Increasing your income will make you liquid. Decreasing your expenses will keep you solvent. Saving will make you secure and comfortable. Investing will deliver you to wealth if done right. But unlike the three activities that precede it, investment tends to have a barrier to entry. I believe we all want to be part of the best investments. We surely all want to grow our money 15%, 20% or more every year. We have to be honest about the state of incomes in Zimbabwe on average and realise that we don’t always have large amounts to invest. This makes investing very difficult for most. Difficult but not impossible. So if you consider the amounts you have available to invest as small we should discuss how to invest with small amounts of money.

The problem isn’t just that the amounts of money we possess are small. It expresses itself in two things. Firstly the investment opportunities that are worthwhile such as real estate have hefty entry requirements, to say the least. It demands a lot. Secondly, when you look at options like the stock market and other paper investments you will find that the companies worth investing in intend to ask for high amounts as well. So you are punished for being of humble means and trying to improve them. However, there’s something I think many people don’t understand that matters here.

Investing is a habit

Stories are great ways to convey information in a way people can synthesise. We use stories because they communicate more than facts, they communicate feelings and lessons. However, stories more often than not exclude a lot of information in favour of passing on a message. Let’s look at a Zimbabwean story that has inspired a lot of people this year; Unifreight. If you had invested ZW$1000 in Unifreight (roughly 5300 shares) on 4 January 2021 that investment would be worth ZW$159000. Great story, investing can give you 160 times your money in around 9 months.

However, there’s a lot that’s missing in that story. How long would this hypothetical person have to have been investing beforehand? Did anyone see this coming? Would one have been able to get their hands on the Unifreight shares? I just want to focus on the first one. See when stories of triumphant investors are told it often sounds like they made one big swoop that paid off. Take it from me that’s hardly how it goes. Investing is a habit. For most people with regular incomes investing is taking 10% of your income every month or whatever your pay period is and putting it into something.  The story doesn’t capture this part.

Start where you are

My previous point will cascade into this one. If you have small amounts of money your goal should be to learn about investing and you do that through making investing a habit and learning to handle small amounts. There’s a belief that you will know what to do with the money once you have the money and for most that just isn’t true. I don’t know anyone for who it’s true. It is best to start learning with the small amounts, gathering the skills and most importantly making it a habit.

First, we do what we must so that we can do what we want

While you are learning the habit and the skills you may as well learn a vital lesson of investing. It is very rare in life for people to start anything where they want to be. Life instead often has us starting in positions we would rather not be in. In investing this may be evidenced through the investment options that are available to us as we start our journeys. You may have to invest in an unfancied asset class to start with. However, if you make investing a habit it will all make sense.

And embrace the process

Let’s say you wanted to invest in something that had a minimum entry requirement of ZW$10000 but you could only afford ZW$1000 at a time, say per month. Sure you could just say because you never have ZW$10000 you will just give up on the idea. Or you could find an alternative that accepts the ZW$1000 per month and accumulate it there until you reach critical mass.  This is how empires have been built. Sometimes it’s more than two steps. There can be as many as 10 or 15 steps on the investment ladder.

Understanding these things and applying them together will make the difference between being a prisoner of your financial circumstances or rising above them.