When an extra $500 comes your way, what do you do with it? Do you put it toward debt? Head out for a good old-fashioned shopping spree? Or does it disappear into the black hole of spending that plagues so many individuals and families?
I’d like to suggest that with the next extra $500 that comes your way, you try an experiment: invest the money and see how much you can make it grow. I can even share with you 5 ways to invest $500 that might appeal to your sense of adventure. Check out the 5 investing ideas below and see if you can, instead of spending that extra cash, turn that money into $1,000… or even more. Research the investing ideas below and see if one or more of them might be a good investment choice for your money.
5 ways to invest only $500
1. Invest in an ETF
An ETF, or Exchange Traded Fund, is, in essence, a combination of an index mutual fund and a stock fund. Whereas with mutual funds, you can only trade at the end of the day, ETF’s allow you to buy and sell whenever the market is open. This gives the investor more control over their ETF holdings. The simplicity and low costs of ETFs make them a highly popular investment choice, even for the most conservative investor. With over 700 ETFs on the market today, there’s sure to be one that will fit your investment style. Charles Schwab is one of the leaders in low cost ETF investing and are definitely worth checking out.
2. Flip furniture on Craigslist
There’s no shortage of furniture available for sale on sites such as Craigslist. And there’s no shortage of great deals to be found when someone prices furniture at a low price simply to get it off of their hands. Take advantage of these great deals by scooping up low-priced furniture gems and re-selling them for a profit. Antique furniture is especially valuable and many people who sell it in the first place simply see it as “grandma’s old couch.” They don’t realize the intrinsic value in the piece. The trick to making money in investing this way is to be able to see through the over-priced junk and find the gems that are ready to re-sell or have potential hidden in them via refurnishing.
3. Start a business
What’s your life’s passion? Is it animals? Start a pet-sitting or pet-washing business. Is it writing? Start a blog. Are you a talented crafter and good at marketing? Start making a highly coveted craft, such as wedding jewelry, and sell it on Etsy. There are a thousand and one business ideas out there: one of them is bound to fit your passion and your lifestyle. Find one that you can start for less than $500, educate yourself on how to run a successful business and see how quickly you can turn that $500 into a steady monthly income. It’s amazing to see a passion or interest turn into a money making venture.
Read more: 7 ways to creat a successful savings plan
4. Invest in dividend paying stocks
Investing in dividend paying stocks – whether by buying individual dividend paying stocks or by investing in an index or mutual fund that consists of dividend paying stocks – is a great way to provide a passive income source for yourself. Time-honored dividend-paying companies have done well at building wealth and providing an income for many passive income investors.
TIP: If you want to trade those stocks at zero commission, check out the Robin Hood app.
5. Invest in peer-to-peer lending
Another great way to invest $500 is to invest it in peer-to-peer lending. Companies such as Prosper and Lending Club lend money – money that they receive from investors – to clients. They do this at an interest rate which is based on their credit score as well as other factors. The clients then pay back that money with interest – interest that is then shared with investors. Many investors report annual returns on peer-to-peer lending investments of 6%-8% or even more.
There are many investment options for that extra $500 that occasionally comes along. They can allow you to double or triple your income, or turn it into a monthly income source for many years to come. Consider some of the investment options above to determine what the best route is for you, and grow that extra $500 instead of spending it!