How to Invest $6,000 – And Not Blow It!

I was a new investor when I first started learning how to invest $6,000.

I had saved enough in my Roth IRA to get into a few different mutual funds and researched what funds would make the most sense for my long term goals.

The number of investment options since that time has grown significantly. It has made investing your money easier, and yet, the sheer number of investments can be confusing for many people.

To help cut through the confusion, I have put together this list of investments for all levels from beginner to experienced investor and how I would invest 6000 dollars today.

Ways to Invest $6,000

Betterment

Betterment is a brokerage that does all the investing for you. As one of the top robo-advisors in the United States, Betterment uses the information you provide to craft an investment strategy that meets your needs and tolerance for risk.

Once you begin depositing money into the account, it will invest and rebalance your portfolio for you. The platform even reduced the amount of taxes you play through tax-loss harvesting.

It is an excellent option for those who are brand new to investing or would like to take a hands-off approach to their investments.

Fundrise

Fundrise empowers people to invest in real estate without having to buy, repair, or sell the real estate.

Once you open an account with Fundrise, you deposit money into one of their many real estate investment trusts (our Fundrise review details many of those trusts). That money is then invested for you into various real estate investments.

Fudrise does all the hard work while you can diversify your investing into real estate and get a nice return on your money.

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Worthy Bonds

Worthy allows you to invest in the short term debt of small businesses. They do this through corporate bonds that help these businesses bridge a cash flow shortage.

The bonds are backed by the company’s property that secures the debt. If a business were to default on their debt, Worthy would seize the property, sell it off, and return your investment to you.

The bonds pay 5% which is excellent for a secured investment.

Stocks With Public.com

Investing in individual stocks can be one of the most profitable investments on this list; it is also the riskiest.

Investing in stocks takes time to understand your investments and diversify into several stocks so that one of them going belly up does not wreck your entire portfolio. Public.com makes diversification easier by allowing you to purchase fractional shares.

Fractional shares work by giving you the option to purchase as little as $5 of a stock, no matter the full share stock price. For example, as I write this, Netflix stock is $521 a share. That means your $6,000 investment could buy eleven shares of stock with $269 leftover.

That does not leave you a lot of room to diversify. With Public, you could buy $100 of Netflix stock, $50 of Disney stock, and on and on. You invest in stocks while not putting all your eggs in one basket, and Public does not charge and fees for your trades.

Savings Account

A savings account is one of the most boring investments you can find, and they do not pay great interest.

I use them to store my emergency fund or for a place to hold my money that is safe while I figure out where to invest. You can get much better rates from online banks than the local bank down the street. The best current rates include:

ETFs

Exchange-traded funds give you the option to purchase hundreds of investments in the same way you buy a single stock.

ETFs can follow an entire index, like the S&P 500, or a specific type of investment, like health care or bonds. Since they trade like stocks, your best bet is Public.com which doesn’t charge any fees and allows for fractional shares of ETFs.

Mutual Funds

Mutual funds have been a tried and true way to diversify your investing. Like ETFs, Mutual funds can have a large focus like an entire index of stocks, or a very narrow focus, like investing in the energy industry.

The one downside to mutual funds is that you usually have to have a minimum amount to invest, an investment of $3,000 is a typical amount to get started in a mutual fund.

I am a fan of Vanguard mutual funds and have been using them as part of my investing strategy for more than 15 years.

Charity

Giving to charity is not an investment that will pay off with a direct monetary return on investment, but it does two things for you that make it one of my favorite types of investments.

The first is that giving to something bigger than yourself shapes the way you look at the world. Instead of being me-focused all the time, you see a bigger picture; it helps you appreciate what you have and manage your other investments much better.

Finally, giving to charity tends to open up opportunities for you to meet other people. These relationships can lead to business opportunities and investments you would have never had without first investing in a charitable organization.

Education

Investing in your education or that of your children can pay off in pay raises, new jobs, or keeping your kids from moving back into your house as adults.

Whether you choose to pay for college courses or other new skills, investing in your education will pay off.

Debt

Paying off debt does not feel like an investment, but those who have high-interest debt holding them back can make huge gains by getting it out of their life.

If you have a credit card, it could be charging you 15-30% interest. There is not an investment on this list that can consistently overcome that kind of negative interest.

Paying off high-interest debts also reduces stress and frees up the monthly payments to direct that money toward investing. Imagine being able to make an extra $500 investment each month because you got rid of your debt.

Cryptocurrency

Cryptocurrency is still very new for most people, even though it has been around for more than a decade. There are now hundreds of coins and tokens you can purchase.

Crypto is in a very early stage of its development, making it hard to understand and volatile. This means there is a great opportunity to make and lose money, depending on your research.

I am using Coinbase as my main exchange platform because it is based in the United States and has FDIC backing.

How I Would Invest $6,000

Investing $6,000 has so many options that I find it useful to run my own scenarios. It helps whoever reads my information, but it also helps me make better decisions on the investments I make.

Charity ($600)

Giving 10% of the money I earn to my local church is a basic tenet of my faith tradition. This investment of $600 is one of the easiest to make since my wife, and I always make it first before we do anything with our budget.

Betterment ($1000)

I love hands-off investing. It allows me to keep getting results while focusing my learning on other investment options, like stocks and crypto.

Betterment is one of the best robo-advisors in the USA and has done an excellent job investing for one of our Roth IRAs. An investment of $1,000 is a good percentage for hands-off investing.

Fundrise ($1500)

The name of the game for long term investing is to stay diversified, and Fundrise allows me to get my money into real estate without the time and effort of buying, selling, or renting out properties.

Having an investment of $1,500, 25% of my $6,000, gets a portion of my money out of the stock market and into real estate.

Worthy Bonds ($2000)

I currently use Worthy Bonds to hold any money that I want to have ready for an investment opportunity. Having a $2,000 investment ready to go when a deal comes along is a good strategy.

Getting 5% interest on that money is an even better strategy.

Individual Stocks ($500)

I have begun to do more individual stock trading than I did in the past. Finding companies with long term advantages and is something I enjoy doing.

I am not, however, a stock-picking genius. Thus, I am only investing $500 in stocks, so I can continue to learn and invest more in the future. I am using Public to make my trades for their fractional shares and free trades.

Crypto ($400)

I am fascinated by the cryptocurrency technology. I believe it will have a significant impact on reducing the ability to sell counterfeit items, especially in third world countries.

I am still new to buying crypto, which is why I have stuck with only investing $400 and Coinbase as my exchange.

Final Thoughts on Investing 6000 Dollars

Whatever path you choose when deciding how to invest $6,000, you want to make sure that you stay diversified as much as possible.

In my scenario above, you can see that I made a mix of stocks, real estate, small business loans, and cryptocurrency. I kept in mind that I have a long time to invest, so I went with a little more risk than I would if I were closer to retirement, while giving myself small amounts in the areas where I am learning to invest.

Finally, you want to get started now. Get that compound interest working for you and turn that $6,000 investment into a $300,000 investment or more!