The Easy Way To Invest If You Live Paycheck To Paycheck - InvestingChannel

The Easy Way To Invest If You Live Paycheck To Paycheck

Proprietary Data Insights

Top ETF Searches This Month

0 1 2
Rank Name Searches
#1 SPDR S&P 500 ETF 3,791
#2 Invesco QQQ 2,156
#3 Energy Select Sector SPDR Fund 530
#4 Direxion Daily Semiconductor Bull 3x Shares 453
#5 SPDR Dow Jones Industrial Average ETF 443


Who Is Living Paycheck To Paycheck?

The Juice likes to highlight LendingClub’s paycheck-to-paycheck report from time to time. Each month, the company surveys US consumers to see how they’re making ends meet and to gauge their overall financial condition. 

After we relay some of the key numbers, we’ll put the idea of living paycheck to paycheck in perspective and relate it to investing, particularly how you might consider investing if you don’t have much – or any – money left over at the end of the month. 

  • About 75% of people earning less than $50,000 a year reported living paycheck to paycheck in July. 
  • For those making $50,000 to $100,000, that number drops to 63%. 
  • Among consumers making $200,000 or more, approximately 30% say they lived paycheck to paycheck in July. 

In each case, the number of people living paycheck to paycheck dropped between June and July, but is still higher than it was a year ago. 

Across the board, 59% of Americans classify themselves as living paycheck to paycheck in July, down from 61% in June, but up from 54% at this time last year. 

Also interesting. The Federal Reserve uses $400 as the benchmark when it refers to an unexpected personal expense. However, according to LendingClub’s data, 46% of individuals say they got hit with an emergency expense that averaged around $1,400 in the last 90 days. And 42% of those who reported living paycheck to paycheck say they had to deal with emergency expenses that came in higher than $400 apiece. 

This leads to the million-dollar question. If you’re living paycheck to paycheck, how in the heck can you possibly invest your money? And exactly what does it mean to be living paycheck to paycheck? 

The Juice has answers. Scroll with us.

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The Easy Way To Invest If You Live Paycheck To Paycheck

Key Takeaways:

  • Most people can find space in their budget for investing. 
  • From there, your best bet might be going the ETF route. 
  • ETFs take the guesswork out of investing and help diversify your portfolio. 


Quite a few people who make decent or better, or even really good money report living paycheck to paycheck. 

This leads us to believe there isn’t only the classic case you might picture of a poor hourly worker barely getting by. No doubt these folks exist. Probably in that under $50,000 category. 

But what about the people making more than that, and up to or beyond $100,000 or even $200,000? 

The Juice thinks a good chunk of these people are dealing with the double whammy inflation and the record cost of housing. 

If you’re paying astronomical rent, it can’t be easy, particularly in a big, expensive city, even if you’re making good money. So you’re left with very little at the end of the month after paying your fixed obligations and trying to have a life. 

If you recently purchased a home, you could be one of the many who consider themselves house rich and cash poor. You paid a record price, took on a mortgage at a record high interest rate, and have a hefty monthly payment. Overall, you’re paying more for housing as a homeowner than you did in your previous situation. 

Or maybe you’ve owned your home for a minute. You have all this equity built up, but it does very little for you unless you take on debt via a home equity loan. 

Just two out of a world of personal financial possibilities. 

However you slice it, if things are tight for one reason or another, you might be like, damn dude, how can I possibly invest my money? 

Start Small. End Big. 

First things first. Free up some cash. 

Write down everything – yes, every thing – you spent money on last month. 

Chances are there’s something there you don’t need. Something you could do without. Probably $50 or $100 or more of something you could do without. 

If you’re lucky enough to not have a ton of high-interest consumer debt, you can invest your money. 

ETFs To The Rescue

While there’s absolutely nothing wrong with buying $50 worth of, say, (AMZN) stock every month or every two weeks, it can feel kind of lame to buy .39 shares of one stock with every buy. Plus, you might want to spread your limited money around to more than one stock at a time. 

This is one reason why ETFs – exchange-traded funds – are useful. 

In July, The Juice did an entire series on ETFs. You can start here to read each installment and get up to speed. 

Like mutual funds, ETFs own a portfolio of stocks that usually aim to track the performance of a broad market or specific sector index or achieve some sort of investing goal, such as growth, value, or income. 

The beauty of ETFs is that they instantly give you diversification. 

Of course, you can go broad and buy the #1 most searched for ETF in our proprietary Trackstar database of the tickers investors search for most – The SPDR S&P 500 ETF (SPY). This gives you exposure to the entire S&P 500. 

Great idea. 

But let’s say you want to invest in tech stocks. But you don’t want to stock pick one at a time in relatively small increments. 

You start sending any extra cash you can free up to the Technology Select Sector SPDR Fund (XLK). It tracks an index of tech stocks. A look at its top ten holdings illustrates the aforementioned point – you get nice exposure you can build up over time. 

Source: State Street

This fund’s 10-year performance comes in at about 19% annual returns. 

While there’s no guarantee it will, if the fund keeps us that pace, you’ll be sitting pretty in 20 years by starting with just $100 and investing an additional $100 per month. 

You can play with some numbers using this handy investment calculator. 

The Bottom Line: It’s pretty simple. The days are gone when commissions ate away at your investment dollar. Or when you had to meet account minimums of $500 or more than $1,000. You can – aside from the low expenses of solid ETFs – watch all of your investment grow over time. 

No matter how much you make, you can probably come up with a few dollars a month to throw at a basket of your favorite stocks. Smart small and you give yourself a fighting chance of building momentum and ending up big.



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