Investing is important when you start thinking in terms of your financial health. It’s not enough anymore just to work. Your money has to grow and in order to grow your money, you need to invest your money. Even if you only have little funds to invest, it is still possible for you to start investing. Even $500 can go a long way. If you need to know how to invest $500 wisely, take a look at these tips. They could very well help you out.
6 Tips on How to Invest $500 Wisely
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Investing can seem hard to do when you don’t have much money to work with. However, you can still start investing if you have at least $500. Learn how to invest $500 with these 6 simple tips.
1. Try using Robo-advisors to Invest
When thinking of investing, try using Robo-advisors to get started. They offer loads of different benefits and you can invest the way you want. There are many different Robo-advisors to choose from depending on your needs such as:
These are just a few Robo-advisors, but there are many more that could be tailored for your needs. For instance, Wealthsimple offers personalized portfolios and auto-deposits. They also have financial advisors on standby just to help you. You can sign up with Wealthsimple today to get a special $50 bonus after funding your account with a minimum of $100.
2. Pay Off Debt
Maybe, you have some outstanding debt. Well, if you have $500, use it to pay off your debts. It can be a great way to “invest” your money. You can choose to pay off the debt with the highest interest, which could help you eliminate that expense. If you are more inclined to using the snowball method, that might be helpful for you. Or, you could spread your $500 throughout all your debts, paying each one in small increments.
If you think that paying off your debt might not be a beneficial move for you right now, myFICO offers a tool to help you. You can use it to see if paying your debt would be better or if you should use the money to invest in something to gain more money. Either way, paying off debt now or a little later would be a great utilization of $500.
3. Consider Your Retirement When Investing
When thinking of how to invest $500, your retirement should be one of the first ideas to come to mind. Investing $500 into your retirement is a safe way to ensure that you will have some funds during your retirement years. You can invest in your retirement by investing in your 401k at work or opening an account through Vanguard.
With Vanguard, you can get great investment advice and a super low-cost investment options.
There, you can invest your money in:
- mutual funds
They also offer the option to rollover your 401k.
Speak with your job about contributing to your 401k and see if they also do an employer match. If so, that can boost your retirement savings even more. The $500 that you invest now can go a long way into your future.
Related: How to Invest Outside of Your 401k
4. Peer to Peer Lending to Invest
Another decent way to invest $500 is by becoming a lender to help others who are in need. Peer to peer lending can help you do just that. There are many different p2p lending apps that can match lenders with borrowers. Those apps include:
- Lending Club
There are many more to choose from and they even offer benefits for both the investor and the borrower. By using p2p lending, you also get to see who you are lending your money to and for what reason. For those that are weary of the p2p lending investment, this can be very beneficial.
There can be a lot of risks associated with p2p lending. However, that is why you need to make sure you diversify your investments. Try spreading your investment through different borrowers, not just one.
5. Use Stock Trading Apps to Invest
Stock trading apps are another way to invest your $500 wisely. There are many stock trading apps to help you out, they include:
- Fidelity Investments
- TD Ameritrade
Stock trading can be super interesting and very worthwhile. You have the potential to make some good money, but make sure you know what you’re doing before you get started trading. There is a guide for online stock trading beginners that could really help before you get started. Some apps even offer advice for beginner stock trading.
6. Open a High-Interest Checking or Savings Account
You can also invest your $500 in a high-interest checking and/or savings account. This type of investment can be beneficial for a number of different reasons:
- Cashback rewards
- ATM fee reimbursement
- sign up bonus
These are just some of the perks with high-interest accounts. (Did you know you can get a 3% reward by investing in a high-interest checking account with LMCU?)
You can receive an even bigger reward if you choose to invest in both a high-interest checking and savings account. It can also be a win-win for both you and the bank/credit union essentially.
Choose Wisely When Investing
Investing may seem hard but it can be made easy. You can invest as you need and with however much you may have. Even if you only have $500 to start with, that is still something and can go a long way. After learning how to invest $500, get started on investing today if you haven’t already. (You won’t regret it!)
Have you started to invest your money wisely yet?
AUTHOR LaTia Longuemire
My name is LaTia Longuemire. I enjoy writing, singing, and cooking in my spare time. My passion is helping others. At this stage in my lifetime, I'm primarily focused on my children. They are everything that keeps my world spinning.