How to invest your first $500

Investing is such an important topic in the personal finance community. There are some amazing individuals out there with a breadth of knowledge on the topic. Keep reading if you want to learn how to invest your first $500.

If you are just starting on your personal finance journey you may start to look for some of these people to glean some knowledge off of. I’ve been down that road before and it seems there is never enough time to learn all I need to know.

I’ve been in your shoes. I remember starting out on my personal finance journey. It took a while to save up a sufficient emergency fund. Then it came time to start paying off some of our debt and that seemed to take even longer.

Those are all great steps in a long journey. However, what do you do now? Before it was so easy. Save 6 months of savings? Check. Pay off high interest (or all) debt? Check. Start saving. Check.

Then this whole investing thing comes along. It doesn’t seem quite as easy. Frankly, it seems pretty open ended. How in the world am I supposed to choose how to invest it. There are index funds, dividend stocks, and not to mention all these real estate companies popping up everywhere.

What am I supposed to do?

Fortunately, when it comes to how to invest your first $500, I think the answer is pretty easy.

How to invest your first $500

If you’ve only got $500 I do think the answer from an investing perspective is pretty straight forward. This answer is too not invest it at all.

If you’ve got all your high interest debts paid off, solid cash flow each month, and a sufficient emergency fund then its certainly something to start thinking about.

However, I think there are much better uses of your time. There are so many more useful things you could do to continue to accelerate your financial journey. The question of investing should start much later. 

Maybe wait till you’ve got $5,000 or even $10,000 ready to invest. This is the time to take six months and start reading and learning. Right now? I’d try and make more money or watch that budget even closer.

Frankly, this $500 could go along way if you invested it in something other than stocks and bonds.

how to invest your first $500

Investment alternatives for $500

I’ve already touched on the importance of investing in yourself. After going tens of thousands of dollars in debt and getting two degrees I suppose I may be the poster boy for investing in yourself.

I can’t emphasize the importance and value with respect to investing in yourself. It will allow you to be more valuable at work or with a side hustle you wish to start. Two overarching things come to mind if I had $500 with no immediate use.

Start a business or side hustle

In my opinion this would be the best use of the money. Whether you wanted to flip items you find on craigslist, start a services business or even start a blog, $500 would go a long way.

The benefits of a route like this are that you get to learn and have the potential to make money. With this path you get to win on two fronts.

Take a class

With $500 you could take multiple classes on Udemy or even take a class or two at a local college.

Choose a class that will help you out with a specific skill set to advance your ambitions in your career or your side hustle. You can’t go wrong with either of these.

Wrapping up

I hope you see where I’m coming from. First off, congratulations on making it this far on your personal finance journey. 

If you haven’t already saved up an emergency fund and paid off high interest debt I’d certainly start there.

Now that you are saving up some money I do think its important to invest, eventually. However, now is the time. Keep your head down and make it happen.

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