Small-Scale Investment Ideas

Starting next month, I will be receiving a significant increase in salary. I plan to still live within my means (same house, same truck, etc.), with only modest lifestyle changes. I have a few things I need to do with the extra money for the first year or so (pay off my boat, fatten up my savings, etc.), but after that, I’d like to potentially invest in something that could yield a decent return... something significant enough to make it worth the investment. After looking at the numbers, I’d say I would be willing to carve out about $500 from the added income per month.

Does anyone have any ideas for a $500 a month investment that might make me some extra income? I’m totally new to this and have no knowledge of investing or entrepreneurship, so any help is appreciated. Just looking for ideas. If nothing seems feasible, I’ll just put it in savings. Or maybe I can finally send money to that guy stranded in Nigeria who keeps emailing everyone...

 

Pay off assets that are churning out interest payments as fast as you can, things you own and currently paying off. You already got some cash for a down payment? Buy property and rent it out. Grows the best and someone else is partly paying it off. I know you said small but that’ll be a huge nest egg when done. Do that before you are lured into a white 2019 TRD Pro!

 

Rental property after you pay down or off anything you are paying high interest on.

 

Roth IRA .Mix of good growth mutual funds. Fidelity TIAA and Vanguard have the lowest feeds

 

The "Outbound Life Improvement Fund" is always a great investment.

 

Unless you plan on ‘fixing’ your rentals with your own sweat and blood and tears after they get trashed, then forget about it. I’ve seen 5 years off rental money wiped clean with one bad tenant.

Flip houses are hard to come by without having to put in almost as much to fix it as its worth.

Your best bet is to marry a rich sugar mama!

 

Wipe out all dept, maybe house excluded. Make sure you have a 3-6 month emergency fund, enough to pay Bills in something happened to job. Max out 401k, or at least take advantage of any company match.
Roth IRA .

 

Roth is a good idea but with a top limit of $5,500 per year. It's good because you invest already-taxed income (so when you're ready to use it, you can withdraw up to the entire amount you invested without paying (additional) tax (cause you'll have already paid it. Right now the stock market is high; I expect it won't stay that way though. As long as you're willing to invest for the long haul, you'll get your money back and make a mint. But if you can't stand huge losses in the short term, investing in the stock market is not for you-- because if you pull out the money at a loss, that loss is permanent.

IMO a better bet, if you're willing to invest in the stock market, is to see about pre-tax contributions through your employer. If your employer "matches" this can equate to getting an even bigger "raise" that you can't spend now but will pad your retirement. Great because it'll lower the amount of income tax you pay each year now... deferring it til the age you are when you withdraw in retirement (for many people, your tax bracket will be lower then). Drawbacks are: not knowing what will happen with IRS rules in the future; if you retire wealthy, you'll still pay a lot (again, everything could change); ALL (stock market) INVESTMENTS carry risk. If you choose this one, only put in what you could live through losing, i.e. you don't need it for expenses, including emergencies. As long as you never panic and pull it out, you'll likely get a lot of money down the road (I'm +33% over 15 years of investment, but there were many deep losses I left it alone to recover.)

Gold is a good hedge against stock market failures. Typically, when the investment markets get soft, prices of gold rise. Unfortuneatly, a lot of people know this, so it's kinda high now, people anticipating a coming crash. If you buy gold, get it in hand, not some investment that you won't have access to if things get rough.

I agree with the guys that suggested buying real-estate. If the area where you are doesn't have a lot of growth, try another. Recently, fortunes have been made in Nashville, I'm seeing prices take off in many parts of CO..., but paying for property management will be an expense to factour in, if you buy far away.

You're losing money keeping it in savings. After you've paid off everything you can, and saved enough to cover 6-12 months of emergency, definitely leap into something!

 

The best guaranteed way to double your money is to fold it up, and put it in your pocket...

Old Chinese Proverb

 

This is a very difficult time to invest... IN MY OPINION (which is free and useless) we have over-priced stocks, over priced real estate, piss poor bank investments CD's etc, higher inflation aka weaker dollar, and fewer opportunities for our younger population. I own Realestate and rentals, but I do all my own work. Metals are dropping and pretty reasonable as far as silver and gold. Remember these are not get rich quick investments, they are simply place holders that fight inflation. I bought my rentals and Realestate after the crash and rebuilt it. I thought about selling some but I have no where to re-invest. The stock market is an option, but there are professional thieves there and I have little to no control over the outcome. I don't like a piece of paper that says I have money. They can send a different piece of paper that says the money is gone. The advice given is solid on here. Destroy all debt and then accumulate assets. Read the book Rich Dad, Poor Dad. It might give you some good perspective.

 

Get off tundras.com and u will save another $5,000 a year.

Now, your investment of $500 a month which equates to $6,000 a year just generated $5,000 at the end of the year.

Don't laugh, Send me 2% of $5,000 thru paypal next year once you realize I put u in the right direction.

 

Rentals are really on good if you are handy and do your own repairs... If you pay management fees, handy man, and contractors to do repairs and upgrades and carry mortgage on said property, you are essentially working for everyone else. I have 6 and do well, but it is my job. I'm remodeling #7 right now.

 

1) If you have an employer-matched 401k, max it out. For example, my employer matches up to 5% of whatever I put in my 401k so I put in the full 5% each paycheck.
2) Pay off debt, starting with the highest interest rate.
3) Once #2 is done, find a high-interest account that will let you remain liquid (meaning you can take your cash out immediately if needed for emergency) and fund it so that you have 3-6 months of emergency funds built up.
4) Once #3 is done you can start looking into retirement. Setting up a Roth IRA or some other tax-deferred instrument is a good place to start looking. There are limits to how much you can contribute annually. This is a whole other topic TBH so you're going to have to do some research on this one.
5) If you still have a bunch of money left over after all that is done, I'd buy silver and gold. I buy some nearly every month from apmex.com. But that's just my preference. If yours is to do business investments then find something you like doing and have at it. Buying land is a very worthwhile endeavor as well. If I had more money that's probably what I'd be doing.

 

I'm flattered you asked, but I'd refer you instead to the esteemed members of these organizations:

https://lamborghiniclubamerica.com/

http://www.ferrariownersclub.org/index.php

https://www.pca.org/

 

Wow. So much feedback. Thanks everyone. Yes, priority one is wiping out debt, which isn’t too bad. I can pay off most debt in a year or less (boat, credit cards, etc.) with the exception of my house. That’s phase one of my plan. 12 months from now I should have the debt taken care of, then I’ll work on the one of these ideas you guys suggested. Gonna scroll back up to the top - I’ve got some reading to do! Thanks again everyone. This is all new to me, so I’m looking forward to making some good decisions for the future.

 

All good advice in this thread, but I'd second the recommendation from @NewImprovedRon, especially if you have no interest or capability to manage investment properties, like me. The last decade or so have, in my view grossly overstated the expected return on real estate.

https://www.investopedia.com/articles/basics/09/real-estate-versus-stock-investments.asp

$13 The Housing Trap: How Buyers Are Captured And Abused And How To Defend Yourself

https://www.amazon.com/Housing-Trap-Buyers-Captured-Yourself/dp/1479156213/

For smaller scale investments (i.e. $500/month), look into services like Robinhood, Wealthfront or self-manage an account with Vanguard or Ameritrade

 

[QUOTE="ninjajay, post: 713728, member: 11787]

... For smaller scale investments (i.e. $500/month), look into services like Robinhood, Wealthfront or self-manage an account with Vanguard or Ameritrade[/QUOTE]
Yep, Wealthfront and Betterment and the like (that have automatic management and redistribution) have super low fees compared with human-managed funds. And the same or better returns on investment.