What Can I Invest My Money In To Make Money

Invest Monday

What can I invest my money in to make money? How can you invest when you have more than a few dollars available, but lack the thousands that traditional investment vehicles require? The easiest answers are start now and invest what you have. Let’s borrow from Nike, and say “Just Do It.” Here are nine ideas for you to look at if you have between $100 and $1,000 available. 

1. Savings Accounts

Yes, this investment strategy is safer than safe. You won’t earn much money on your investments.  However, you can invest small amounts of money in a savings account, earn a little bit of interest, and have zero risk of loss. The best use of a savings account is as a place to accumulate larger amounts of capital for use with future higher risk/higher rewards investments. 

2. Betterment

There are a number of “Robo Advisors“, online investment platforms that offer professional portfolio management with very low fees. One of the preferred ones is Betterment. You first complete an online questionnaire to determine your risk tolerance. Based on that, a portfolio is created for you with an allocation that includes several different exchange-traded funds (ETF).

Your only responsibility is to fund your account. You won’t have to deal with investment selection or re-balancing your investments. Betterment has no minimum initial deposit requirements. Open your account and commit to a monthly contribution of as little as $100. The annual management fee is 0.35% of your account balance, on accounts of less than $10,000. 

3. Lending Club

Lending Club is an online peer-to-peer lending platform in which borrowers apply to get loans, while investors/lenders – supply the cash for those loans. Investors can be paid handsomely for their investment. Rates of return in double digits are possible with Lending Club. With your $1,000 minimum initial investment, you can spread your portfolio among 40 different notes. The limitation with Lending Club is that many states have minimum net worth requirements for you to invest on the platform. So while the actual cash outlay is small, you still need to show a significant asset base in order to participate.  

4. M1 Finance

M1 Finance has the largest list of no-fee investments available through any brokerage. Like Betterment, they allow you to automatically invest in various verticals, but the brokerage also allows you to trade both stocks and ETFs for free. That’s right FREE!  M1Finance also lets you purchase fractional shares. This means that if Apple stock is currently $400 a share, you can purchase $50 of Apple stock and own 12.5% of a share. Finally, you can get a free financial analysis from M1 Finance, before you invest a single dollar.

5. Fundrise

Fundrise makes investing in real estate so easy. This real estate investment trust allows you to invest in real estate without flipping houses or becoming a landlord. Your money is invested in real estate developments. Whenever they make money, you make money.  Returns vary based on the project in which you invest. Fundrise investors received an average return over 11% last year.  Fundrise uses technology to uncover profitable real estate projects based on your investment goals.  If you’ve ever tried your hand at real estate investing, you know that it isn’t cheap. You can invest with as little as $500. You can also have a more hands-on option by selecting from a number of Fundrise’s projects to invest in.

6. Paying Off Debt

There are two main reasons for you to pay off debt. The first is that you shouldn’t be investing small amounts of money if you have debt, especially unsecured debt or have no money saved for emergencies. The second is that paying off debt is one of the best ways to lock in an above average and guaranteed rate of return on your money. 

If the interest charge on a credit card balance is double digits – there are no places available to the average investor to get a guaranteed double-digit return. If you have a credit card with a balance of $1,000 with an A.P.R of 15.99%; by totally paying off that card, you’ll realize a nearly 16% rate of return on your money! One way to make that debt go away faster is shifting the balance to one of the many credit cards with 0 interest.  Each payment goes directly to the balance on the card and not to interest.  

7. US Treasury Securities

Looking for a ultra safe investment that is protected from market swings? Invest in US Treasury Securities. These are debt obligations issued by the US Treasury Department, to fund the national debt. Securities have maturities that range from 30 days to 30 years. You can buy these direct through the Treasury’s Department’s portal Treasury Direct and you can buy in denominations as low as $100.  You can also sell your securities there with no early withdrawal penalties for doing so. Another Treasury Direct investment is Treasury Inflation Protected Securities (TIPS) too. These pay both interest and make periodic principal adjustments to account for inflation based as determined by the Consumer Price Index.

8. Dividend Reinvestment Plans

Known as DRIPS, many companies offer these plans allow you to invest small amounts of money into stocks of companies that pay dividends.  If you want to invest directly in stocks, and you like certain companies, you can invest in them without having to pay any fees. DRIPS allow you to build your investment over time from making periodic contributions such as payroll deductions. This is an excellent way to dollar cost average your way into large investments in major companies. As you earn dividends, the money is automatically reinvested to buy more company stock.

9. Online Brokerage Firms

You can actually open up an account with many online brokerage firms for $1,000 or less. One example, the minimum initial deposit to open an account with Charles Schwab is $1,000 but that can be waived if you set up an automatic monthly transfer of $100 through direct deposit or use a Schwab investment product linked to your account. You can also open a brokerage account with E*trade and TD Ameritrade with no minimum initial deposit. An advantage of investing through a brokerage firm is access a wider variety of investment choices verses what you have through direct investments alone.

We recommend you always consult a professional and do your due diligence before you invest your money.

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