13 Best Ways to Invest $400 (and Double It!)

For many, last year was a difficult year not only mentally and physically, but also financially. Between layoffs and shutdowns, people across the country were finding themselves without a paycheck for an unknown period of time.

Now that we’ve turned a corner in 2023, the economy is slowly beginning to rebalance and personal finances are building back up. If you find yourself with surplus cash, you may want to consider investing some of the funds into your future.

While investing can be a scary deep end to jump into, it doesn’t mean you can’t start small. Even with $400, you can put it towards long-term investment strategies. Here are 13 of my latest strategies and avenues on how to invest a sum of money that will benefit you in the long run.

1. Discover Opportunities in Alternative Strategies

Investing $400? Then you should dig into alternative investments that everyone should know.

Alternative investments are any asset class that is not a traditional investment, such as stocks, bonds, or cash. This can include things like real estate, private equity, art, and more.

There are a few reasons why you might want to consider investing in alternatives. First, they can help you diversify your portfolio. By including assets that don’t move in tandem with the stock market, you can reduce your overall risk.

Second, alternative investments often have the potential to generate higher returns than traditional investments.

Finally, alternative investments can provide additional income in the form of dividends or interest payments. This can help you reach your financial goals sooner.

Some popular alternative investments include:

Vint: Vint is the ideal way for beginner investors to get their feet wet in alternative assets. You can invest in shares of fine wines from around the world starting with as little as $25, and there are no annual fees or accreditation requirements.

Masterworks: You own shares of Apple, Amazon, and Tesla. Why not Banksy or Andy Warhol? Their works’ value doesn’t rise and fall with the stock market. And they’re a lot cooler than Jeff Bezos.

2. Invest in Exchange Traded Funds (ETFs), Mutual Funds, or Index Funds

The stock market can be a financial goldmine if you have the knowledge and resources to make smart investments. Especially with $400, it can be the perfect amount to get you on the front foot.

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Exchange Traded Funds (ETFs) are one example of an investment that you can make strategically. An ETF is a basket of securities exchanged on the market, just like a stock.

Real-world examples include investing in bond ETFs and currency ETFs that constantly fluctuate. The beauty of investing in these is having access to many stocks across various industries as well as low expense ratios and fewer broker commissions.

The same goes for both mutual funds and index funds. Handled by a professional broker, putting a grand into these assets is typically the best “bang for your buck.” While a mutual fund aims to beat a given stock market index, an index fund seeks to match an index and grow from there.

While they might be different in strategy, they are both great options to research as you look into the market. Read more about ETFs, mutual, and index funds here.

3. Open a High-Yield Savings Account (HYSA)

Saving money is important at any stage of your life and investing your money into a savings account can be a smart move. Especially as the competition surrounding saving rates and online banking has heated up over the past few years.

A high-yield savings account in particular, which has become increasingly popular, is a type of account that pays 20-25x more savings and interest rates than a standard savings account. This means you can earn money on your sum by having it simply sit in your account and collect interest!

how to invest 1000 dollars

The reason many have turned to these types of accounts is the ease in making transfers between checking accounts and savings accounts. Institutions offering HYSAs are often a one-stop shop for many people in terms of having all accounts in one place.

The simplicity of e-transferring funds between is as effortless as the interest you are gaining in your account. If you choose to use $400 towards an HYSA, be sure to research requirements for accounts before you make a decision.

Some frequently asked questions are: Will that amount be enough to open one?, What is the minimum balance required for the account?, etc. These kinds of accounts can be the perfect investment as a rainy day savings account.

Some savings accounts that I would recommend are Aspiration, Axos Bank, CIT, and SoFi. You can see the latest APY’s in the table below:

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4. Open a Robo-Advisor Account

Financial technology (fintech) is a tool that every person investing their money should be keen to use. If you have $400 and you’re looking for a solution that can help you with an investment strategy, look into opening a robo-advisor account.

If you’re unfamiliar with these sorts of accounts, they are AI-driven, algorithmic-based digital platforms that provide financial advice, trends, and information that can help out investors.

best robo advisors

The best robo-advisors like Acorns can take care of many of the tedious tasks that you would normally work with a normal advisor on, such as account management, goal setting, and portfolio management.

Since these kinds of accounts require little to no fees and can provide a plethora of services, taking a chunk of your $400 sum and putting it toward this should be a no-brainer investment. If you’re looking for a low-risk and high-reward investment, this kind of account can do wonders for you as you navigate your financial journey throughout life.

5. Buy Individual Stocks

For the most simple kind of investment that has to do with the market, buying individual stocks is definitely the route to go. While this can be the riskiest investment since many decisions are made on your own, it can also be the best way to turn $400 into tens of thousands of dollars.

If you have a strategic financial mindset, you should do some research about different small investment ideas and the best practices for you. Start with ensuring that you are financially stable enough to be making stock investments.

This means having minimal debt and paid off credit cards. Then, look into different brokers online that can help you buy stocks. Each platform will have different pricing packages and fees to make orders.

Finally, the easy part is placing stock orders! Fund your account with your $400 investment and get to work. Remember that the market is only open Monday to Friday, everyday from 9:30 am to 4 pm Eastern Time. Make sure you are prepared to get your orders in during that active window.

Be sure to keep track of your stocks as well by checking them frequently. Try not to get too emotionally invested in the ups and downs of your certain stocks. Just stay knowledgeable about how they are performing so you can make smart choices on when to buy more or sell.

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6. Buy Cryptocurrencies

If there’s one trend from the pandemic that has exploded into 2021, it’s the rise in cryptocurrencies. Most famously those of Bitcoin, Ethereum, and Dogecoin that have made the front pages of the press over the past year, these forms of currency are digitally encrypted forms of payment that can be used to buy goods and services online.

While each kind of cryptocurrency has a price associated with the currency (e.g., 1 Bitcoin equals $29,813.80 and 1 Ethereum equals $1,798.11), these currencies work similarly to stocks in that they rise and fall.

This is how a $400 investment can become profitable. As supply and demand shifts, these cryptocurrencies and more businesses begin to accept it as a form of payment in the years to come. It’s also easy to find the best places to buy Bitcoin and other crypto such as Coinbase and TradeStation Crypto.

Being ahead of the game before this practice becomes a commonplace in society, it can score you some extra spending cash. There are over 4,000 cryptocurrencies out there right now and investing in the next big thing could score you a fairytale kind of come up.

Related: 8 Best Crypto Savings Accounts

7. Invest in Real Estate (REITs)

One of my favorite strategies for investing money right now is in real estate investment trusts (or REITs). What are these you may ask? These are companies that own massive amounts of real estate and properties all over the world. From houses to apartment complexes, warehouses, data centers to medical buildings, real estate conglomerates are booming right now as life returns to normalcy.

Since many people are returning to work and/or searching for a new place to live, the real estate industry is extremely active right now, which means these trust companies are turning a pretty penny. The way investors make money is simply when these companies make money! Dividends are distributed based on the income they make from leasing space and collecting rent.

It’s really that simple. These companies can be found on main stock exchanges and invested in that way or brokers can help investors find REIT mutual funds or ETFs too. You can get access to real estate investments by using apps like the ones in the table below that let you invest in REITs and more.