Last Updated on Apr 28, 2021 by James W
So let’s say that you have $500 and are considering ways to make it grow for the future, rather than spending it immediately. It’s an intelligent move, especially in these uncertain times. The good news is that you’ll have plenty of options. Whether you want to save for a deposit on your first home, or looking for ways to make your retirement more comfortable, simply review some of the investments available and choose the one which best addresses your financial goals
1. Add to your employer-sponsored retirement plan.
If your employer sponsors a retirement plan, talk to them about adding your $500 to your fund. This is especially advantageous if they match employee contributions up to a percentage of your salary.
2. Open an IRA (Individual Retirement Account)
If you want to boost your retirement savings, then an IRA is the best place to put your money as you get tax breaks for contributing. IRAs are specifically designated for retirement, which means you get tax perks for contributing. A standard IRA offers an immediate tax deduction, but you’ll pay taxes when you retire. Or, with a Roth IRA, there’s no immediate tax advantage, but the money will be tax-free when you retire.
3. Buy a Certificate of Deposit
Certificates of deposit, aka CDs, are one of the safest ways to invest $500. They offer a guaranteed interest rate, regardless of what’s happening in the economy. They’re a great option if you want to create an emergency fund or a nest egg for the short to medium term.
4. Invest in the stock market
The good news is that there are plenty of platforms that allow you to start buying and selling stocks, for a very low initial investment. Do some research on google to identify the best investment apps for beginners.
5. Invest with a Robo-advisor
Robo-advisors are automated investment management services that use AI and algorithms to maximize your investments based on your information and the level of your investment. Large banks and finance houses increasingly offer the option to invest via Robo-advisors. If you’re not interested in taking an active role and just want your money to grow, they can be a great option.
6. Start a side business
If you’re looking to grow your $500 quickly, then consider starting a side business in addition to your full-time job. Spend the money on the products you want to sell, and use a portion to set up a good website. If you don’t want to set up an online shop, then there are plenty of platforms you can use to flip items for profit such as eBay, Facebook Marketplace. Pick up bargain furniture and clothes at thrift stores, and consignment shops to sell at a profit, then reinvest the cash you’ve made.
7. Pay your debts
It may not sound as cool as making profits by stock market trading, but one of the most financially intelligent moves you can make is to reduce your high-interest debts – whether they’re credit cards, student loans, car finance, etc. You can save yourself a huge amount in interest payments over time, freeing up additional funds to invest elsewhere.