Many personal finance experts agree. Even if you have a small amount of money -- say $500 -- you should still invest those funds into a broad index fund. After all, we all have to start somewhere.
I tend to disagree. You can get a far better bang for your buck if you take an unconventional path. Especially if you only have a small amount of money.
Books can be one of the best investments you can make. If you’re interested in a topic, putting $500 towards 15 or 20 different books on the subject can pay off in a big way. After reading that much on anything, you’ll go from ignorant to an expert pretty quickly.
You don’t even have to spend that much money on reading. The library has enough books on any subject to keep even the most voracious reader happy for the price of a decent hamburger.
Another great investment is in education. Just a few hundred dollars invested in something can be the basis for a new career. $500 can go a long way towards getting a license to sell life insurance, mutual funds, or even starting an online business. These all have the potential to earn back many multiples of the original investment.
Finally, an easy way to make money on only $500 is by flipping things. If you know a market, keep an eye out for sellers with no idea how much things are worth. I’ve made extra cash before flipping video games, unwanted laptops, and even an old minivan.
$500 is too little money to invest conventionally. You’ll do far better if you look outside the box a little.
