I was thinking the other day, it's really hard nowadays to save money, especially for young people. Some of them barely make the ends meet and obviously can't save or invest. However, for the sake of the "game", let's say you now have only $500. What do you invest them in and what will your strategy be from this point?
I'd say open up a discount brokerage IRA / Roth account, and either put that $ into an index fund, or perhaps 5-6 stocks you like - IF you've done your homework and feel confident about your stock picking ability. I'd also suggest adding to that $500 whenever you can.
My strategy would be to buy and hold. Being young, I shouldn't need the money for anything at least in the short and mid-term. I would place the $500 in something like a unit trust. Instead of buying shares, you're buying a diversified pool of assets. Unit trusts are also a lot more affordable than actual stocks. If you're in it for the long run, you could definitely make a very good return over a long period. Over time, I would also purchase more units as my disposable income grows.
Whether it's $500 or $5000 it's all about diversification. Personally I'd split it up a few ways putting some in BitCoin and high yielding BitCoin Loans (High risk as well), toss some extra into my 401k, then play around with a stock or two.
$500 is so little. Then again it's still enough to get started. It really depends on what your long term plans are... what you hope to gain by investing and how often you can add to that original $500. If it's just that $500 then mutual funds / ETFs are the way to go as it's the only way you will get some decent diversification with that amount of cash.
I will say this, if you are in any sort of debt, that money should go to pay off the debt. That is what I would do. We put ourselves in this dilemma of buying items on plastic when we really can't afford it, and then have to pay other people for years on things that we didn't really need. It took me years to figure this out. But now I put all extra cents towards paying off my keepers. Living debt free is going to be so nice. If you have no debt and want to save that $500, I would say buy some silver or gold bullion and stash it away. To have $500 cash in your hands will be way to easy to go blow it on stuff you don't necessarily need. You will be going out to eat, buying extra clothes or accessories, wasting away the money. But I would invest in gold or silver bullion because I know I would have $500 worth of precious metals assets. And its not like I can just grab a gold bar and go to the mall to buy shoes. Its an investment that is hard to spend.
Completely agree. If you wanna put your money in stocks, though, just be known that the market is a volatile one.
I would put in a Wealthfront account. WF accounts are well diversified and at that investment level, no fee. That assumes you are looking to buy and hold, not make any short terms gains.
I wouldn't invest in Bitcoin, not even if I had $5 million. Even if I am not against it, I prefer real money and real assets, not some virtual coin that has a lot of ups and downs. Whoever invested in Bitcoin 2-3-4 years ago is not a millionaire or even retired; in my opinion, Bitcoin is a lost train.
This sounds pretty good. A lot of companies/banks have some funds like these where the management fees are low and there are no transaction fees. It's great because that way you can grab a few different funds with that $500 and also keep adding to them even in tiny increments. When there are no transaction fees even $20 a month is doable and over time that will grow into something much more.