wishes to grow her finances over the next five years.

If she was to plan her finances for the next five years successfully her saving plan could look something like this:

Over the the next 12 months I am going to save 10% of income (it has to be a minimum of 10% of your gross income), therefore R100 a month. I will put this money is a Notice saving account. After 12 months I will have R1200 to invest. I will deposit it in an ETF account (you can choose which investment vehicle of your choice) which will have an return of 8% per year. I will continue to build this account by making monthly deposits of R100. After 5 years the total amount from my investment will be R9, 104.59. This is money I can re-invest in other investment vehicles to further grow my capital.

Seeing that  R1200 can lead you to over R9000 has to be motivating? That is why its very important to clearly state what your end goals is. Also you need write a solid saving plan so when you are demotivated you can still stay on track. This is how to write a successful saving plan :

  1. State how much money you want to save every single month. This is a fixed amount that you cannot compromise on. It should be a minimum of 10% of what you earn.

  2. State the period you plan to commit to your saving plan. (Are you saving for the next 2 years, the next 6 months?)

  3. State the method you are going to be using for saving. Are you going to be keeping your money in a fixed saving account, in a jar?

  4. State what the purpose is for your saving. Are saving to purchase stocks, to buy bonds etc…


​Success doesn’t happen over night, you need to stay focused and keep your eye in the prize. If you need help to stay on track have a look at our #MotivationalMonday articles as well  as to follow us in Twitter or Facebook for constant motivation.


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