The Best Way to Invest 300 Dollars

If you have a spare three hundred dollars today, you have a choice between splurging it in the mall or paying your bills or invest the money. Splurging at the mall will provide pleasure but only for a short time.  Paying the bills will keep you updated but it will not make you any money. So, that leaves investing.  Well, you are better off with this choice for many reasons.  For one thing, you can earn money in the future to afford not just a shopping spree but even an exotic vacation.  For another thing, you can earn money to pay the bills even when you are retired from active employment.  There are couple of places to start out. Lets have a look at a few:

Certificates of Deposit

One of the safest investments possible in an uncertain world, certificates of deposit provide for higher interest rates compared to savings account.  You cannot, however, withdraw your principal investment before its maturity date lest penalties and fees are imposed on your money.  The good thing about certificates of deposit is that these are assured of return on investments regardless of the state of the economy.  Just make sure that you invest your accumulated 300 dollars in banks and credit unions with insurance from the Federal Deposit Insurance Corporation and National Credit Union Administration, respectively.  This is a secure but slow method of getting your money to grow.

Mutual Funds

Now, if you want your $300 to be invested in a wide variety of investment instruments like stocks, bonds, short-term money market instruments and other securities, then your best bet is mutual funds.  Basically, you pool resources with other investors such that your $300 becomes part of a larger pool of money that is used for making investments.  The profits and losses are divided among the mutual fund investors according to a pre-set agreement.  In many instances, your $300 can earn you significant returns in a few years with minimal management on your part.

That’s not the only advantage to mutual funds.  First, your investment portfolio will be more diversified, thus, lessening your risk to market volatility.  Second, you have your money in good hands since professional managers are in charge of investing the pooled resources. Third, you can start for as low as $100 (or $300, for that matter).  Fourth, you can invest additional amounts for as little as $50 every month. Soon enough, your $300 can turn into thousands if you stay long enough on the fund.

Stock Investments

If you want to dabble in stocks, you can opt for short-term stocks or invest in stocks that allow for lesser amounts of investments.  Think Coca-Cola and Disney stocks.  Of course, the assumption is that you know the basics of trading in stocks – buy low, sell high, for one thing. Otherwise, you are better off hiding the money under the mattress.