If you have found $500 dollars with which you can invest you will want to consider your best options. It is important that you research the different areas that you could use the money to invest in and make sure that you get the most return possible. You need to be prepaid for the risk that you are considering.
If this is all of the savings that you have then you want to be cautious with the risk that you are prepared to take with your capital. If you are looking to make the most money then you will need to consider the options that have some high returns.
The high returns will mean that you need to have to look at the options with a higher risk. The higher the risk means that there is more chance that you will lose the entire amount of capital. But there are options that you can take that are less risky and they will still make more money for you than if the money was just left in a savings account. What you will need to consider is the length of the term that you will need to leave the money invested for. Any investment needs time and this is a minimum of five years, the longer that you leave it the more the money will earn for you and this will mean that you will have more money than when you originally started.
It is important that if you are thinking about investing in stocks and shares with your $500 then you will need to have opened a broker account. This will be where you will store your stocks and shares as well as using them to purchase the items that you choose.
You will need to be aware of the charges that will be needed to be paid and this will depend on the option and the company that you choose to invest with.
Always do your own research for the company that you are looking to invest in this will give you the greatest understanding about the long term investment that you are considering. Never just invest in a company because you have heard a rumour, always make your own independent research of a company.
If you are thinking to invest your money in bonds then you will need to consider the bond options that are available to you. The perfect bond will be there for you but you will need to find the one that suits your needs.
There are many different options of bonds and some are transferable and others are just yours until you cash them in. If the bonds are from the US government you might need to be a citizen to be eligible to purchase these.
- I savings bonds, these bonds are a government based bond and you need to purchase them through a Treasure direct, account. They are a non transferable bond, and if you want to cash them in this is possible before the maturity date. The maximum per year that you are allowed to purchase is $10,000 in electronic bonds and $5000 in paper version.
- EE bonds, these are bonds that are provided by the government. You must hold the bond for a year before you are allowed to cash them in, you will loose interest if you cash them in before the 5 year point of the bond. They are valid for thirty years.
- Corporate bonds, these bonds are provided by companies and it depends on the company position as to the rate that the bond will be offered at.
- Junk bonds, If there is a high proportion or the bond has failed to pay the coupon on time then the bond can be called a junk bond, these are considered very high risk.
- Municipal bonds, this bond is a highly traded commodity and the value of the bond can rise and fall depending on a number of different factors.
It is possible to build a portfolio up with using ETF’s these are relatively cheap to purchase because you don’t have to pay large fees, it is purely the cost of a normal trade. This means that you will be able to put more money into the product rather than lining the pockets of the brokers. ETF’s are easily to buy and sell, it is possible to hold on to the ETF’s if depends on the plan that you have created for your investment portfolio.
The idea of the ETF is to track the index that it is following, this gives the investor a wide choice of different areas that investors can choose, if there is an index there will now be an ETF to track its movements. It is possible to build a great portfolio and have similar success to the larger investors and yet you are doing the same on a smaller scale.
You won’t be paying the fees and the charges that you will if you opt for some of the managed options that are available, this will mean that you will have more to invest and this will mean that you can use more of the $500 to make more money.
You will need to make a decision as to the risk that you are willing to take and from this you need to move forward and make the decision to invest, no holding back. Choose the option that suits your needs.
You might find that there are options that are not available to you because you don’t have enough capital to invest, but don’t give up you will find some option that makes your money work hard and start growing money for you.
Therefore it is possible to invest with just a $500 and you can start making that money build but you must be aware that by investing in the stock market or just purchasing a bond you do have to be aware that you can lose the whole of the capital. This is why you get more for your money by investing because you are taking greater risk with your money rather than just letting it sit in an account and not making it work for you.
What options are you considering and why?