I have a small amount of money saved, how should I invest it wisely?

Alright, I have been saving gradually over the last few years and now have a small sum I am willing to invest. The only problem is that I do not know how I should go about investing...

I have no experience in investing, and am not sure if I would even be able to use this amount. I have around $1,500 and want a safe way to invest my money.

Any help would be appreciated greatly

Martha,

Well, welcome to the world of investing! I would definately do your research before you commit to any one option.

With a smaller amount to invest you have to work carefully with something like the stock market for example. Much of your investment can be spent on the cost of a trade. Say for example you find an online site to help you buy stocks, say for $12.95 a trade.
Well, if you only put $100 into that specific share we are talking about a 12.95% of your investment!!!
So you have to be careful.

There is an article titled "Invest with only $1000". It's on a blog I frequent.

The link to the article is http://www.finance-your-life.com/?p=23

Take a look, it has some good information.

Happy Thursday!

Dave

I say keep it in savings. Let it earn interest and keep adding to it until you've got a ton of money to invest, then you could consider more than one option of investment.

The very best investment right now is investing money in Real Estate. The market is down and it is a buyers market. There are even no money down deals and very low interest deals.
Buy a cheap home in a good neighborhood and then rent it out to cover the payments.
Do your homework first in your area:

1. find out what the size home you are buying will rent for.
2. are places renting in your town or is it full of rentals
3. can you cover the taxes and expenses for the home
4. are you in an area that is desirable (Seattle, Austin etc)
5. can you afford to keep property for 3-5 yrs for market to go up.

Investing in Real Estate is smart and the fastest way to earn a bundle. Nothing beats it.

The next choice would be America Funds. Find out about these investment oportunities.

I think the easiest and safest way of investing smaller sums of money is through a Certificate of Deposit (CD). Almost all banks offer them and you can invest as little or as much money as you want. You can also choose from various terms (the period of time your money will be invested) and interest rates. I suggest looking at your bank's website which should have a chart listing their interest rates and terms available. But whatever you do, do your research before committing yourself and your money to anything! Interest rates are extremely competitive, so make sure you're getting the best one available!

Okay, here's your guideline.


$1,000 -- $5,000: Cash investments (CD's, money market accounts, & savings bonds)

$5,000 -- $100,000: Index mutual funds (Vanguard, Fidelity)

$100,000 -- $500,000: Mix of assets, including some individual stocks aimed at teaching yourself investing 101

$500,000+ Diversified portfolio of individual stocks if an investor or DFA funds if you don't want to do the work yourself

From the sounds of it, you have a bit more saving to do, before you start investing.

:-)