Got a spare $500 dollars coming your way and not sure what to do with it? A great idea is to put that money to work for you so it can make you even more money over time. Yes, $500 is not a ton of money, but it's certainly enough to get you started. You don't need to be a millionaire to get your foot in the door when it comes to investing. So let's do this.
Do some peer to peer lending
Peer to peer lending is a great way to get started with investing. You can start by joining an online P2P lending service like LendingClub.com that will match you as a lender with potential borrowers. In return, you make money through the interest the borrower will pay you for the giving them the loan. The interest you can earn as a P2P lender is typically higher than what you'd get in a traditional savings account, even after the lending company has taken out their fee for making the match.
Contribute to an IRA or 401k
Even if you already contribute to your employer sponsored retirement plan through a 401k or 403b, it's a good idea to save even more money for retirement by setting up and contributing to a traditional IRA or a Roth IRA. Not only can you take advantage of tax break while your money grows, you'll be setting your future self up for financial success.
If your employer offers a retirement plan that comes with a match and you haven't started contributing, $500 is a great way to get started. Your goal should be to meet the requirements needed to qualify for the full match. Free money. You don't want to ignore free money do you?!
Purchase a certificate of deposit
Certificates of deposit, also known as CDs, are one of the safest investment avenues that exist. You get a guaranteed return on your investment in terms of the interest that is paid to you, regardless of what's happening in the world (even though interest rates on CDs are only slightly higher than savings accounts). Not only is your return guaranteed, your money is also FDIC insured.
Buy to flip
Buying popular items to flip for a profit is a great side hustle to start. You can find popular items such as furniture, appliances, gently used baby products on websites like Craigslist that you can then resell for a higher price through the same avenues.
Pay your student loans or other high interest debt
Got student loans? $500 can make a difference in knocking down that debt. The same applies to paying down high interest credit card debt. The return on your investment by paying down debt is the interest that you won't have to pay.
Sign up for a DRIP
A DRIP, also known as a dividend reinvestment plan, is a plan you use to purchase stock and then reinvest the dividends into buying more stock. This approach allows your money to grow over time through these reinvestments combined with the power of compound interest. $500 is a great way to start a DRIP account which you can open with most brokerages.
Sign up for a coaching session with an expert
Be it financial, career, or life coaching, there are several well vetted experts out there that can help you get through a slump or help you improve yourself in specific areas. Their expertise can give you a fresh perspective, new information, motivation, and accountability.
Don't allow the fact that you only have a few hundred dollars prevent you from putting your money to work through investing.