Wondering How to Invest $5,000? Here are 4 Options
You’ve worked hard to save your money.
Now that you have some extra, you know you should invest it. After all, that’s what the experts tell you. But how?
Sure, you can Google investing tips all day, but, really, you just want someone to tell you what to do… preferably someone who’s not a pricy financial adviser.
Don’t worry. That’s why we’re here. We’ll show you four specific and super simple ways to start investing your money. None of them take more than five minutes to sign up for, and once you’re done you can sit back and — fingers crossed! — watch your money grow.
1. Invest Like a Tycoon (Even if You’re Not Rich)
Want to try real-estate investing without playing landlord? We found a company that helps you do just that.
Oh, and you don’t have to have hundreds of thousands of dollars, either. You can get started with a minimum investment of just $500. A company called Fundrise does all the heavy lifting for you.
Through the Fundrise Starter Portfolio, your money will be split into two portfolios that support private real estate around the United States.
This isn’t an obscure investment, though. You can see exactly which properties are included in your portfolios — like a set of townhomes in Snoqualmie, Washington, or an apartment building in Charlotte, North Carolina.
You can earn money through quarterly dividend payments and potential appreciation in the value of your shares, just like a stock. Cash flow typically comes from interest payments and property income (e.g. rent).
2. Invest 15 Cents of It in the Stock Market
Yeah, we know what you’re thinking: 15 cents? How’s that going to do me any good?
Well, that leftover change from your morning coffee and evening grocery hauls could turn into more than $1,000.
That’s what happened when Penny Hoarder reader Jeremy Kolodziej opened an investment account with Acorns. The app’s round-up feature bumps each of your purchases up to the nearest dollar and puts the spare change into the stock market, which helped him mindlessly save $1,076 in about 20 months.
“It’s a virtual coin jar,” he says. “You don’t even think about it.” He used the spare change to pay for two vacations.
And if you already have a nice stash of money you’re looking to invest? Even better.
Plus, Acorns invested the money for him, allowing him to grow his savings — without studying stock prices or managing trades.
The app is $1 a month for balances under $1 million, and you’ll get a $5 bonus when you sign up.
3. Grow Your Money 31x Faster — Without Risking Any of it
Yeah, you’ve heard this before. What usually comes next? A four-hour timeshare presentation. (No, seriously, it pays for itself!)
But there’s a legitimate way to grow your money a lot faster than the average person — with no risk.
It’s with a bank called Varo. The average savings account pays a paltry .09% interest rate, but when you open a checking and savings account with Varo, it will pay you up to 31 times that amount.
We know opening a new bank account isn’t exactly everyone’s idea of fun, but Varo makes it easy. You can open an account with just a penny, and more than 750,000 people have already signed up.
Oh, and there are no monthly fees.
So forget that killer stock tip from your uncle — you’re set.
*Varo disclosure: APY is accurate as of January 29, 2019. This rate is variable and may change. No minimum balance required to open account. Balance in savings must be at least $0.01 to earn interest. Deposits are FDIC insured to at least $250,000 through The Bancorp Bank; Member FDIC.
4. Get the Most out of Your 401(k)
Got a 401(k)? You’re on the right track. Now that you’ve got $5,000 worth of wiggle room, increase your contributions to fully capitalize on your employer’s match.
Then, make sure your 401(k) is doing what you need it to. However, tapping into that account and deciphering the information — or lack thereof — can be hard.
There’s a robo-adviser for that. Blooom, an SEC-registered investment advisory firm, will optimize and monitor your 401(k) for you.
It gives you an initial 401(k) checkup for free, and you’ll get to know your account a little more intimately. Find out if you’re paying too many hidden fees, have the appropriate amount invested in stocks versus bonds — that kind of fun stuff.
After that, the tool is $10 a month to use to continue to monitor your retirement account. Let Blooom know your target retirement age, and it can help you get there by investing more and less aggressively.
Now you have four solid options to help you start investing that $5,000. It’s time to sit back, relax and watch your money grow!