Financial security is often associated with saving money in interest-bearing accounts. While that’s true, there’s another approach that you can use in tandem with saving: purchasing investments that will yield returns and increase your wealth.

Some think they must start out with a tidy sum to begin investing. However, that’s not necessarily true. Even if your income is modest, it’s possible to build a portfolio incrementally and enjoy the financial freedom you crave.

Here are some tips that will help you get started.

1. Set Investment Goals

Improving financial security is a key element that fuels the desire to invest for many. While keeping this generalized goal, consider how your plan could have more focus if you add a few specific goals to the mix.

Perhaps one of those goals is to generate returns that will eventually allow your child to attend college without going into debt. You may like the idea of investing to ensure you have money to travel during your retirement years. The plan could even have to do with leaving behind a legacy for your grandchildren.

You’ll be surprised at how looking at specific goals like these will keep you motivated on days when your investments might be in a temporary slump.

2. Determine Income and Fixed Expenses

Today is the time to begin preparing for investing. Since you don’t have unlimited sources of income, it’s necessary to work with what is coming in. That will likely mean taking a close look at where your money goes now.

Some expenses are fixed and must form the basis of the household budget. These include items such as food, clothing, shelter, and transportation. If your current setup covers those adequately, then leave them as is.

You will want to look at any expenses not considered basic living needs and decide what to do with them.

3. Evaluate Discretionary Expenditures

Not all expenses outside the scope of basic living needs have to go. There are likely some of those expenditures that serve a definite purpose. You may want to keep them in the budget, although you may consider reducing the amount of income you allocate to them.

When you take the time to genuinely evaluate your expenditures, you may find some may no longer serve a purpose. These are the types of expenses to cut from the budget. At the least, you can find a way to minimize them and free some of your income.

How could you lessen those non-essential expenditures? Substitute options that are less costly. Brew coffee at home instead of running by the shop each morning. Brown bag it to work instead of eating out at lunchtime. Consider streaming services instead of traditionally more expensive cable options for watching television.

If you think about it, there are many ways to enjoy the things you like while spending less money.

4. Restructure Your Budget and Include a Line Item For Investing

Now that you have freed some of your available net income, it’s time to work it back into the budget. Just as you already have a line item for depositing a certain amount in your savings each month, you also want to create a line item specifically for investments. What you are doing is making an investment fund of your own.

The money you put into that investment fund over the next six months to a year will be the seed money for your investment portfolio. Depending on how much you can afford to set aside, it may be possible to participate in many kinds of investments.

In the meantime, you can learn more about different investments and how they work.

5. Research the Type of Investments That Interest You the Most

There are more types of investments out there than most people realize. It’s up to you to decide which ones interest you the most. During this research period, don’t reject any investment out of hand. Take time to learn about it, the risk involved, and how the returns compare to that risk.

Explore them all. Start with stocks and bonds, move on to real estate deals, and consider currency trading and various mutual funds. Keep in mind that bonds may have to do with municipalities and corporations.

Don’t overlook the idea of pooling some resources with a group to fund the launch of a new business and earn a fixed return on the investment.

6. Consider Offshore Investments

At first, you may find it easy to concentrate on investment opportunities close to home. While that does deserve some of your attention, there’s no reason you can’t consider looking at offshore investments. In fact, you may find that some of them have a combination of volatility and returns that plays nicely into your investment goals.

If you like the idea of making offshore investments, ensure that you’re clear on the laws that apply in the nation where those opportunities are based. You also want to look into establishing offshore bank accounts that you can use to fund that offshore investment activity. This will position you to take advantage of the exchange rates of various currencies and get more for your money.

7. Understand that Diversification is a Good Thing

Even in the early stages, it’s a good idea to diversify your investments. That means you won’t start with only stocks associated with a particular industry. Instead, you’ll want a few shares of a company associated with two or three industries. You may want to add in a bond issue or two. Maybe the idea of a futures deal might work well in your portfolio.

Why would you do this? There are two primary reasons. First, it’s wise not to place all your eggs in one basket. Second, you’re protecting yourself financially. With diversification, there’s a good chance that some of your investments will be gaining even when others might be flat or losing value. When that happens, what you gain on one front helps offset any losses elsewhere.

8. Launch a Portfolio With a Foundation of Low-Volatility Investments

The day will come when you’re ready to take on investments that carry greater risk. Initially, begin with investments with solid performance records and are considered relatively safe. This will help you see modest gains and increase the financial foundation of your portfolio.

As those safe investments provide modest returns, use the time to learn more about how to introduce those riskier investments into the mix. You will also want to understand how investors decide to hold or sell more volatile assets.

Don’t be afraid of trying some mock investments based on what’s currently trading. This will help you apply that newfound knowledge without losing anything. Once efforts with the mock investments begin to be more successful, you can take that knowledge and try your hand with a real one.

9. Maintain a Balance Between Your Cash Assets and Your Investments

Another tip that will keep you financially safer and prevent frustration is never invest more than you can afford to lose. In other words, make sure that the cash assets you have in savings and other accounts are always enough to cover any losses that your portfolio experiences. While you may never need to dip into those additional resources, knowing they are on hand will ease the pressure.

People who forget this one simple tip run the risk of losing an asset they need, like the home they live in. You never want your investment activity to undermine the ability to maintain a reasonable quality of life. As long as you keep a healthy equilibrium between your cash and your investments, it’s possible to survive just about any type of market movement.

Look to Professionals for Offshore Investment and Financial Guidance

Remember that you do not have to go it alone. You want access to advice designed to help you make smart investment choices. This is true with offshore as well as domestic investments. You’ll find that reputable offshore financial institutions have personnel who can help structure a plan based on what you want to accomplish.

Author bio:

Luigi Wewege is President of award-winning Caye International Bank, headquartered in Belize, Central America. He is the author of The Digital Banking Revolution, now in its third edition, and has co-authored economic research presented before the United States Congress. He also serves as an Instructor at the FinTech School in California and as an Advisory Board Member of Fort Kobbe International Vaults in Panama. He holds an Italian MBA from the MIB Trieste School of Management with a major in International Business and a BSBA with a triple major in Finance, International Business, and Management from the University of Missouri-St. Louis.