Don’t Invest Money When You Are Broke: Here’s What To Do

Contrary to popular opinion, investing isn’t for everyone. Despite the fact that there are numerous investment and money-making opportunities around, it is not for everybody to profit from them.

This idea might be different from whatever school of thoughts you may subscribe to, but there are some facts in it.

I have found that I’ve been able to make more money when I invest in times of abundance than when I invest in times of lack. Not only is it more exciting, there is also a feeling of freedom that gives me the confidence that I could make mistakes and not beg to feed in the coming days.

I’m not trying to say that you must be absolutely rich before you can start investing, but there is a level of comfort you have to achieve to be able to invest the proper way. That is why even the Securities Exchange Commission (SEC) of the United States restricts certain investment opportunities to only accredited or sophisticated investors who have attained a prescribed level of wealth. 

Here’s why you shouldn’t invest when you are broke

Wrong Emotional State

Investing while you are broke is definitely uncomfortable. You’ll know this if you have ever invested your last coin. It is painful, confusing, and just puts you in an awry emotional state. I hate to feel this way and that is why I don’t invest when I’m broke.

If you are investing in something you have control over, then you might feel a little bit better because the risk factor is you. But when making external investments that are risky and that you have no control over, it just feels so wrong.

You can’t be investing money and be worrying how you would settle your bills or how you would feed in the coming days or months. That is definitely the wrong move.

Limited Opportunities

Investing while you are broke limits you. It puts you in the corner and feeds you what you don’t want to eat.

There are investments that you can make with just 1,000 Naira and there are investments that you can’t make unless you have 100k Naira. Now, guess which one offers the best ROI? You would have guessed right 80% of the time if you chose the 100k investment.

While you can start small in your investment journey, investing while broke is another ball game entirely. Imagine squeezing out 500 Naira for an investment. What can you invest with that amount? That’s call card money and it wouldn’t go far in making a reasonable investment no matter how much you try.

Inability To Scale

My biggest fear for investing while I’m broke is the thought that I wouldn’t be able to scale the investment if the right opportunity comes. It would break my heart to be on the sidelines while opportunities pass me by.

Imagine squeezing out 5,000 Naira to make an investment, and then after about 3 months, there is a rare opportunity to scale that investment up to a value of 1 million by just injecting more capital of about 200,000 Naira.

What happens if you cannot make that important next step? You are left behind in the bargain basement where only small time investors play. For me, that is so heartbreaking.

Lack Of Financial Education

There is not much to learn if you only play small in the investment game. By investing while you are broke, you would be confined to smaller opportunities that provide little or no financial education, and that can ruin your investment knowledge going forward.

Now, compare an investor who only invests 10,000 Naira or less with an investor that invests as high as 1 million Naira. Both playing grounds are worlds apart, and the weight of financial education is significantly different in both classes.

In the lower class, you get to network with only fearful and broke investors, while in the higher class, you get to network and learn from big time investors with years of experience. Now, choose your class. 

Lack Of Confidence

To be honest, being broke doesn’t inspire confidence in anyone. It is depressing and confusing at best. This is why the most fearful investors are the broke investors. They are probably investing their meal ticket and wouldn’t want to lose it.

That is why I believe that the best investors are those that have achieved a certain level of comfort. They are not scared to make mistakes or lose on their investment because they are investing what they can afford to lose.

The more comfortable you are, the more confident you can be to make investments of different types and scale. That daring attitude is what rewards the most successful investors in the world today.

What You Should Do Instead

So, what should you do instead of investing when you are broke? Should you just throw the money into a savings account? Should you just buy the latest fashion? Well, there are several productive things you could do instead.

Invest In One Or More Skills

Instead of throwing your money about and hoping it increases in value, why not invest in one or more high-income skills? With that, you could increase your income and have extra money to invest with.

There are many free and cheap resources like YouTube and Coursera, where you can learn several high-income skills that will start bringing you money. With that, you can start investing at a very reasonable level.

Invest In Relationships

Investing in relationships is very underrated in these climes. I believe that high-quality industry relationships are the antidote to being broke. If you can find a particular area of interest where you believe you can thrive, you can start building relationships in that niche.

Simply go to twitter and find experts in that area. Follow them, subscribe to their email list, buy their courses if you can, contribute to social discussions in that niche and network with like minds.

With time, you would build a network of people who would support you in growing your income enough to start investing at a reasonable level.

Increase Your Income Streams

If you already have the necessary skills to make money, then you have to start amping up your effort. You can’t have options and be broke, so go out there and increase your income streams. Open up different channels for making money and create access for customers to reach you.

Earned income is the foundation for investing. Without having any earned income, it is difficult to invest properly. So, you have to first get up from the “broke” level. Get a job, sell your skill, help other people sell their stuff, etc; then you can start investing. Here’s how you can quickly make money without capital and increase your income streams.

Grow Your Business

If you already have a business, but you are struggling to make money and you are broke, then your first priority should be to grow that business. Forget about investing for now and don’t get too distracted. Make that business work and it would provide the capital to make whatever investment you want to make.

I’ve seen so-called business people neglect their business just because they are distracted by some get-rich-quick type of investment. If only they knew that their business, if properly taken care of, can give them more cash flow than they are looking for elsewhere. It’s just a matter of their business mentality. 


Investing is good, but it is wrong to make investment when you are not able to be in the right state of mind. While you can invest whenever you want to, make sure it is not at the detriment of your day-to-day financial obligations. 

You can’t be investing when you are being pursued and harassed by the loan house. You can’t be investing when you are struggling to pay your rent or home bills. What is worth doing is worth doing properly. So, first exit your state of lack, then you can start thinking of what to invest in.




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