Investing is not only for the wealthy. Though the majority of investors earn an average of $186,000 per year, it doesn’t mean that someone who makes $30,000 per year can’t benefit from investment income, too. However, investing does require some sacrifice and a little fiscal responsibility. Let’s look at a few guidelines on how even the lowest incomes can build a high-powered portfolio.

Spend less than you earn

Most of today’s American households are in debt. The average consumer carries a balance of around $2,000 in credit card debt. Spending less than you earn means cutting back, a task most people don’t want to do. However, if you can’t afford to pay cash, then you shouldn’t make the purchase. Another thing you can do is cut back on small expenses, such as your morning latte at Starbucks or your $10 lunch at the corner bistro. Start bringing your coffee and lunch from home and you’ll be surprised by how much money you save!

Make your money work for you

If you only have a checking account, you’re missing out on the dividends your money could be accruing. Financial advisers agree that you should not only have a checking account from which to pay your bills, but you should also have a savings account and an IRA.

Don’t underestimate the power of compound interest! In order to make the most of your money, keep just enough in your checking account to cover your monthly expenses and leave the rest to accrue interest in your savings accounts.

The two guidelines mentioned above are all it takes to begin investing. 

By living within your means and cutting back on purchases that are not essential, you can have the money you need and start investing, too, in no time at all.