Among the significant changes that have opened up investment to more people are: the digitization of brokers (online versus traditional brokers), lower minimum amounts required, commission structures, and fractional investing. This last point has become increasingly important because it allows you to buy a portion of a share instead of having to buy the entire share (you can read more about Fractional Shares here.)

Myths about investing

You don’t need to be rich to invest. Platforms like Hapi allow you to start without a minimum amount (starting at just US$1) and without paying transaction fees. In addition, Hapi is one of the few brokers in LATAM that offers fractional investing, so you can become a shareholder of big companies with whatever budget you have at hand.

What steps should you take if you're thinking about investing?

Before starting, you should create a monthly budget. This means setting up an investment plan that takes into account the reality of your financial situation and your goals. This step is crucial to determine how much you can allocate to investing without compromising your financial situation (Tip: only invest money you won’t need for at least six months, and that is surplus from your savings). Given the personal nature of a budget, there isn’t a one-size-fits-all approach, but there are some "best practices" you can consider when setting your strategy. One of them is the 50/20/30 rule, which involves dividing your monthly income into spending percentages: 50% on needs, 30% on wants, and 20% on savings.

Once you’ve decided how to manage your budget, the next step is to eliminate any credit card debt you may have. The reason for this is to avoid having your gains go towards covering the high interest generated by this type of debt.

Finally, if both your budget and debts are under control, a last step before investing is to set aside 3 to 5 months of basic monthly expenses in case of an emergency.

How much money do you need?

As we mentioned earlier, this depends on your financial situation and your goals. Technically, you can start investing with as little as US$1 thanks to platforms like Hapi, which don’t require investment minimums, don’t charge commissions, and allow you to buy shares in fractional amounts.

What are the benefits of starting with little money?

It doesn’t matter if you're just starting out or starting with a small amount—thanks to compound interest, you’ll see your investment grow over time. This is due to the interest earned on top of the accumulated interest, which over time becomes capital, gets reinvested, and then generates new interest.

What are the disadvantages of investing with little money?

The main disadvantage of investing with little money comes when your risk tolerance is low. You may face the challenge of "dealing" with the frustration of short-term market volatility. This is why the steps to understand your financial reality, set a budget, and address high-interest debts are important before you begin investing.

There is no right answer as to when and how much you should invest. The good news is that if you're able to do so, today you have tools at your disposal that allow you to access the stock market quickly, easily, and safely so you can get started.