I’ll be honest I don’t know much about investing, I have a 401k through my employer that I contribute to, but let’s just say for someone who doesn’t have a big lump sum of money to invest in buying multiple shares of stocks and could only afford say $200 a month what would be y’all’s advice in investing small amounts monthly
Unless you are fully funding your 401k, I would just add that $200 to your 401k every month. Reason being... That 401k money is not going to get taxed until you either need to take it out, want to take it out or are forced by the government to take it out as an RMD (required minimum distribution) whereas if you take that $200 a month and put it in the stock market, your gains will be taxed as capitol gains every year.
You can put up to $23,500 a year into your 401k, plus additional money as you get older and closer to retirement. The only reason that I'm playing in the stock market is I had no where else to put money other than a savings account, because my 401k has been maxed out for years and no that I'm retired, I can't contribute to it anymore anyway. I got tired of some of the money just sitting in a high interest savings account and wanted to play in the stock market with some of it. Capitol gains are not considered "Earned Income" so it doesn't effect your Social Security benefit every month.
