Investing $1,500 is an excellent start to any long term investing strategy.
While it may not feel like a lot, it gets you into a few more investment choices than smaller amounts. Whether you have a single lump sum investment of 1500 dollars or are looking to invest $1500 per month, these ideas can help you get started.
Ways to Invest $1500
High-Interest Savings Account
Savings accounts are the safest place to put your money. They are not the most profitable.
While this article is about investing, it may be a good short term move to put your $1,500 investment into savings. The reason is that $1,500 doesn’t open up all the investment options that are out there.
You may want to put this money in a high-interest savings account where it can get some guaranteed interest while storing up a little more. The big turning point for gaining access to investment choices is for investments of $3,000 or more.
The current top savings account rates include:
Betterment is a robo-advisor that allows you to invest your money without having to manage it. Instead, you do a short series of questions on sign up to determine your tolerance for risk, and they do all the investing for you.
This is all done through algorithms that not only invest; they also take into account avoiding taxes. Anyone looking for a hands-off investing approach with solid results will want to learn more about Betterment.
Fundrise allows you to invest in real estate without any of the research and risk that a physical real estate investment would take. The company allows smaller investors to be a part of several real estate investment trusts (REITs).
These trusts pool the money of the investors, and the managers do the work of purchasing, maintaining, and selling the real estate. This type of option was previously only available to accredited investors, but Fundrise only requires a $500 initial investment to get started.
WorthyBonds has positioned itself as a middle ground between the low-interest high safety of a savings account and the volatility of stock-based investments. Instead, you invest in business loans with a return of 5%.
The loans are all secured loans, which means the borrower had to put up some form of physical collateral to take out the loan. The collateral is always valued at 25% more than the loan itself, so they can always get your money out if the lender fails to pay.
Exchange-Traded Funds (ETFs) are a way to invest in many different investments at one time with the convenience of buying a single share like you would a share of stock.
ETFs can be made up of hundreds or even thousands of different investments, and you get to be a part of all of them by buying a share of the fund. The value is tracked and traded, just like a share of stock.
On top of that, you can buy ETFs with zero fees from brokerage accounts like Ally Invest. Ally has all the tools you need to understand and evaluate different ETFs and thousands of ETFs to choose from.
Stocks have been a reliable way of investing for over 100 years. Even with all the ups and downs of the market, people who stay in and diversify have made a lot of money.
The key is diversification. I would not recommend investing your $1,500 in just a few high priced stocks and calling it a day. Instead, research the stocks you find interesting and buy small amounts so you can be diversified, or educate yourself using a stock trading guide before jumping into trading.
With this small of an investment, the best way to buy individual stocks while focused on diversification is through fractional shares. This means you can buy a smaller amount than one share, like $50 of Apple stock (currently trading at over $250 per share).
Not every brokerage will let you do this. My favorite is M1 Finance, which has both fractional shares and free trading on stocks and ETFs.
Giving to Others
There is no better way to ensure a return on your investment than giving to a charitable cause that you believe in. Not only does your money do good in the world, but it will also do good for you.
When we give to causes that are bigger than our own self-interest, it puts things in perspective and allows us to think about life more clearly. In my family, we always give 10% of any money we earn to our local church, and we have never regretted it.
Mutual funds are another way to diversify your portfolio into many different investments. I would typically place this higher on the list, but many of the best mutual funds require an initial deposit of $3,000.
There are many that you can get started with for less than this, and you can do very well until you hit that $3,000 investment mark. You can purchase mutual funds through any brokerage account.
Retirement accounts are designed to allow you to invest small amounts of money over and over so that your retirement nest egg can grow. If your employer has a retirement plan that is an excellent place to start of you can look at an individual account.
The most popular retirement accounts and the type of account include:
- Roth IRA (individual)
- SEP IRA (self-employed)
- 401 k (employer)
- 403 b (employer)
If there is a college course, online certification, or online course that you can take that helps you to be more marketable to employers or clients, then it could be your best investment.
The other option is to put your 1500 dollars into an educational savings account, which can be used for educational purposes for you or a family member and grows tax-free.
If you have debt, then paying that off can be a great place to invest $1500. If this doesn’t feel like an investment, then think about the interest you are paying out every month by carrying any high-interest debt.
Many credit cards will have an interest rate that is higher than 20%. You will be hard-pressed to find any investment that will get you returns that are that high.
Cryptocurrency is a volatile and confusing investment. That being said, if you are willing to buckle down, learn the markets, and make smart investments, there is money to be made.
You can purchase crypto through an exchange. I currently use Coinbase as my main means of purchasing Cryptocurrency.
How I Would Invest $1,500
In our family, giving to our local church is a priority. So we would do our full tithe of $150 before we think about investing any of the money.
Hand-off investing is really appealing to me. Betterment allows me to get into the stock market with a very diversified portfolio without having to do any of the research on investments.
Fund Rise ($500)
Being able to put 1/3 of my $1,500 into real estate is very appealing. A $500 investment in Fundrise gets me away from stocks while having another hands-off investment option.
Worthy Bonds ($200)
While I want money working for me, I also want to have some money ready for when an opportunity comes along. Worthy allows me to get a 5% return while keeping the money completely liquid.
An investment of $200 at that rate gives me the best chance to be ready for the next great deal.
Savings Account ($100)
Once again, keeping money ready for an opportunity is important when you are investing small amounts. This $100 investment in a savings account could be paired with the Worthy Bonds money to be ready for an opportunity.
I have just begun investing in Crypto, so I would not put a lot of money here, but a risky investment of $50 gives me another opportunity to learn about this growing market.
Final Thoughts on Investing 1500 Dollars
You will notice the overarching theme when I talk about investing is that you need to be diversified. Whether it is $1500 or investing 15,000 dollars, not putting all your eggs in one basket is what will allow your investments to grow.
Educating yourself on how you are investing is the final piece to being ready to invest. You can turn a $200,000 investment into a $60,000 investment, and vice versa, depending on how well you know your investments.
So take the time, learn what you are doing, and you could change from learning how to invest $1,500 to how to invest a million.