Investing doesn't require a hefty sum of money to get started. Even with a small amount of capital, like $1500, you can make investments that grow your wealth over time. This article highlights various investment options you can consider with $1500 or less, helping you put your money to work and achieve your financial goals.
Investment Options
High-Yield Savings Account
A high-yield savings account is a low-risk option that offers a higher interest rate than traditional savings accounts. This allows you to earn some return on your money while maintaining easy access to your funds. While the returns may not be substantial, they can outpace inflation and help your money retain its purchasing power.
Before you invest:
- Research: Compare interest rates offered by different banks and online banks.
- Minimum balance requirements: Be aware of minimum balance requirements to avoid account fees.
Peer-to-Peer (P2P) Lending
Peer-to-peer lending platforms connect borrowers and lenders directly. As an investor, you can lend money to individuals or businesses and earn interest on your loans. This option offers potentially higher returns than traditional savings accounts, but it also comes with greater risk.
Before you invest:
- Platform selection: Opt for a reputable P2P lending platform that has a strong track record.
- Diversification: Mitigate risk by spreading, your investments across multiple borrowers.
- Understand the risks: Be aware of the possibility of loan defaults.
Robo-Advisors
Robo-advisors are automated investment platforms driven by algorithms to provide management services for investment portfolios. They typically require a lower minimum investment compared to traditional investment advisors, making them a good option for those starting with a smaller amount.
Before you invest:
- Investment strategy: Understand the asset allocation strategy of the Robo-advisor.
- Fees: Be aware of the fees associated with using a Robo-advisor.
Fractional Shares
Fractional shares allow you to invest in companies you believe in, even if their stock price is high. This enables you to purchase a portion of a share instead of a whole one. Fractional shares investing makes it possible to diversify your portfolio across various companies, even with a limited investment amount.
Before you invest:
- Trading platform: Choose a brokerage platform that offers fractional share investing.
- Commissions: Be aware of any commission fees associated with fractional share trades.
Microinvesting Apps
Microinvesting apps allow you to invest small amounts of money regularly, often through automatic transfers from your checking account. This approach, known as dollar-cost averaging, helps you build your investment portfolio over time and benefit from potential market fluctuations.
Before you invest:
- Investment options: Understand the investment options available on the microinvesting app.
- Fees: Be aware of any fees associated with using the microinvesting app.
Certificates of Deposit (CDs)
Certificates of deposit (CDs) are offered by banks and credit unions. You deposit a fixed amount of money for a specific term, typically ranging from a few months to several years. In return, you earn a guaranteed interest rate that is usually higher than what you would get with a savings account.
Before you invest:
- Interest rates: Compare interest rates offered by different banks and credit unions for CDs.
- Early withdrawal penalties: Understand the penalties associated with early withdrawal from a CD.
Important Considerations Before You Invest
- Investment Goals: Clearly define your investment goals, whether it's saving for retirement, a down payment on a house, or a short-term financial objective.
- Risk Tolerance: Assess your risk tolerance and choose investments that align with your comfort level.
- Investment Time Horizon: Consider how long you can invest your money before needing it.
- Diversification: Spread your investments across different asset classes to mitigate risk.
Additional Investment Tips
- Reinvest dividends: If your investments generate dividends, reinvest them to buy more shares or units, accelerating the growth of your portfolio through compounding.
- Review your portfolio regularly: Review your investment portfolio periodically so you can make sure it still aligns with your goals as well as your risk tolerance. You may also need to rebalance your portfolio when necessary.
Seek professional advice: If you're unsure about which investments are right for you, consult a qualified financial advisor.
A Word on Borrowing for Investments
While this article focuses on investing with existing funds, it's important to briefly address the concept of borrowing to invest. Generally, borrowing to invest is a higher-risk strategy and should be approached with extreme caution. However, under specific circumstances and with careful planning, it can be considered.
If you are considering borrowing funds for investments, it's crucial to understand the different types of loans available and their terms. In Canada, several options exist, including:
These loans can be used for various purposes, including investments, but you need to compare interest rates and terms from different lenders like those you can find through resources to secure the most favourable deal.
While readily accessible through services like,
same-day loans often come with higher interest rates and shorter repayment terms. They can be suitable for very short-term, high-confidence investment opportunities.
Installment loans offer structured repayment plans with fixed monthly payments. This can provide predictability when budgeting for investment repayments, but again, you need to carefully evaluate the interest rate and ensure the potential investment returns outweigh the borrowing costs.
