Long gone are the days where you need a minimum of $2,500 to start investing. In fact, you can now start with as little as your spare change. (Yes, seriously and there’s even an app for it.)
And if you’re worried about the complexity of investing, don’t be. You can do it inexpensively and easily. Here’s how to start investing with $500.
First Determine What You Want to Invest In
Different investments work for different people. Some are die-hard when it comes to the stock market while others prefer alternative investments like real estate or businesses.
You need to figure out what works for you. If real estate is your chosen route you’re not going to be able to do much with $500. In this instance keep saving and educate yourself while you save.
If you’re interested in investing in the stock market here’s how to do it.
Start with Your 401k
If you have an employer sponsored retirement plan it’s generally a good idea to start with it. This is especially true if your employer offers a match.
If you aren’t yet participating in your 401k program at work then go ahead and sign up.
Don’t have an employer sponsored retirement plan? No worries. There are plenty more options for you to choose from.
Invest in ETFs with Betterment
Betterment is where I keep my retirement account and my kids’ investment accounts mainly because it is SO simple to use!
With Betterment there’s only a $10 minimum to open an account. If you have an automatic withdrawal of $100 or more per month you’ll only pay an annual of fee of .35%. (If you have more than $10k that fee drops.)
That’s a pretty low fee considering Betterment helps you determine your risk, selects ETFs for you and rebalances your account on your behalf. It really is “set it and forget it” which I truly love.
Invest in Stocks with Loyal3
My first investments were in the form of individual stocks. Based on my experience I definitely don’t recommend brand new investors start with this route.
However, if you’re going to pick a few stocks to add to your portfolio I do recommend Loyal3. Loyal3 is a brokerage that is completely fee free. While most brokerages require to pay upwards of $10 to buy stock and then another $10 to sell, Loyal3 makes you pay nothing.
Plus this company lets you purchase partial stocks – this mean you can get started with only $10.
Invest in Yourself
Is there a course you could take to improve you earning power? A side business you’ve dying to start up? Time and time again I stand by the fact that the best investments I’ve ever made are the ones in myself.
If there’s something you know you could do to invest in yourself please don’t overlook it.
Once you’ve decided what to do with your $500 make a follow up plan. Being consistent, even if that means repeated small amounts like $20 at a time, will add up and create huge results.
Go ahead and invest your $500 but also be consistent with doing more and more in the future.
Have you started investing yet?