The idea of investing scares a lot of people away. It seems like you need to have a significant amount of wealth to invest before you can start putting money away for the future.
That’s a harmful myth, though. You can invest a few dollars if that’s all you have. Sure, it’s better to have more money to start with, but long-term investments don’t require huge down payments.
We’re going to look at some options you have to invest $500 today. Hopefully, the ideas below give you some ideas on how to start contributing to your future.
Let’s get started.
How to Invest $500 The Right Way
So, you’ve got a little sum of cash. You’re looking to invest in it.
The first question to ask yourself is what your goals are. Are you looking to make returns in the next few years? How about the next 40 years?
If you’re looking for a quick return, you have to increase the risk of your investment. You could turn $500 into $50,000 in a matter of days if you landed on the right stock. That’s very unlikely, though.
Investing in medium-risk stocks might be the way to go if you’re looking for returns in 5 to 10 years. There’s a decent chance that your money will grow a good deal over that amount of time.
If you’re investing for retirement, though, Low risk, healthy stocks are the way to go. These are called “blue chip” stocks.
If you invested $500 into a stock with a 6 percent annual return, it would be worth over $5,000 in 40 years. That doesn’t sound like a lot for that amount of time, sure, but the important thing is to make contributions.
Say that each year, you managed to save another $500 and put it into the investment at year’s-end. That 40-year investment grows to $82,500. Find a way to contribute $100 per month, and that value grows to $195,900.
Compound interest is a long game. It’s something that you put away, forget about, then come back to after a few decades. At that time, though, your ROI will have grown by tens of thousands, if not hundreds of thousands of dollars.
Other Forms of Investment
Another thing you can do is invest in precious metals or goods. For example, if you buy platinum, you’ve got an investment with a lot of security. Not only do precious metals appreciate, but they’re something you can hold in your hand.
If there’s a massive economic recession, there’s no chance that you’ll lose the physical investment. Over centuries, precious metals are the things that hold their values most consistently.
People who want to know their money is safe often invest in gold so there’s no chance that a recession could wipe them out.
Are You New To Investing?
There are a few things you need to know if you want to invest $500. We’re here to help you move forward and find the best plan for yourself.
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