You can start investing even if you only have $500. And you don’t have to look at penny stocks. Most of the time, investors don’t have to buy a certain type of stock based on how much money they have. A $500 investment is the same, no matter how many shares you purchase or how high the share price.
For example, if you were to invest in a hypothetical ABC Corporation at $0. 10 a share, you could buy 5,000 shares for $500. Or you could buy five shares of Walt Disney (DIS) trading around $100 on the New York Stock Exchange (NYSE). Although there are fewer shares in the second case, the total value of the investment is the same.
The best online brokers and best brokers for penny stocks offer tools to help investors start trading, but it is very important to understand that penny stocks are generally the highest-risk stocks in the market. They may seem attractive since a rise from $0. 10 to $0. 15 represents a 50% increase, but penny stocks also have a high chance of generating large losses. We will talk about some lower-risk ways to invest that will give you better chances to make money while you learn the ins and outs of investing.
Looking to make your money work harder? I get it – we’ve all been there You’ve got $500 sitting around and you’re thinking, “How can I invest 500 dollars for a quick return?” While there’s no magic formula for overnight wealth, there are definitely some smart strategies that can help your money grow faster than just letting it collect dust in a regular savings account
I’ve done the research and compiled some realistic options that could potentially double your money – though remember, higher returns usually come with higher risk. Let’s dive into these investment strategies that might help you turn that $500 into something more substantial!
The Reality of Quick Returns
Before we jump in, let’s be real for a second. When we talk about “quick” returns we’re not talking about get-rich-quick schemes that’ll make you a millionaire by next week. Those are usually scams! Instead we’re looking at legitimate investments that might grow your money faster than traditional methods.
The returns on most investments are slow at first, taking years or even decades to really grow. But besides just hiding your cash under your mattress, there are some other things that might get things done faster.
13 Ways to Invest $500 for Potentially Quick Returns
1. Explore Alternative Investment Strategies
One of the secrets that wealthy investors know is that alternative investments can sometimes provide faster returns than traditional options. Platforms like Fundrise let you invest in real estate with as little as $10, and they even give you a $10 bonus when you join!
Why consider alternatives?
- They often move independently from stock markets
- Many have historically outperformed traditional stocks and bonds
- They can generate passive income while you sleep
Crowdfunding for real estate through sites like Fundrise and Arrived Homes has become very popular lately because it lets regular people like us get into the real estate market without having to spend tens of thousands of dollars.
2. Exchange-Traded Funds (ETFs)
If someone has $500 to invest, one of my top suggestions is to buy an ETF. Basically, they are groups of securities that trade like stocks but give you instant diversification.
With commission-free ETFs available at most brokers now, you can spread your $500 across different industries without paying a bunch of trading fees. This is especially smart if you’re new to investing – you get professional management without the high costs.
3. High-Yield Savings Accounts (HYSAs)
Ok, this might not sound exciting, but hear me out! High-yield savings accounts are currently offering rates around 4% or higher (as of 2025). That’s 20-25 times more than a regular savings account!
The beauty of HYSAs is that your money stays liquid – meaning you can get to it whenever you need it – while still earning decent interest. This is a great option if you might need your cash in the next year or so.
Some top options include:
- SoFi Checking & Savings (up to 3.80% APY)
- Axos One® Savings (up to 4.51% APY)
- CIT Platinum Savings (up to 3.85% APY)
4. Robo-Advisor Accounts
If you’re not super confident about making investment decisions yourself, robo-advisors are a game-changer. These AI-driven platforms build and manage a portfolio for you based on your goals and risk tolerance.
Most robo-advisors don’t require a minimum investment or have very low ones. This means that your $500 investment will work perfectly with them. They take care of all the boring stuff, like rebalancing and reinvesting dividends.
5. Individual Stocks
If you’re feeling a bit more adventurous, buying individual stocks could potentially give you the quickest returns – though it also comes with the highest risk.
With fractional shares now available at many brokers, you can actually buy pieces of expensive stocks like Apple or Amazon instead of having to shell out hundreds or thousands for a single share. This means your $500 could be spread across 10-20 different companies if you wanted.
Just remember – picking individual stocks requires research and a strong stomach for market fluctuations. Don’t put all your eggs in one basket!
6. Cryptocurrencies
Crypto has definitely been a wild ride over the past few years! While extremely volatile, cryptocurrencies like Bitcoin and Ethereum have produced some incredible returns for early investors.
You could put a small portion of your $500 into crypto as a higher-risk investment. Platforms like Coinbase make it easy to buy fractional amounts of popular cryptocurrencies.
I personally think crypto should only be a small piece of your investment strategy – maybe 5-10% at most – due to its extreme volatility. But for quick potential returns, it’s definitely worth considering.
7. Real Estate Investment Trusts (REITs)
REITs are companies that own and operate income-producing real estate across various sectors. They’re required by law to distribute 90% of their taxable income to shareholders as dividends, which often means higher dividend yields than regular stocks.
With $500, you can buy shares in publicly-traded REITs through any brokerage account. This gives you exposure to real estate markets without having to buy property yourself.
8. Pay Off High-Interest Debt
This might sound counterintuitive, but using your $500 to pay off high-interest debt (like credit card balances) could be the fastest “return” on your money. Think about it – if you’re paying 18% interest on credit card debt, paying it off is equivalent to earning an 18% return!
That’s way higher than what most investments can realistically offer in the short term. Sometimes the best investment is eliminating a financial drain!
9. Peer-to-Peer Lending
P2P lending connects borrowers directly with lenders (that’s you!) through online platforms, cutting out traditional banks. This means both parties can often get better rates.
With $500, you could fund several small loans to different borrowers, spreading out your risk. Returns typically range from 5-9% annually, which isn’t bad at all for a shorter-term investment.
10. Start a 529 College Savings Plan
If you’ve got kids (or plan to), a 529 plan might not give YOU quick returns, but it can definitely grow your money tax-free for education expenses. Many states also offer tax deductions for contributions.
The power of compound interest means starting early with even $500 can grow significantly by the time college rolls around. Plus, unlike some other investment options, this one won’t affect financial aid eligibility.
11. Launch a Small Side Business
One of my favorite ways to potentially multiply $500 quickly is by starting a small side hustle or business. This could be anything from selling products online to offering a service based on your skills.
For example, you could use the $500 to:
- Buy inventory to resell
- Create a simple website for your services
- Run targeted social media ads
- Purchase equipment for a service-based business
The return potential here is literally unlimited, though it does require effort on your part!
12. Invest in Yourself with Online Courses
Sometimes the fastest way to grow your money is to invest in your own skills and knowledge. With $500, you could take courses on platforms like LinkedIn Learning or Coursera that could potentially lead to higher-paying job opportunities.
Learning high-demand skills like coding, digital marketing, or financial analysis could literally increase your income potential by thousands of dollars annually – that’s a pretty good ROI!
13. Fund an IRA for Long-Term Growth
While not exactly “quick,” opening an Individual Retirement Account (IRA) and investing your $500 there could lead to substantial returns over time through the power of compound interest and tax advantages.
Both traditional and Roth IRAs offer significant tax benefits that help your money grow faster than it would in a regular investment account. And starting early – even with just $500 – can make a huge difference over time.
The Bottom Line: Balancing Speed and Risk
When looking for quick returns, it’s important to remember that faster growth almost always comes with higher risk. The investments that could potentially double your money quickly are also the ones where you could lose a significant portion of your investment.
My personal recommendation? Consider splitting your $500 across a few different options based on your risk tolerance and timeline:
- Maybe put $200 in a high-yield savings account for safety
- $200 in ETFs for growth with reasonable risk
- $100 in a higher-risk option like individual stocks or crypto
This way, you’re positioning yourself for potentially quick returns while still protecting some of your capital.
Remember, the best investment strategy isn’t about getting rich overnight – it’s about consistent growth over time. Even $500 invested wisely now can grow into something substantial with patience and regular contributions.
What’s your favorite way to invest smaller amounts of money? Have you had success with any of these methods? I’d love to hear your experiences in the comments below!
Why Are Penny Stocks Volatile?
Penny stocks are usually small company shares that trade for less than $5. They usually trade on over-the-counter (OTC) markets instead of on big exchanges like the NYSE or Nasdaq. The name of these stocks comes from the fact that their share prices are so historically low—sometimes they trade for pennies—which can make them look good to small investors with little money. However, this perceived accessibility often masks their inherent risks and speculative nature.
Unlike bigger companies with tried-and-true business models, penny stock companies are usually made up of startups, early-stage businesses, or failing companies that are trying to get back on their feet. Many of these companies may operate in emerging industries or unproven markets, adding another layer of uncertainty to their already volatile nature.
The combination of their small size and questionable financial status means these companies are particularly vulnerable to volatility, economic downturns, or even rumors that might have minimal impact on larger, more established corporations. The major risks to penny stocks are:
- Not much is known about over-the-counter (OTC) markets because they don’t have to follow the same strict listing or disclosure rules as major exchanges. Because of this, there isn’t a lot of public information about many penny stock companies, which makes it hard to do proper research on their financial health and business operations.
- Low liquidity: These stocks don’t trade very often, so it might be hard to sell your shares when you want to. This lack of liquidity and shallow market depth can cause big price changes based on trades that aren’t very big.
- Wide bid-ask spreads: In the same way, penny stocks can have wide bid-ask spreads. The difference between the asking price and the selling price can be quite big, which means you need a big price rise just to get your money back.
- Lack of history: Many penny stock companies are new or struggling businesses that don’t have a history of success. This makes it very hard to predict how they will do in the future.
- Manipulation risk: Because penny stocks are cheap and aren’t regulated very much, they are more likely to be affected by schemes like “pump and dump,” in which scammers raise the price of shares before selling them, leaving other investors with losses.
Alternatives to Penny Stocks
If you are a new investor, you may want to consider blue-chip companies—such as Apple (AAPL) or Walmart (WMT)—which tend to have long-established track records of operations and trade on exchanges that are closely regulated by the Securities and Exchange Commission (SEC). These characteristics are not found in the over-the-counter markets where many penny stocks are traded. Although, even if you invest in the big players, trading stocks still involves some level of risk.
With fractional share investing now available through many brokers and with zero commissions on stock trades, you can start investing in blue-chip stocks with as little as $1 to $5, making your $500 enough to build a small portfolio of several major companies.
Turn $500 into Wealth: A Beginner’s Guide to Smart Investing
FAQ
What is the best investment for $500?
This could include stocks, bonds or alternative investments, among others. Exchange-Traded Funds (ETFs) . High-Yield Savings Account. Certificate of Deposit (CD)Taxable Brokerage Account. Workplace Retirement Account. IRA or Roth IRA. FDIC-Insurance Bank Account. 529 Plan or Health Savings Account (HSA).
How to double $500 dollars?
Below are five possible ways to double your money, ranging from the low-risk to the highly speculative. Get a 401(k) match. Talk about the easiest money you’ve ever made! . Invest in an S&P 500 index fund. Explore buying a home. Look into trading cryptocurrency. Consider trading options.
What is the best investment for a quick return?
Best short-term investment optionsHigh-yield savings account. Cash management account. Brokerage cash sweeps. Bank certificates of deposit. Bond funds or Treasury accounts.
What is the 10 5 3 rule?
The 10-5-3 rule is a guideline for setting realistic long-term investment return expectations: 10% annual return for equities (stocks), 5% for debt (bonds), and 3% for cash (savings accounts).
How to invest with $500?
If you’re looking to go with a straightforward investing route with $500, look into trying out peer-to-peer lending. This eliminates the middleman of a financial institution. Connecting lenders with investors at the source, is a place you can get personal about money, stocks, and investments.
Why should you invest 500 dollars a year?
When you invest 500 dollars, you start putting your money to good use, and it paves the way to future investment opportunities. Once you start earning more money and get more established financially, you can start to diversify your investments. Stocks, bonds, and real estate are excellent ways to invest your money and build real wealth.
Can you get rich quick with $500?
“Get rich quick” stories may be popular on the internet, but they’re far from common. Remember that it takes time to turn $500 or more into real money, so you need to be ready to wait. Invest without considering your long-term goals. Make sure you know for sure what you’re trying to accomplish with your initial $500 before you dive in.
How do I start investing $500 a year?
Our partners cannot pay us to guarantee favorable reviews of their products or services. Here is a list of our partners. You can put away $500 by choosing an investment account, deciding if you need help, and spreading your money out with ETFs. In general, you should plan to stay invested for at least five years.
How to invest 500 dollars for retirement?
Another great way to invest 500 dollars for retirement is to set up and contribute to a traditional IRA or a Roth IRA through a brokerage and automate your transfers. 2. Buy a certificate of deposit Need a safe place to keep your emergency fund or saving for a short-term goal? A certificate of deposit, aka CDs, is a safe way to invest 500 dollars.
Can I invest in stocks with just $500?
Absolutely! With just $500, you can venture into the world of stock investing. Micro-investing apps let you buy single stocks or choose an exchange-traded fund (ETF) that tracks a certain index.