How to start investing - even if you have no savings

Dec 9, 2021

(Art credit: Karen Fischer, "Skim Skirmish")

Investing is essential and can be the difference between retiring and not retiring. Everyone needs it, even if you have no money saved. After working with freelancers for more than 20 years, I’ve seen plenty of hesitation about investing and specifically for retirement. My first piece of advice: Make it a priority! Keep reading and we’ll show you how.

Before you begin, make sure you have an emergency fund. Ideally, freelancers need a minimum of nine months of expenses saved in a savings account. If this is overwhelming; don’t worry - assign it as an ongoing goal but still get started with investing.

Consider a high yield savings account (FDIC insured) such as, and Right now they are paying approx. 0.50% interest, which is higher than most banks. More importantly, putting that money in a savings account makes it harder to get to so you won’t spend it as easily! Another easy freelancer tip: While you are setting up your emergency savings account, create one for taxes.  Every time you get paid, put at least 20% into this account. When quarterly tax time rolls around, the money is set aside.

The next step is to open an investment account. Think of these investments as money you won’t touch for at least three years. There is a tremendous amount of volatility in the markets, but if you don’t need your money for at least that time, you can handle the ups and downs of the market and can make more in the long term. Take, for example, the S&P 500 index - a group of the 500 most actively traded stocks and one of the most popular types of investments. The average returns of the S&P 500 over 20 years has been 7.45% a year! If you started with $1,000 and put it in a savings account, you would only have $1,105 after 20 years. If you invested it in the S&P 500 instead, it would be $4,209. That’s a lot of money to leave on the table!

The long list of places to open an investment account can be an obstacle; these options will easily get you started:

1. Vanguard and Fidelity are the largest mutual fund companies. They offer a wide selection of funds that are the cheapest in the industry: minimums to open are $1,000 and $0, respectively, and afterward you can add as little as $25 at a time.

2. Another suggestion is robo-advisors. My favorites are Ellevest, Wealthfront and Betterment. Their fees are 0.25%/year (also super low) and their minimums to open range from $0 - 500. Once you open the account, share your goal or timeline (i.e., 3 years or 10 years) and they will invest it accordingly. Great choice for those who want to set it and forget it.

3. A third option is a combination of savings and investing. The Acorns app has been a great resource for my freelance clients who want to save AND invest at the same time. It rounds up your debit or credit card purchases on a linked card to the nearest dollar and invests the change. For example, if you charged $3.50 at Starbucks, you would get charged $4.00 and they would invest the $0.50. They have a range of investments from safe to aggressive and even ESG (environmental, social and governance). My clients that use it are pleasantly shocked at how much they save AND invest without thinking about it! There is a monthly fee, which I’m not a fan of, but overall, this will easily jumpstart your investing.

Once you’ve opened the investment account, let’s pick an investment. Most people start with a mutual fund - a group of stocks and bonds. The benefit is diversification (spreading your risk over multiple stocks). Keep your fees low by sticking to index funds. Many start with the popular S&P 500 index fund. Another preferred mutual fund for first time investors is an Allocation or Balanced mutual fund. This combines stocks and bonds but still returns an annual average of 5-7%. If you decide to open a retirement account, an ideal investment would be a Target Date Retirement Fund based on the year you want to retire. You don’t have to keep it in the fund that long, but if you do, it’ll match your timeframe.

Lastly, link your checking account to the investment account you just opened and add to it automatically every month - the amount can be as small as you need, just make it a priority to do regularly. You won’t miss the money, and it’ll add up so easily as you invest in the market every month. I often hear from freelancers that they are hesitant to take this step, but you won’t miss this amount on monthly basis - I promise!

Let’s get started and meet in 6 months for a financial checkup.

Galia Gichon

Galia is a Personal Finance expert with 20+ years experience in financial services and women-led startups. On the personal front, she recently published her debut novel, “The Accidental Suffragist."