How to Invest $50 (And Make It Grow)
So, you have $50 burning a hole in your pocket, and you’re wondering how to make the most of it. Good news: You don’t need thousands of dollars to start investing and watching your money grow. With just $50, you can make smart choices that can set you on the path to bigger financial gains down the road. In this article, we’ll break down some of the best options for making that $50 work for you—whether you’re a beginner or an experienced investor.
Why Investing $50 is a Smart First Step
You might be thinking, “What can $50 really do for me?” Well, it’s not about how much you start with—it’s about getting started and understanding the power of compound growth. Even a small amount invested wisely can grow into something significant over time. The key is consistency and smart choices. With $50, you have plenty of opportunities to dip your toes into the world of investing without risking too much.
Let’s break it down into practical options:
1. Stock Market: Fractional Shares for the Win
One of the easiest ways to start investing with just $50 is by buying fractional shares of stocks. Thanks to platforms like Robinhood, Fidelity, or Charles Schwab, you can now buy fractions of expensive stocks—think Amazon, Tesla, or Apple—without needing to shell out hundreds or thousands of dollars.
How It Works:
Fractional shares allow you to invest as little as $1 in high-value stocks. For example, if Tesla’s stock is $700 per share, you could invest just $50 and own a fraction of that share. Over time, as the value of the stock increases (or decreases), your investment grows or shrinks.
Why It’s Great:
Investing in fractional shares gives you access to big companies that would otherwise be out of reach. Plus, with long-term growth, these small investments can add up. If you invest in a well-performing stock, your $50 might grow significantly over several years. Just make sure to research the companies you’re investing in.
Tip: Start with index funds or ETFs (exchange-traded funds) for diversification and less risk. They bundle several stocks together, so your risk is spread out over multiple companies.
2. Peer-to-Peer Lending: Earn Interest with Small Loans
If you’re interested in something a little more hands-on, consider peer-to-peer lending platforms like LendingClub or Prosper. These platforms allow you to lend money directly to individuals or businesses in exchange for a return on your investment.
How It Works:
With just $50, you can pool your funds with other investors to lend to borrowers. In return, you’ll earn interest on the money they repay. Rates can vary, but depending on the loan, you could see returns of 5-10% or more.
Why It’s Great:
Peer-to-peer lending offers a way to earn passive income by lending small amounts to borrowers. The downside? Some risk is involved since not everyone will pay back their loans. However, these platforms often let you spread your investment across multiple loans to minimize your risk.
Tip: Look for secured loans or loans with a good track record to reduce your risk of default.
3. Robo-Advisors: Hands-Off Investing
If you’d prefer to let someone else make the investment decisions for you, consider using a robo-advisor like Betterment or Wealthfront. Robo-advisors use algorithms to automatically manage your investments based on your goals and risk tolerance.
How It Works:
You deposit your $50, answer a few questions about your investment goals (retirement, buying a house, etc.), and the robo-advisor does the rest. It will choose a mix of stocks and bonds to help grow your money over time. You can usually start with as little as $5.
Why It’s Great:
Robo-advisors are perfect for beginners because they take the guesswork out of investing. You don’t need to be an expert in stocks or bonds to get started. Plus, they typically charge low fees, which is a huge bonus for small investments.
Tip: Set it and forget it—once your $50 is invested, you can leave it to grow over time. Regularly contribute more as you’re able to build your investment.
4. Cryptocurrency: Risk and Reward
While crypto can be a high-risk, high-reward option, it’s possible to get started with just $50. If you’re feeling adventurous and want to experiment with something that could potentially yield high returns (or losses), investing in cryptocurrency might be for you. Popular platforms like Coinbase and Binance let you start investing with small amounts in digital currencies like Bitcoin, Ethereum, and Litecoin.
How It Works:
You can buy fractions of a cryptocurrency with as little as $1 on these platforms. So, with $50, you could own a portion of Bitcoin, which is currently worth over $30,000 per coin. The value of cryptocurrencies can swing wildly, so be prepared for volatility.
Why It’s Great:
The potential for quick gains (or losses) makes crypto appealing to risk-tolerant investors. If you’re willing to take on some risk, small investments in crypto could yield big returns over time. But remember—investing in crypto is speculative, so only invest what you can afford to lose.
Tip: Stick to well-established coins (like Bitcoin and Ethereum) and avoid chasing the latest altcoins, which can be more volatile and speculative.
5. High-Yield Savings Accounts: Low Risk, Steady Growth
If you want a virtually risk-free way to grow your money, a high-yield savings account (HYSA) is a great option. While the returns won’t be as high as stocks or crypto, you’re guaranteed to earn interest without any risk of losing your principal.
How It Works:
Put your $50 into an account like those offered by Ally Bank or Marcus by Goldman Sachs, and earn interest over time. Most HYSAs offer annual interest rates between 1% and 3%. While it’s not much, it’s still better than the near-zero rates offered by traditional savings accounts.
Why It’s Great:
It’s safe, it’s easy, and your money grows steadily over time. If you’re not ready to take on the risk of stocks or crypto, this is a great option to help you build up a small emergency fund or save for short-term goals.
Tip: Look for a savings account with no monthly fees and a competitive interest rate.
Conclusion: Your $50 Can Grow—But the Key Is to Get Started
When it comes to growing your wealth, the most important thing is to take action. Whether you choose to invest in stocks, lend money, use a robo-advisor, or dive into crypto, $50 is enough to start learning the ropes and build a foundation for long-term growth. The more you invest, the more your understanding and strategy will improve—and that’s where the magic happens.
Remember, there’s no one-size-fits-all approach. Each option comes with its own set of risks and rewards, so choose one (or a few) that align with your goals, risk tolerance, and interests. As your financial knowledge grows, so will your ability to make smarter investment decisions. So, go ahead—start with your $50 and watch how it can grow!