Whether you have a decently paid major job or not, you may seek extra money. In such situations, investment is the best solution. There is a strong myth that, to become an investor, one needs huge capital. Yet, there are many small investment opportunities for those who have a few hundred dollars only. More to the point, even such an affordable sum can provide you with financial independence in the future, if you manage to utilize it wisely.
1. Index ETFs. Such exchange-traded funds are connected with an index (not a particular company), which is why the risk of losing money is minimal. So, you have probably heard of the S&P 500.
2. Roth IRA. It is a retirement account for accumulating and multiplying post-tax funds. When you decide to withdraw money from it, you will not have to pay any taxes.
3. Robo Advisor. It is an algorithm for trading and investing in an automated mode. It performs all the calculations and market analysis instead of you.
4. Education. How to invest 500 dollars for the biggest benefit? Spend that money on self-improvement, for example, on some educational online course related to your first job or trading.
5. Get free of your debts. To be objective, in many cases, interest rates charged on credit debts are significantly higher than potential returns from investing. So, fix this problem first.
6. Individual stocks. It is much riskier than ETFs as your portfolio will not be diversified. Yet, you can count on hefty rewards at the end of each quarter.
7. Copy trading. This feature is available on eToro and Copy Trader. If you have $500 or so, you will be able to subscribe and copy two or three profound traders. You will not need to make any decisions on your own ― your account will mimic their trades automatically.
8. Crypto. Due to the high volatility of this market, the risk of a loss is weighty. However, potential returns are high as well.
9. Penny stocks. This term is used for shares worth $5 or less. So, if you opt for this method, you will easily find investments to fit your budget. But you must take into account that such stocks are often involved in pump and dump schemes, so you risk losing a significant part of your investment if you fail to sell the stocks at a critical moment.
10. Option trading. These are contracts that allow you to purchase or sell a particular asset at an agreed price on an agreed date. This right is provided for a small commission. But you are not obliged to perform a deal agreed. If the market conditions are unfavorable, you can just abandon it.
In sum, if you have such a wish, you can freely start investing from a few hundred dollars. This sum will be enough to try most investment methods and even obtain sizable rewards.
