What is the best way to invest a small sum for a reasonably good return...say $500 for example?

Question

I do not make a lot of money but have been able to save at least $500. I was considering maybe a money market, figured I should have more money before I thought about a CD, and did not know if anyone had some helpful advice about how to make the most of what I have...money market or otherwise.

Answer 1

For a beginning investor with about $500, I would like to suggest taking a look at American Funds. They have a $250 minimum. You could actually invest in two different of their funds. Do not do that however if you think you might want to spend the money in under 5 years. There would be too much risk that you might wind up with less than you started with. Over 5 years, these funds have a very very good track record. There is one slight drawback. They charge a 5.75% sales charge. But for a beginning investor with just a small amount to invest, they are very hard to beat. You can add to your investments in $25 increments also.

Here is the link to read about the funds.

http://www.americanfunds.com/default-home.htm

One of my favorites is this one.

http://www.americanfunds.com/funds/details.htm?r=h_c&fundNumber=6

Answer 2

$500 isn't like to grow much. In a CD or a high-interest money market, you're looking at maybe making $25-$30 in a year's time. That's not nothing, but I have a feeling you'd expect more for leaving the money sit for a year.

That said, if you don't need the money, you might as well put it in an investment. $500 is enough for CD, although it's really too little to put into a mutual fund or stocks (the fees would erase any gains).

If you have credit card debt or car loans or something, might as well put the money towards paying off your principal on those.

Answer 3

Depends on how long you tend to invest. Every month for say 5 to 10 years? That would be coins. For 500 a month, you cant buy much. Cars go down in value as time goes by, and you dont have enough for real estate. These are probably the top 3. There are others, like precious metals, stocks, bonds. But some yield low returns because of their safety. Some high returns because of their volatility. Coins can go up only if you know what to buy. I do suggest you get the coin book by this guy I know.

Answer 4

We specialize in penny stocks trading under $5/share for our members. They can be much more volatile, however for investors who have a cheap discount broker such as Scottrade, can make some great money in this market. It is important when daytrading to have a cheap online broker so that your commission costs are low and you can enter a trade and then exit and keep more of the profits for your wallet!

We had a pick this month for our members that went up 133% within a week. As well as a pick in Sept. that recently has hit another new high for a 393% gain.

Timing is very important and you should never just jump into a stock without taking some time to research the company ("due diligence".)

I recommend you look over http://www.investopedia.com/articles/basics/
... for some beginner advice and if your still interested check us out at http://www.bullishinsider.com

Paper trading is also a fun way to learn to trade. Pretend you bought the stock using the amount of money you would be considering using, and then track the stock from the moment you would enter the trade.

Feel free to e-mail me if you have any additional questions. Good luck. Happy trading!

Answer 5

When it comes to investing there is always some risk the more risk the higher the rewards. if you are looking for something safe then a Money market will give you slightly higher interest then a regular savings account with minimal risk. Take a look at some of the bigger investment firms like Vanguard or Fidelity.
I personally don't like Cd's.

Answer 6

Why don't you try online marketing? A $500 investment is more than enough for success in this business. For a start, there's a good ebook you can download for free at www.lulu.com called "making money with zero budget IS possible".

It's really concise, only 12 pages long, with some materials you can use right away. It shows some basic step-by-step lessons that really work.

I think it's a really good ebook to test your own capacity. If you can make money with zero budget, then certainly you can make much more with $500, right..

Answer 7

Of course $500 is not that much to expect a good return from.
What I suggest is that you think of a good e-commerce idea and then build it on the internet and start to tell people about or market it on the internet. There is a site called www.ProjectSpring.com where you can bid for your suggested project. People (mostly from india) will start to bid and offer the lowest price to build your site. But remember, you have to think of a good imprssive idea so people will enjoy it. Actually, I have like $1000 and i have an idea and I am bidding for the lowest price in that site. Once again, e-commerce is a good idea unless you have a creative e-commerce idea. And one more thing, you should like the IT world before you proceed with an e-commerce thing. Dont start thing you dont like to deal with.

Answer 8

Why are we recommending class A mutual funds???? the $500 he has to invest means $473.75 that is used fo rthe fund. (assuming its a standard 5.25% fee for purchasing a class A share).

For $500 you do have options two of my personal favorites (and i used to own before migrating into ETF's) are PAXWX Pax World Balance no load fund .96 fees and a yield of 1.48 CWGFX (American Funds capital world growth) is my lone Mutual Fund holdover . 2.02 yield .78 expense ratio global and has made a nice chunk of change for me.

Look at morningstar.com and see for yourself.

Answer 9

you can get 4.5-5.2% interest from a money market or CD

which isn't going to make you a ton of money on $500

if you don't mind risk, learning about stocks and putting it into one might be a good idea

Answer 10

Buy a bank CD until you can save more money.