I am trying to invest money because I have around 3218.45 USD which I could invest, and start generating money. I am out of ideas in how can I invest the money to start generating money from my money

  • startup capital partner
  • stock
  • resales
  • a new startup
  • cryptocurrency

closed as too broad by Dheer, Bob Baerker, Chris W. Rea, JoeTaxpayer Feb 18 at 14:20

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  • Do you have an idea of how much additional money you will be adding to this investment in the future? Are you paying interest on any debt? – Ben Voigt Feb 18 at 0:28
  • I am not paying intest on any debt , but I would like to start investing , if it's work ,then I would to invest more money – cyb3rpunk Feb 18 at 0:34
  • What do you mean "if" it works? Investments work. University endowments are invested. There is definitely a gold-standard pattern of investment that an endowment manager can make, that will grow very well in the long term, (and will be universally agreed by auditors was a prudent choice, so no worry of going to jail). You can buy those investments too. – Harper Feb 18 at 1:59
  • 1
    "i hav around" and then a cent exact number. And you do not ahve "mone" - you have not even emergency funds. – TomTom Feb 18 at 6:54
  • Possible duplicate of Oversimplify it for me: the correct order of investing – yoozer8 Feb 18 at 12:05

By "generating money", I assume you mean specifically producing an income stream. With a little over $3k to invest, providing meaningful capital to a startup may not be realistic.

Cryptocurrency daytrading might produce an income stream - or you may lose your shirt, and you'll be playing against people who do it all day. The short-term equity game is basically zero-sum. This applies to day trading equity stocks, currency, metals, commodities, etc. as well. Holding equity long-term in a diversified portfolio builds wealth but does not produce income (now).

Reselling and/or retail arbitrage might make you some money, but you might find that it's hard to get enough quantity and margin to produce long-term income proportional to principal (you might turn $50 into $200 this way, but probably not $5000 into $20000).

Stocks are quite viable at your income level, however. Specifically, stocks - or mutual or index funds - which pay regular dividends can give you the potential for capital appreciation and an income stream. These are riskier than bonds and annuities but typically will pay off over the long haul. Some stocks pay dividends around 5%+; so your $3k investment could start turning as much as $150 per year, right now - not counting capital appreciation for possibly another $150 per year. Not too shabby!

Next come the bonds. You can buy federal treasury bonds for around 2.5%+ now. These have very low risk, but do not offer capital appreciation. Most likely, you can do significantly better with tax-free municipal bonds, possibly 4.5%+. If you live in a place where municipal bonds are not taxable at the state level, you can also save significantly on taxes; the "real" interest rate accounting for this could be closer to 5.5%+. $3k is a little low to get etarted but you can probably find something in that range.

Nect come annuities. You can buy an immediate annuity today for $3k and you'll get paid some amount every month for the rest of your life, or until the financial system basically collapses. Sounds great, right? Expect $120/yr or possibly less (and you don't get the principal back at the end). You might be able to get an annuity for $3k, or there might be a $10k (or higher?) minimum.

  • A muni bond at 4.5% yield may be comparable to a taxable investment with a 5.5% yield, but that doesn't make it correct to claim the muni bond has a "real rate" of 5.5%, it makes the real yield of the taxable investment only 4.5%. – Ben Voigt Feb 18 at 6:21
  • @BenVoigt You're right, of course. Sometimes I forget that taxes are the distortion and the absence of taxes is the natural state. – Patrick87 Feb 18 at 13:19
  • It's not really about which one is or is not "natural". The after-tax rate (which in the case of munis is equal to the before-tax rate) is the one you plug into the compound growth formulas to predict future value. The before-tax rate is not good for any calculation except figuring out taxes. – Ben Voigt Feb 18 at 15:20
  • @BenVoigt If you don't think this is a useful way to think of tax-free returns, don't think like this. I don't think it's wrong to say that a non-taxable 3.5% return is equivalent to a taxable 5% return if the tax rate is 30%; and whether you look at this as non-taxable accounts being relatively advantaged, or taxable accounts as being relatively disadvantaged, really is arbitrary. At the end of the day the amount of income is the same and that's what everybody cares about. – Patrick87 Feb 18 at 17:47
  • I absolutely agree it's useful to think of non-taxable 3.5% gross return and taxable 5% gross return as equivalent, since both are a 3.5% net return. I just disagree with calling the gross rate "real". Net is what determines the amount of income, and as you say, that's what matters at the end of the day. – Ben Voigt Feb 18 at 18:14

If there is a stock that the investor is interested in, then a small amount of money can get an option on 100 shares.

Also, leveraged commodity futures are available and leveraged currencies are available. For instance, 500 barrels of oil is a $2145 margin deposit, a 100,000 Treasury Note is a $1265 margin deposit, or 10 ounces of gold is a $374 margin deposit. Take the buy-side or the sell-side. For a Forex currency carry-trade example, the dollar versus the Swiss Franc pays about 2.25% interest on the leveraged amount. A $3000 margin deposit could hold a $50,000 position or more.

Another idea is closed-end-funds that often pay dividends of 6% or more. These funds are leveraged and hedged and are like hedge funds that the average person can buy.

Or mortgage-REIT's usually pay over 10% dividends. Business-development-companies usually pay over 10% dividends.

But the best investment is the investment that the investor has some feeling-for.

  • I didnt dv, but all these feel like gambling to me. If I put an endowment in any of those things, they'd put me in jail. If I put an endowment in hundreds of such things, maybe It'd be sanely diversified, but I doubt it would beat a more traditional asset mix except by luck. – Harper Feb 18 at 1:54
  • The OP seems to be asking for significant income from a small amount of money. But the closed-end-funds, for example, are usually less leveraged than the mortgage-REIT's. The futures and currencies are only leveraged if the account deposit is smaller than the contract size. – S Spring Feb 18 at 2:45

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