How to Invest $50 to $5,000
Investing | Investing 101

How to Invest $50 to $5,000

The investment market is driven by several factors – some of these are completely outside of your control. There’s also the fact that most instruments of investment require a hefty capital sum if you want to realize any real gains in a reasonable period of time.

But, if you’re careful where you spend your $50 to $5,000 and have a reasonable risk appetite, you may be able to make your money work for you. Risk investing in today’s economy requires a careful understanding of your options and goals.

Here’s our pro tip #1: The key is to plan for low risk. Never, ever go all-in on any instrument of investment. Don’t open up lines of credit just to invest them.

Here are the most efficient strategies for smart investing of your funds to plan for low risk.

The stock market

Investments growing gradually.

When it comes to low risk investing in today’s economy, this is a non-controversial starting option. The stock market has been proven time and again to grow your investment exponentially (if you carefully hedged your bets). Start your low risk investing journey by opening a trading account and investing in stocks that you can afford with $50 to $5,000. So which stocks are available? The numbers keep changing every other hour and how they change depends on many external factors.

You’ve probably heard stories of some random dude who had the foresight to invest $500 in Google stocks and now lives in a Disney castle. Then there are stories of people pouring their life savings in Bitcoin and now live on the streets. Who knows a quick tweetstorm by Elon Musk may send your $50 stock surging by $100 over night. But the pendulum can swing either way – and that $50 may just poof into thin air.

Identifying stocks is no easy thing. Once you do pick a stock, you have to be prepared for its value to stay stale, skyrocket, or fail.

ETFs – Quickly invest $50 to $5,000

Diversify your portfolio

So if you’re not too stock-savvy and would rather trust the research of hedge fund managers, you’re probably better off with exchange traded funds (ETFs). The best thing about ETFs is that they minimize your risk by diversifying your investment into hundreds of equities instead of just putting all your eggs in one basket.

To keep things realistic, you’re not going to be able to buy many Google or Amazon stocks with $5,000, but many ETFs will be within your budget and contain small bits of that stock.

Cash money

You can open up ETFs by opening an account with an investment provide and choosing a profile that matches with your goals. Since EFTs diversify your profile, if one sector does not perform well, it won’t drag down your entire investments. We highly recommend buying index ETFs in an index like the S&P 500, so for one small down payment of $50 to $5,000, you could buy slivers of many fortune 500 publicly traded companies in the US.

In our opinion, ETFs are one of the safest strategies for smart investment.

Robo advisors – Plan for low risk investing

Investments with $50.

If the above investment methods sound a bit confusing to you, consider hiring robo-advisors. This is automated investing that uses machine learning and highly trained algorithms to minimize your risk profile while selecting stocks that suit your goals. Instead of going back and forth and making hard decisions, you can let the robo-advisor take over and just handle everything.

Robo-advisors guide you through the maze of stock bonds so you won’t have to get your head around mind-bending investment concepts.

Robo-advisors – A small investor’s step to invest $50 to $5,000

The best is that many robo-advisors let you start out with a minimum investment balance of $50 – and they will create a completely balanced portfolio of EFTs using just a single dollar. These platforms have the capacity to sift through thousands of factors and variables to make a highly qualified decision that works in your favor.

Cryptocurrency – Investing in today’s economy

Bitcoin

Cryptocurrency is a big deal right now for even the most inexperienced investors. However, it’s an extremely volatile market and it’s not uncommon for billions of dollars to virtually disappear in a matter of seconds. So if someone invested $60,000 worth of Bitcoin on March 2021, they’ll realize that their holdings are now worth less than $32,000.

Real estate – Low risk investing in today’s economy

Investments in real estate.

Real estate is always on the rise and arguably has the best rate of return. The only problem is that the initial investment requirements are huge. $50 won’t buy you a condo in Floridian beaches with lavish amenities, but it would help you buy shares in real estate investment trusts (REITs). An REIT is a company that lets you buy shares in their real estate investments.

Every small investor’s step into the real estate market should start with REITs. Some robo-advisors include real estate as part of investment portfolios.

History shows us that real estate has always been low risk high value.

Invest $50 in a range of small investing bonds

Bonds are low risk and have high reward

Think of bonds like a loan agreement. You give money to the government with the assumption that you’ll get paid back at a later date with interest. There are several types of bonds you can choose from, including municipal bonds and government bonds. These investments are fairly low-risk (because when was the last time you heard of the government going bankrupt?).

Diversifying your portfolio with bonds is a great way to balance the inherent risk associated with the stock market and crypto assets. You can purchase bonds directly from the government through discount brokerages or via investment platforms.

Open a high yield savings account

Monetary growth overtime.

Stocks can take an investor through the maze of stocks and if you want to avoid that, you can open a high yield savings account. In most cases, you can grow your money relatively quickly by opening a high-yield savings account (not just any other account).

The biggest difference between traditional accounts and savings accounts is the higher interest on your deposits. Most banks will let you set up an account relatively easily and you can start growing your wealth right away.

Just make sure to compare accounts before you find an option that works just for you.  Investing in the current market requires quite a bit of research.

Investing your $50 with minimum risk

Bitcoin

Just keep in mind that the low risk comes with low returns. So bonds are low risk but low reward. Stocks are high risk and high reward, but, investing in stocks can be a bit like doing a coin toss, the more times you do it, the more likely it is that you’ll get heads (or tails). The longer you hold your stocks, the more consistent and positive your results will be. When it comes to stocks, time and patience are going to play a big role. There’s no get rich quick handbook for small investors.

If you have the discipline to not withdraw your money from your investment instruments, then you can realize growth in the long run. But you have to hold out as long as you can for 5 stars improvement. It’s not a good idea to growth radically in so short a time.

How much can you make in the current economy by investing $50?

Piggy bank

You can’t peer into the future but you can make calculated guesses based on past performance. At the end of the day, you’re investing in something that may or may not work out. But, more times than not, stocks in the S&P 500 index have proven to be profitable and have survived numerous economic depressions. They have the best low risk high value for small investors pointing ahead.

If investing in the new crypto currency market is daunting, try to look at customer reviews.

In the past, the economy changed so radically that there’s no telling if the no-name company you invested in today, turns out to become an Amazon of tomorrow. A robo-advisor can help in pointing the way toward such opportunities.

Wrapping up

Credit cards.

A quick look at historical performance will show that us that the stock market grew by 7% per year on average. So if you invested $50 from 1950 to 2009, your money would have turned into about $142. Of course, the more you invest, the greater your multiplier effect. These are the latest and safest strategies that are making sense of financial opportunities available in the current climate.