23 Smart Ways to Invest Your Money, No Matter How Little You Have

You don’t need a ton of cash to make some shrewd financial decisions for your future.  

by John Mihaly
A lot of white piggy banks on a green background

It can seem that any type of “investing” requires a large sum of money. This is a daunting prospect for most. But especially when your budget is more Golden Corral Buffet than financial golden boy Warren Buffett. You can, however, do a lot with a little. Investing small amounts of money can reap rather large rewards — if you know where to look. That’s why we reached out to a variety of investment professionals and asked them a simply question: what are some of the best ways to invest $3,000?

While the response from experts was a near-unanimous: “That’s not a lot of money to invest,” all were able to come up with smart, interesting ways to invest money. The list below, which involves their suggestions as well as some of ours, ranges from the very sensible (pay down your credit card, add it to your 401k) to the surprising (ever try real-estate crowdfunding?) and even the strange (why not buy some whiskey or comic books that will appreciate in value?). Take a look and get the ideas rolling. Just remember: No investment is guaranteed but some, be they conservative or aggressive, are better than others. So what are you waiting for? That money isn’t going to invest itself.

Put it in the Hands of Robo-Advisors

“Robo-advisor websites do your investing for you. There’s no need to speak with an actual human, but they are there if you have any questions,” says David Bakke Personal Finance Expert at Money Crashers, who wholeheartedly suggested this modern option. All you need to provide, per Bakke, is some information about your risk tolerance, preferences for investing, and your long-term goals. Then the algorithms go to work and provide multiple portfolios that best reflect those investment goals. “It’s an inexpensive way to invest, as you’re charged right around 0.5 percent of your assets (on an annual basis), which is fairly competitive overall. Best of all, you can also usually get started without a hefty minimum opening deposit.” There are a lot of robo advisors out there but we think Betterment and Swell are two great options.

Buy Some Life Insurance

Life insurance is especially important if you have kids, have debt, or are the head of the household or a caregiver,” says Scott Goldberg, president of Bankers Life. “Think of it as a safety net for your family that can alleviate potential financial and emotional burdens that could come with the loss of life.” Life insurance policies can be used for short-term expenses such as funeral costs, or long-term expenses, like paying off your child’s student loans. Life insurance, per Goldberg, can also allow for a secured inheritance for your beneficiary and can give your family the ability to pay off debt, such as a mortgage or replace the loss of your income. “If you have loved ones in your life that depend on your income, now is usually the right time to consider purchasing a life insurance policy,” he says.

Invest in Some Very Nice Whisky

Whisky has a long history of appreciation, both by those who drink it and by those who invest in it. The time it takes to mature (at least ten years) plus its limited supply and growing demand are all elements for a solid long-term investment. Spending your three grand on a single 50-year-old bottle of whisky is, well, risky. However, private investors can now buy, sell, and trade maturing whisky at wholesale prices. Sites like WhiskyInvestDirect boast (but don’t guarantee) a 7-8 percent rate of return on your boozy investment.

Pay Off Credit Card Debt

No, it’s not as fun as buying whiskey or handing your cash to a robot. But, it’s a very smart move. “If you have a credit card balance that is accruing 22 percent interest each year, paying that off will produce a better ‘return’ than almost any other investment you can make,” says Jeff Proctor, finance and investment expert at Dollar Sprout, a personal finance blog for millennials. “Imagine digging a hole that gets 22 percent deeper each year. If you wanted to get out of that hole, the first step would be to stop digging the hole deeper, right?” Carrying a credit card balance, per Proctor, is the equivalent of non-stop digging; the only way to shift momentum in the other direction is to completely stop more debt from accumulating. “Any other ‘investments’ you make won’t necessarily help alleviate an underlying credit card debt problem, he says. “Even if you found a way to get a nice 10 percent return in the market, it won’t mean much if your credit card debt keeps growing at 22 percent.”

Add it to Your 401(k) or Employee Stock Matching

“Consider taking advantage of employer-offered programs like 401(k) match or employee stock purchase plan,” says Chase Lawson, author of Financial Freedom: Breaking the Chains to Independence and Creating Massive Wealth. “Perhaps you haven’t been contributing because you don’t have much left over after paying off your monthly bills. If your employer offers a match for 401(k) contributions, perhaps you contribute up to $250 a month for the next 12 months into the plan to build towards your future retirement. If your employer offers a 50 percent match, this will give you an extra $1,500 invested in your retirement over the course of the year.”

Look into Peer-To-Peer Lending

“Peer-to-peer lending provides funding for loans by individual investors rather than banks. Anyone can open an account through sites like LendingClub or Prosper with as little as $1,000 and begin investing,” says Cody Smith, Founder of Peer Loan Advisor. Putting as little as $25 into a loan, per Smith, allows investors to diversify their portfolio, which is key to reducing risk. “Since these are personal loans, there is no collateral. Investors can choose to limit their investments to borrowers with excellent credit, or take a more risky approach and select loans to borrowers with lower credit scores,” he says. “The biggest benefit is superior returns compared to many other fixed-income investments with limited risk. According to LendingClub, 98 percent of investors with a properly diversified portfolio earned money on their investment. The annual return over the past ten years for this type of investment is approximately 5 percent.”

Consider Some Comic Books

Being a nerd can payoff. “While everyone’s heard stories of people cleaning out an attic to find vintage comic books they sold at a hefty profit, it’s not just the older books that are valuable,” says Vincent Zurzolo, co-owner of Metropolis Collectible. “Even comic books from the last 20 years are becoming more collectible (Think the first appearances/issues of The Walking Dead, Deadpool, Miles Morales Spider-Man).” Some comic book values have jumped from just a few dollars five years ago to $50-$100 today. Right now, there is a great deal of speculation concerning potential TV and movie appearances of characters.” So as soon as you hear your new favorite comic has been optioned for a film or streaming series, it’s time to grab some mint-condition, #1 issues.

Use it For Airbnb Home Renovations

If you happen to live in an area with a reasonable amount of tourism, then spending some money on fixing up a spare room or living space for Airbnb rentals is an easy enough option. Not only will it add some value to your home (if you own) but renting can easily lead to years of steady side income. Just make sure your neighborhood is zoned first.

Go in on Some Real Estate Crowdfunding

“Investing in property the traditional way requires tens of thousands of dollars, while real estate crowdfunding allows you to become an investor even if you have very little cash,” says Daniela Andreevska, Marketing Director at Mashvisor. The process, per Andreevska, entails investing in properties along with other investors through an online platform which proposes deals, buys the properties, performs all the legal work, and manages the properties. “Since its emergence in 2012, real estate crowdfunding investments have been yielding an average return of 12-16 percent, which is often higher than what traditional investment properties offer.”

Buy Burial Plots

The only piece of land that three grand will actually score you is located six feet under and, honestly, you’re not going really enjoy the time you spend there. Like most property, burial plots will continue to become more expensive and harder to find. Buying now is a substantial investment for that one day you know is definitely coming. There’s even a market for burial plot flipping if you decide that cremation might be the better long-term investment.

Invest in Art and Photography

Supporting up-and-coming artists can be a rather low-risk investment. You can always buy their work on the cheap (because they need to eat now) and even if they don’t turn out to be the next Warhol, you still have something nice to hang on your wall. And if paintings aren’t to your preference, press photos (aka “work prints”) for magazines and newspapers are another emerging artistic investment with similar upsides.

Get Into Impact Investing

“There are two primary reasons that you might choose Impact Investing. One, you are conscious about how your money impacts the world, and two, you want to use your dollars to support social and environmental change,” says Dave Fanger, CEO of Swell Investing. “Impact investing is dedicated to creating portfolios that stand to grow as our planetary needs increase, and our high-potential, high-impact themes are focused on a positive future — clean water, green tech, renewable energy, disease eradication, healthy living, and zero waste.” The added advantages of investing with an impact-focused company, per Fanger, are that portfolio managers do the heavy lifting by identifying the companies that are both making an impact and are poised for growth and companies that take a values-based approach to their business tend to drive returns.”

Use it to Pad (or Begin) Your Emergency Fund

According to the Report on the Economic Well-Being of U.S. Households, four of 10 adults, if faced with an unexpected expense of $400, would not be able to cover it. That’s incredibly scary. Chances are, something unexpected and unfortunate is going to happen to you at some point. Grim, but true. Imagine your car breaking down preventing you from getting to work, in turn, costing you more money or your job, or having to make a life or death decision about a sick pet when faced with a huge bill from the vet. No one wants to think about these things happening but, they do, and boy do they suck. Think of an emergency fund as your “get out of financial and emotional jail free” card. Any money in there will be money you’re glad you have.

Find Some Future Throwback Jerseys

When your favorite player is unexpectedly dealt (Odell Beckham Jr.), demands a trade (Anthony Davis), or when your team unnecessarily rebrands (thanks, Jets!), local purveyors of sports merchandise are suddenly SOL with overstock. That means significant slashing to jersey prices, some often marked down to $20. It might take 10–20 years before reaching throwback/retro status, but original jerseys (with tags) will easily fetch a high price with collectors and the next generation of hypebeasts.

Establishing a Trust

Estate planning is going to rack up some legal fees but making sure that your wishes, both in life and death, are properly carried out, is undoubtedly worth the one-time investment. A trust, as we’ve explained, will do more and should cost less (in the long run) than a standard will. The former goes into effect immediately while the later can easily get tied up in probate court and additional costs. A trust gives you the ability to disperse your assets however you see fit, can protect family members from creditors (and themselves), and help keep down the cost on estate and income taxes as well as nursing home care.

Try Angel Investing

“You can now invest in privately held companies on platforms like WeFunder. This allows you to get a piece of a company like Uber or Lyft before it becomes a multi-billion dollar entity. It’s no longer just for the super wealthy,” says Ryan Vet, Entrepreneur and Angel Investor. “Plus, there are some interesting things that equity crowdfunding allows you to invest in, like home automation or the newest craft distillery. The JOBS Act has made it so you don’t have a to be a multi-millionaire (accredited investor) to get a piece of the action. Another huge perk is that you can pay up to $5,000 on a credit card and get rewards for your investment.”

Look into Exchange Traded Funds (ETFs)

“Even the savviest investment professionals have trouble putting together a portfolio of winning stock picks. With a few thousand dollars to start with, there’s not much margin for error if you invest in shares of a stock that does not perform well,” says Bill Davis, Certified Financial Planner at Ameriprise. “Rather than own a few shares of one company, a less risky and more diversified approach is to own fractions of shares in multiple companies.” This, per Davis, can be accomplished by investing in a mutual fund or an ETF (Exchange-Traded Funds). Compared to investing in individual stocks, an ETF offers the investor low-cost exposure to a wide variety of stocks and/or bonds representing different investment opportunities, companies, industries, countries, and geographic regions. “That means you’re not limited to the performance of any one particular stock,” he says.

Throw it in Your 529 Plan

Tossing some more money into the 529 plan you have for your child is always a good investment. “As long as the funds are used for higher education there are no taxes when you take them out,” says Nicole Middendorf, CEO of Prosperwell. “Most states also offer a tax deduction (up to a certain amount) if you contribute to the plan. 529s are also helpful with estate planning. If grandma wants to help her grandkids with higher education, she can contribute $15K for five years or a lump sum of $75K (the max gifting limits) up front. The accounts are flexible, meaning you can always change the beneficiary to another blood relative if you have a child that decides not to go to college. The great thing is there is no age restriction, so that means you could conceivably use it too if you decided to go back to school.”

Use it to Update Your Wardrobe

The upside of men’s fashion is that the classics never actually go out of style. But does your closet feature the ever-iconic, staples of a man’s wardrobe? We’re talking about a navy and a black (or gray) suit that’s been properly tailored, quality leather shoes and boots (the kind you bring to a cobbler to shine and repair), a belt that’s neither frayed or cracked with a reasonably sized buckle, and some long-sleeve, shirts with appropriate fitting collars. These are the pieces that you’ll never have to think twice about wearing and that will always make you look like a grown-ass man.

Put it Into a Roth IRA

“You can put up to $6,000 in an IRA in 2019 ($7,000 if you’re 50 or older) and with this $3,000 windfall, you’re halfway there,” says Arielle O’Shea, investing and retirement specialist for NerdWallet. “An IRA is a retirement account you open yourself, independent of your employer. A Roth IRA is generally a great choice if you’re eligible—you don’t get a tax break now for contributing, but the money grows tax-free. You can also pull out contributions to a Roth IRA at any time, so it can double as a little cash cushion/emergency fund (though you should treat it like you have to be hands-off until retirement if you can).”

Squat on a Web Domain

Let’s file this one under high risk, high reward. Ever play the “Does this website exist” game? You never know when your wacky idea might be someone’s actual idea for a business (Can you believe that is available?). It’s even better when a large corporation or lazy celebrity comes calling for that domain they’ve slept on. Then it’s time to cash in!

Put it in Your Health Savings Account

“HSAs are owned by individuals (not employers), so they can be transferred from job to job or institution to institution, similar to a 401k or IRA,” says Shobin Uralil, COO of Lively. “They are the only triple-tax advantaged account on the market, which means individuals and families can contribute pre-tax dollars, let earnings grow tax-free, and make tax-free withdrawals on qualified medical expenses. Given that the average couple is expected to need $285,000 for healthcare expenses in retirement (on top of Medicare) HSAs are truly an unmatched savings tool.”

Use Common Sense

Running into three grand might get your head spinning about all of the shiny, new, and overpriced things that you can buy. Unless it’s something that you’ve had your eye on and said, “You know, if I had some extra cash, I’d get me a brand new…” then pay some bills, fix something that’s broke that could end up costing you more money, or just put it into a savings account. Just don’t blow it and have nothing to show for it.