It is a popular belief that you need to be rich to start investing, but that is not entirely true. With as little as $500, you can get in on investment options that do not require a lot of money to get started.
Before you go ahead to invest with this kind of money, you need to ensure your financial health by having an emergency fund and also make sure that all high interest credit cards are paid off.
You will be setting up yourself up for failure if you start a business or invest your little money without first building a reliable emergency fund.
5 Investment Opportunities to Consider When You Have $500
When you decide to invest $500, you need to keep in mind your tolerance for risk. If it is a short term investment or you cannot risk losing your money, it would be a good idea to consider safer investments such as money markets, CDs and high yield savings.
However, if you would like to invest the money for the long term, you can take a little risk and invest in exchange traded funds, mutual funds and other such like investments.
The following are best 5 investment opportunities to start growing your money from as little as $500.
1. Exchange Traded Fund
In essence, an exchange traded fund is a combination of a stock fund and an index mutual fund. Unlike mutual funds that allow you to trade only at the end of the day, exchange traded funds allow you to trade any time the market is open.
Because of the low costs and simplicity of the ETFs, they are a very popular investment option even for the conservative investors. It may surprise you, but the ETFs are Warren Buffet’s favorite investment.
2. Mutual Fund
You can also invest your $500 in a mutual fund. Even though most mutual funds tend to have relatively high minimum investments, there are many of them that do not require a minimum investment in thousands of dollars.
An example of companies with low minimum mutual funds is TD Ameritrade. They have close to 300 mutual funds with a minimum investment of $100 and over 250 mutual funds that do not require a minimum investment at all.
3. Flip Furniture on Craigslist
If you check on Craigslist and other related sites, you will find that there is no shortage of furniture for sale. You can find great deals of furniture that people simply want to get off their hands.
With as little as $500, you can take advantage of the great deals on Craigslist by buying the furniture at a low price and reselling them for profit. Just make sure that you look for gems that are easy to resell and can look great when refurnished.
4. Individual Stocks
Individual stocks could be a really good option for you if you are wondering how to invest in stocks with as little as $500. You can purchase individual stocks through discount brokerage firms such as TD Ameritrade and E-Trade for a small fee of $5 per trade.
5. Dividend Re-Investment Plan
This is a small investment option that provides people with an opportunity to purchase stocks directly from companies without the need of using a broker. You can participate in these programs as long as you can afford to purchase at least one share.
There are many other small investment options out there that you can start with $500 or even less than that. For instance, you can start businesses like lawn maintenance, child care, car detailing or even offer dog walking services.
The most important thing is to start as soon as possible in order to increase your savings and the size of your portfolio over time.