I often hear people asking me how to invest on a small budget. Nowadays, there are several interesting and fast possibilities. By simply needing an Internet connection 😉
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⚠️ The returns shown in this article, as well as the investments mentioned, do not constitute investment advice. Past financial performance does not guarantee future returns. Investing involves a risk of losing money!
Why invest?
First, why invest? Even if you have a small budget to invest?
👉 In reality, without investment, a person loses money due to inflation.1 !
Indeed, almost every year, expenses increase with the increase in the cost of living. A good solution is to invest so that the portfolio's return exceeds inflation.
As a result, there are several types of simple financial investments to make your money grow in the long term!
Types of financial investments?
👉 There are several types of investments possible to earn money, for example:
- Stock market investments (growth)
- Stock market investments (large dividends)
- Raw materials
- Real estate investments
- Savings account
- Bitcoin
- Crowdfunding
⚠️ Please note that no investment guarantees a profit in advance! Therefore, all the risks and benefits must be studied before initiating an investment.
Criteria for a financial investment?
Note that in this article, I will only write about simple financial investments to invest in. With 4 criteria:
- Having a historically high yield (last 10 years)
- Investment diversification (in my opinion)
- Investment time less than 5 minutes per month
- Possibility to invest less than 200 CHF (or euros or dollars) per month.
Therefore, we are going to analyze 5 financial investments. In order to invest with a small or large budget 😉
- Growth ETFs
- High Dividend ETFs
- Account 3a (with diversified financial investments)
- SCPI
- ETF REIT
Stock market investment
In my opinion, the first investment I think for those who want to invest with a small budget. It is the stock market.
In fact, nowadays, any adult and responsible person can open a stock market account in order to trade.
👉 In this article, in order to promote a diversified stock portfolio, I wrote about ETFs. Note that an ETF is a set of stocks according to a stock market strategy.
Indeed, for those who are new to the stock market, there are many ETFs depending on the shareholder's stock market strategy.
Example of an ETF
For example, a Cac40 ETF tracks the Cac40 stock index. In reality, the ETF invests in the top 40 French stocks.
In reality, the 40 French stocks are updated automatically. As a result, for the shareholder, an ETF requires very little management time.
Stock market commissions
Before analyzing the profits in the stock market. It is important to understand that the performance depends on several aspects:
- Investment time
- The investment period
- The commissions
- inflation
The first aspect that I strongly advise to pay attention to when investing in the stock market. These are the commissions 🔍
Indeed, your trading account has several commissions to take into consideration. Because these commissions make you lose money. For example:
- Account maintenance fees
- Commissions regarding the purchase or sale of shares
Additionally, you should not forget the commissions of your ETF:
- TER (investment fund management fees)
Note that these stock market commissions will greatly influence your stock market returns in the long term. Therefore, you should reduce them as much as possible!
Stock market investments (growth)
👉 In order to grow capital. By analyzing past performance. A historically very interesting return. It is the stock market with ETFs that promote capital growth!
Indeed, with a diversified stock portfolio according to the investment fund's strategy. In reality, the shareholder can invest in a set of stocks (i.e. an ETF) that are historically very profitable!
Stock market returns (growth)
Here for example, are 3 stock market returns concerning 3 stock market strategies known for capital growth. Between January 2015 to January 2025.
| Strategy | Average annual return over 10 years (with dividends) |
|---|---|
| ETF VOO (Top 500 US Stocks) | 13% |
| ETF VT (+/- 9,000 global stocks) | 9.33% |
| Nasdaq (Best US Tech Stocks) | 17% |
In conclusion, we find that the stock market performance depends on the geographical area as well as the stock market strategy. In addition, the stock market performance can have large price fluctuations. Therefore, it is impossible to anticipate the profit.
➡️ On the other hand, we note that the yields of these examples are very good. Indeed, higher than 13% annualized in some cases 😉
Stock market investment (large dividends)
Another well-known stock market strategy to make money is an ETF that favors high dividend stocks.
Broadly speaking, a dividend is a percentage that the stock distributes to the shareholder's bank account.
Note that a high dividend stock. In my opinion, it is:
- Between 3 to 6% dividend distribution
Dividend Stock VS Growth Stock
To understand the difference between a dividend stock and a growth stock. For example, let's imagine that a $100 stock pays $4% in dividends per year. In reality, at the end of the year. The shareholder will have:
- $96 in stock value
- $4 dividends distributed to shareholder's bank account
On the other hand, if it was a stock without dividend distribution. In this case, the shareholder would not have received any cash in his bank account. On the other hand, the stock would continue at $100.
For example:
| ETF Type | Stock value (at the end of the year) | Dividend distributed in the broker |
|---|---|---|
| ETF without dividend | 100 dollars | 0 dollars |
| ETF with 4% dividends | 96 dollars | 4 dollars |
In conclusion, a dividend stock distributes a portion of the dividend into the shareholder's stock account.
Stock market returns (large dividends)
➡️ The performance of a large dividend ETF depends on the set of stocks the ETF contains.
For example, I considered the performance of 4 large dividend ETFs that I like the most at the moment:
| AND F | Average annual return over 10 years (Jan 2015 to Han 2025) | Dividend distributed on average |
|---|---|---|
| HDV (Best US High Dividend Stocks) | 7.5% | 3.5% |
| VYM (Best US High Dividend Stocks) | 9.5% | 3% |
| VYMI (Best Global High Dividend Stocks excluding US Stocks) | 5.5% | 4% |
| VYHL (Best High Dividend Stocks in the World) | 6% | 4% |
In this case, we conclude that the performance of a high dividend ETF will be influenced by the investments of the investment fund! Because it takes careful selection in order to choose good dividend stocks!
In conclusion, if we want to analyze the past performance of the ETFs that I studied (2014-2024). In broad terms, it is:
- 7% annualized -> capital growth
- 3% annualized -> dividend
Stock market taxation
When it comes to taxes, each country imposes taxes based on stock market gains.
In Switzerland for example, to summarize in broad terms.
- Dividends -> between 15 to 35% depending on the country of the action
- Stock market fortune -> about 1.5%
➡️ In this case, we conclude that in Switzerland, promoting stock market growth is less taxable than receiving dividends. 🔍
Investment in a 3a account
Another easy option to invest your money with a small monthly budget is a 3a account.
In fact, in Switzerland, there are several ways to invest in a 3a account.
In short, a 3a account is a savings account with withdrawals under certain conditions. For example, reaching an advanced age or buying a primary residence.
The big advantage of a 3a account is that deposits into the 3a account make savings grow and offer tax reductions. 😉
Depending on the annual amount paid, it is possible to save more than CHF 1,500 in taxes per year!
Investment in a 3a account
According to account 3a, it is possible to make some financial investments in order to earn money in the long term.
Depending on the level of risk desired by the investor. It is possible to invest in some financial securities. For example:
- Only in cash with bank interest rates
- Investing in the stock market
- Investing in real estate
To give some examples, I have taken into consideration 3 investments from the 3a Viac account. Concerning an average of the last 10 years.
| Viac Strategy | Strategy Summary | Average annual return over 10 years (January 2015 to January 2025) |
|---|---|---|
| Global 100 | Invest in stocks worldwide. Mainly in the USA and Switzerland. | 6.9% |
| Global 40 | Keep 47% in cash + various investments such as real estate, stock market, bonds or raw materials. Worldwide. | 3.8% |
| LP | Cash only | Less than 1% |
Here is an example of how much an investor earns in his 3a account. With a passive 100% strategy. By adding 200 CHF per month in his 3a account. Based on past performance.
| Payment / Benefits | |
|---|---|
| Payment from the customer's pocket | 24,000 CHF |
| Stock market profits Account 3a (global 100) (6.9% annualized) | 10'427 CHF |
| Tax reductions (estimate) | 5,000 CHF |
| Total won in 10 years | 39'427 CHF |
➡️ In this case, which is an estimate based on past performance. It is possible to earn almost 15,000 CHF in 10 years.
By making a single monthly bank payment of CHF 200 per month into your 3a account.
Real estate investment
Another way to invest your money on a small budget is with real estate.
There are several ways to invest in real estate. Also known as investing in stone.
For example:
- Direct rental real estate
- Purchase of main residence
- SCPI
- REIT Actions
In this article, which focuses on how to invest on a small budget. I will focus on 2 real estate investments. SCPIs and Reit shares.
SCPI real estate investment
A SCPI is a civil real estate investment company.
Broadly speaking, the investor places his money in a SCPI, which uses it to invest in real estate and grow the client's money.
Yield SCPI
Returns vary depending on the SCPI de rendement investments. Most clients receive approximately:
- 5 to 8% gross of the investment, depending on the SCPI chosen.
Then, you have to subtract the commissions from the profits. For example:
- SCPI entry fees (in reality, these are exit fees)
- SCPI management fees
- Taxes
🔍 Note that taxation will depend on the SCPI as well as the countries of investment. Sometimes, Taxation can reach 47% compared to profits 😬
Therefore, before choosing a SCPI, it is absolutely necessary to analyze the commissions before purchasing. Because the commissions can be very substantial!
| YIELD SCPI | |
|---|---|
| Growth | According to SCPI |
| Dividend distribution (rental income) | 5 – 8% |
| Taxation (estimate) | Between 13 to 47% of the dividend |
Real Estate Investment REIT
A REIT stock is a real estate stock.
In broad terms, the shareholder invests in REIT shares. The REIT share invests the shareholder's money in real estate. And the shareholder receives real estate returns (primarily rents collected), in proportion to the money invested.
In order to simplify a REIT investment, it is possible to buy a REIT ETF. This allows you to have a diversified portfolio of shares in the passive real estate sector 😉
REIT Yield
Regarding the performance of a REIT ETF, I wrote an article. In broad outline.
- ETF REIT Stock Market Growth -> Very Low
- ETF REIT Dividend Distribution -> Good (around 3.5% depending on the ETF)
👉 Regarding taxation, in Switzerland. Investing in REIT shares is not optimal 😬
🔍 In reality, Swiss taxation is more advantageous with stock market growth compared to dividends. And REIT ETFs favor dividends.
| ETF REIT | |
|---|---|
| Growth | Very weak |
| Dividend distribution (rental income) | 3 – 3.5% |
| Taxation (estimate) | Between 15 to 35% of the dividend |
Conclusion
There are several easy options to invest your money with a small monthly budget!
Here is a summary of the estimated long-term returns for each type of investment. Based on the profitability of the last 10 years (2014-2024).
Note that I do not count inflation in the net return!
| Financial investment | Estimated annual gross yield (with dividend) | Estimate Taxes (In Swiss) | Commissions | Estimated net return |
|---|---|---|---|---|
| ETF SP500 (US stocks) | +12% | -1.5% | -0.5% | +10,5% |
| ETF Global (global stocks) | +8% | -1.5% | +0.5% | +6% |
| 3a global 100 (global stocks + tax deductions) | +7% | +2% | -0.5% | +8,5% |
| ETF High Dividend Stocks (all areas) | +10% | -2% | -0.5% | +8,5% |
| SCPI yield | +6,5% | -2% | -1% | +3.5% |
| ETF REIT (real estate shares) | +3.5% | -1,5% | -0.5% | +2% |
Note that this table is a generality and a simple estimate. Any yield will depend on several criteria!
Top 3 Investments for a Small Investor
Based on my estimates and opinion (not investment advice).
👉 Here are the top 3 for an investor with a small monthly budget:
- Account 3a global 100
- ETF SP500
- US Large Dividend ETFs
Investing in fractions (for mini budgets)
If you have little money to invest each month, it's not a problem 😉
👉 In fact, some trading accounts allow you to buy fractions of financial investments.
For example, if your stock price is $200 and you only have $50 to invest. You can buy the 25% of your stock!
As a result, you can benefit from the profitability of your investment. In proportion to the percentage you invest.
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About me
I decided to create this blog to develop and help readers who are looking for a simpler and more economical life.
Compared to before, I was a person who consumed a lot until the day I realized that my consumption made me sadder and poorer 😑
Now I prefer the minimum of my needs to be happy and achieve my financial freedom.
Without realizingI started to focus on saving and investing to depend on a boss for as little time as possible and to speed up my personal projects.
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I am as minimalist as I am frugalist. However, there are situations where I lean more towards an art of life.
How to invest on a small budget?
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