Small Investment Ideas for Students with Less Than $500

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Looking for low-cost investment opportunities? Here are quick and small investment ideas for students those that have less than $500 to invest.

Looking for small Investment ideas for students? Then you are in the right place! I’ll share investing options for students and millennials to start investing with little money. 

We know that millennials are good savers, outperforming other generations by as much as 36%. However, many of us are reticent with parting with that cash – especially when it’s for investments, due to the problems the previous generation faced.

Many of us are already making future financial plans that typically involve pensions, house deposits, 401ks and the like. However, you could be making a good bit of extra money from investing and it doesn’t cost that much to get into. Here are some quick and cheap ways to start building up investments and small investment ideas for students.

Small Investment Ideas for Students

Here are 4 quick and small investment ideas for students those that have less than $500 to invest.

1. Pick Index Funds

Index funds are a type of mutual fund that have portfolios constructed to match or track components of a financial index fund. These types of funds provide broad market exposure and are considered safe investments.


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Don’t know where to start with index funds? All of the index funds below can be invested in, even if you have less than $500.

Best S&P 500 Index Funds for 2021

  • FUSEX: The Fidelity Spartan 500 Index Fund (Expense Ratio: 0.015% | Minimum investment: $0)
  • SWPPX: The Schwab S&P 500 Index Fund (Expense Ratio: 0.02% | Minimum investment: $0)

Best Total Market-Based Index Funds for 2021

  • SWTSX: The Schwab Total Stock Market Index Fund (Expense Ratio: 0.03% | Minimum investment: $0)

Strongest Aggressive Level Index Funds for 2021

  • FNCMX: The Fidelity NASDAQ Composite Index Fund (Expense Ratio: 0.3% | Minimum investment: $0)

Mutual funds or index funds are a great choice because instead of owning just one stock you can diversify and might own a few hundred — and it is a great approach for investing long term.

2. Invest in Private Real Estate Deals with Only $500

Wouldn’t it be great if you could invest in commercial real estate and apartments without dealing with all the hassle of buying, improving, and re-selling real estate?

You don’t have to be a millionaire to invest in these types of properties. You can now invest in large-scale real estate for as little as $500 with Fundrise.

fundrise

Through their real estate investment products, investors earned an average of 8 – 11 percent on their money last year, and all without painting a wall or dealing with unruly tenants.

There is a reason why they currently have over 200,000+ users, this app really pays you!

If you’re interested, I recommend you sign up for more information from Fundrise by clicking here.

DescriptionApp
Fundrise

With Fundrise, you can invest your money in a portfolio filled with real estate investments with only $500.
  • Minimum Investment: $500
  • Fees: 0.85% asset management fee per year
START INVESTING
fundrise

3. Consider Micro Investing Apps

There are micro investing apps available that offer the facility to ‘round-up’ your purchases – that is, save the remaining few cents to make up a dollar on your card purchases – and invest them for you.

Taking little to no commissions and acting as a type of fund manager, these investing apps allow you to customize the level of risk you want to engage with.

Essentially an investment piggy bank, they provide a way to literally turn your pocket shrapnel into sustainable investments, little by little.

One of the most popular apps that do this round up is Acorns (they are also offering a $5 sign up bonus here).

Acorns fees are $1 per month for all accounts with a balance under $5,000 and .25% of the balance per year on accounts over $5,000. Compared to traditional management, mutual funds, and DIY ETFs, this fee is incredibly low.

Tip: If you’re a student or alumni that still has access to your universities .edu email address, you can sign up for the app using your .edu email address and use the app for free without any monthly fees.

If you are interested in investing your spare change, I recommend you learn more from Acorns here.

4. Invest in Individual Stocks

It’s a common misconception that when people hear about investing they believe that they need “a ton of money” in order to invest when actually the opposite is true.

You don’t need millions of dollars or even tens of thousands of dollars in order to begin investing in individual stocks like Apple or Microsoft.

The best time to start investing is when you are just starting out with modest savings. The reason for this is the magic of compound interest.

Compound interest is when you earn money on a deposit (a percentage that varies depending on the type of account), and then you earn more interest on that interest from the initial deposit, and then this process keeps continuing for 10, 20 or 30 years until your money has greatly increased in value! 

Example of compound interest: You invest $1,000 as an initial deposit into an account that pays a 6% interest rate (slightly lower than the average of the stock market), and then you deposit $300/month (About 10% of $50k/year salary). After 10 years you would have $50k, then $141k after 20 years and $307k after 30 years.

And this is even without increasing your savings relative to your rising salary!

The best part is that you can start doing this right now by using investing apps that allow you to invest in individual stocks:

App RatingCommissions
robinhood logo

5.0/5 

Free$0

OPEN ACCOUNT
On Robinhood's website

M1 finance

5.0/5

Free$100

OPEN ACCOUNT
On M1 Finance's website

fundrise

5.0/5

0.15%$500

OPEN ACCOUNT
On Fundrise's website

public

5.0/5

Free$0

OPEN ACCOUNT
On Public's website

webull logo

4.9/5

Free$0

OPEN ACCOUNT
On Webull's website

5. P2P Lending

Peer to peer (P2P) lending is part of a new wave of holistic banking and finance trends that emphasizes fair lending based on a community of creditors creating a fund from which the lenders can make money, with the interest paid to go into the pocket of the peer to peer lenders.

This is a fairly low-risk venture given the protections offered by the financial conduct regulators and can be bought into, in many ethical and sustainable P2P companies, with low rates of the initial investment. To boot, you can feel like you’re doing something good by offering an ethical and holistic approach to lending, as opposed to the predatory nature of some banks and small businesses.

6. Precious Metals and Commodities

The benefit of investing in metals such as gold and silver is that you can secure your assets in a relatively future-proof manner. The price of gold and silver stays constant, and institutions like the Federal Reserve are anchored to that gold.

Essentially, if your currency were to crash, you’d have something that’s worth something and will probably go up in price.

7. Start a Business

Did you know that you can actually start a business with no money? The thing is, you don’t always need a rich uncle or to have a bank account filled with cash to start a business. It just might be that you lack creativity — because there are creative ways that you can finance your business. If you already have a business idea — then you have already gotten through the most challenging part.

If you are still worried about how you can start a business with literally zero funds, here are a few ideas to help start a business with no money.

Conclusion

Investment can sound scary given how the previous generation lost a good chunk of it.

However, millennials and students are saving better than ever before and have the income to get involved.

If you want to try and build a nest egg, but don’t want to shed all of your cash, consider these low-risk small investment ideas for students.

Where to invest $500 right now
Descriptiongo
fundrise
Fundrise is a very easy-to-use app that allows individuals to access crowd-funded real estate investing. This option is best for users who want to make money consistently and let their money make them money.

GET STARTED
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Want to know which stock to buy next? Check out The Motley Fool advisor program and you can get recommended stock picks before the next market close.

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the motley fool
SoFi Automated Investing's range of low-cost ETFs and free management make it an attractive option for cost-conscious investors.

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About the author

Brian Meiggs
Brian Meiggs is a personal finance expert, and the founder of My Millennial Guide, a personal finance site helping you put more money in your pocket. He helps millennials follow the smart money in order to increase their earning potential and start building wealth for the the future. He regularly writes about side hustles, investing, and general personal finance topics aimed to help anyone earn more, pay off debt, and reach financial freedom. He has been quoted as a top personal finance blogger in major publications including Yahoo! Finance, NASDAQ, Discover, MSN Money and more.

1 COMMENT

  1. Thanks for making this post. I am not a fan of precious metal commodities but I am a big fan of peer to peer lending.

    I think it’s important for someone to do their research on how notes work in p2p before investing. There is a lot of information out there about different strategies for investing in p2p so find one and invest a little money and enjoy the journey.

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