If you are looking for safe ways to invest $500, you should be looking at low-risk opportunities. However, you should also know that there are guarantees in investment, whether low or high risk. Trading stocks are naturally risky because they fluctuate in value.
But in exchange for the risk involved in trading stocks, investors are rewarded with potentially higher returns than they’d get from less risky investments.
So, if you can’t risk any fluctuation and seeking a safer investment path, you should choose to put your money in a savings account or any other savings product.
Those kinds of investments usually have little or no risk. However, you can’t expect the kind of returns you could get from investing in ETFs (stocks, bonds, and real estate).
With that being said, here are five ways to invest $500 to start saving.
Invest in a New Blog
Starting your blog can be exciting and daunting at the same time, sometimes even boring. Because you are new to blogging, you may find it overwhelming because it has many different elements involved. But, there’s money to be made in blogging. If you can offer something unique that makes you stand out from the crowd, then you should blog.
Investing money into a blog is one way to help boost your chances of succeeding. If you have that extra $500 to spare, it makes things a lot easier starting a new blog compared to starting from scratch. The returns in blogging may not be instant, but it a safe investment option because you get to enjoy the benefits in the long run and begin to save.
Invest in a High Yield Savings Account
Saving your money in a high yield savings account is also a form of investment, and you’ll hardly find a safer way to invest. A high-yield savings account typically pays 20 to 25 times the traditional savings account. You can have a high yield savings account in the same bank where you have your checking account to make transfers between the two accounts easy.
Comparing the difference between a high-yield savings account rates and the national average, the increase in your ROI is quite significant. If you’re holding $500 in savings, and the national average is 0.10 percent APY, over one year, you get $0.5 ROI. But if you deposit the same amount in a high yield savings account earning 2 percent, you get $10 ROI.
Flip furniture on Craigslist
Furniture abounds on sites like Craigslist. There’s also no shortage of terrific deals when people are pricing great furniture at low prices simply to get it out of their homes. Maybe, they found another great piece or want something different. You can take advantage of these fantastic deals by purchasing the low-priced furniture and reselling them at a higher price for profit.
Many antique furniture is plentiful on Craigslist, and most people who sell them simply see them as archaic without knowing its actual value. The trick to investing safely in Craigslist is to see through all the over-priced items and find the gems that are ready to re-sell or have hidden value in them when you refurbish.
Invest in peer-to-peer lending
Another excellent opportunity to invest in $500 is via peer-to-peer lending. Peer-to-peer lending platforms operate by giving loans and returning the proceeds of the loans to the investors. Instead of investing your money through a bank, in the form of money market funds and certificates of deposit, you can invest your money directly in the loans taken by borrowers on peer-to-peer lending platforms like LendingClub and Prosper.
These platforms do this business at an interest rate that is based on their credit score as well as other factors. When a borrower pays back the money with interest, the money plus interest is returned to the investor. Many investors have reported an annual ROI of 6 to 8 percent and above. Although this can be a risky venture, the profit is quite substantial. And again, every investment has its risk — some more than others.
Start a business
What’s your passion in life? If you love animals, you can start a pet-sitting or pet-washing business. If you love making crafts, you can begin making highly coveted crafts like wedding or engagement jewelry to sell on online marketplaces like eBay, Amazon, or Etsy. There are thousands of businesses available today, and one of them should pique your interest.
Choose one that you can start with only $500 or less, learn the ropes about the business and see how that $500 will turn into a steady income-generating business. Turn your passion into a money-making venture.
In doing a little research, you’ll discover more investment options for your extra $500. You’ll be surprised to see how you can double or triple your income, or turn it into a monthly money source for many years. Learn more about the investment options mentioned above to decide which one is best suited for you to grow that extra bucks.