7 Best Ways To Invest $5,000 Depending on Your Money Goals (2024)

Martin Dasko

·5 min read

7 Best Ways To Invest $5,000 Depending on Your Money Goals (1)

How you invest your money will depend on your goals and stage in life. You won’t be investing the same way in your 30s as you did when you landed your first job out of college. Your investment strategy will also change when you have a family and begin considering retirement.

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The way you invest $5,000 will depend on what level you’re at currently. This is why we spoke with a financial expert to assist with perspective on the best ways to invest $5,000, depending on your money goals. Taylor Kovar, CFP and CEO of Kovar Wealth Management, shared insights on the best ways to invest.

Create an Emergency Fund If You’re New to Saving

“If you don’t have an emergency fund, consider a high-yield savings or money market account,” Kovar told us. “These options provide liquidity and safety for quick access in case of unexpected expenses.”

When you first get into personal finance, it’s essential that you get into the habit of saving money. Most financial experts suggest creating an emergency fund so you have up to six months’ worth of living expenses set aside in case of a job loss or any other unexpected scenario.

Invest in Yourself To Increase Your Income

If your goal is to increase your income, you will want to invest in yourself to make more in the future. Every dollar that you invest in yourself today could benefit you greatly. You don’t have to invest the $5,000 into one option, but you have various choices. Consider these:

  1. Learn a skill. If you have the time, you can spend some funds on learning something new that will help you make more.

  2. Invest in a mentorship. If you’re unsure how to advance in your career, you can spend the money on a mentorship program or an accountability group.

  3. Attend industry events. You could learn from attending conferences and other events related to your industry that could help you expand your network.

The goal is to use your savings to help you reach the next level.

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Leave Your Funds in a High-Yield Savings Account If You’re Just Starting

“For short-term goals, like buying a car or taking a vacation within the next 1-2 years, a short-term CD or a conservative bond fund can offer a balance between growth and capital preservation,” said Kovar. If you just started saving money and aren’t sure of your next financial move, your best option is to leave your money in a savings account that earns a notable interest rate.

These accounts offer a decent return on your money and liquidity, so you don’t have to worry about not having access to your money. You could then use the funds for your other financial goals.

Fund Your Retirement Accounts If You’re Concerned About the Future

“If you’re looking to boost your retirement savings, contributing to an IRA or a Roth IRA can be a wise choice,” remarked Kovar. “Investing in a diversified mix of stocks and bonds through low-cost index funds or ETFs within these accounts can offer growth potential over the long term.”

It’s never too early to get serious about your retirement planning. The sooner you start investing in your golden years, the sooner you’ll have compound interest.

Pay Down Debt If You Want To Invest

If you’re looking to get serious about investing your money, you may want to start by working on paying down your debt first. You could pay down the lowest balance first to gain some momentum or focus on the debt with the highest interest rate to save more in the long run. Either way, the goal is to eliminate your debt so that you can invest in other instruments.

Invest in the Stock Market

“For those with a higher risk tolerance aiming to build wealth, investing in individual stocks or peer-to-peer lending can offer higher returns,” Kovar shared. He did offer a bit of a warning, though. “However, these come with increased risk, so they may not be suitable for everyone.”

Learning about the stock market or putting your money in an index fund can be an ideal way to invest $5,000. As you save more money, you can increase your investment in the stock market.

Look Into Real Estate Options

While $5,000 isn’t enough to purchase a home in most locations, it’s enough to start thinking about real estate. You can invest in Real Estate Investment Trusts (REITs) or crowdfunded real estate projects. You can invest in REITs without owning any actual land. You can also pool your money together with other investors to get into the real estate market through crowdfunded projects.

Both of these options would be solid ways to dabble in real estate with $5K.

Closing Thoughts

As always, we recommend that you take the time to look into your investment options and seek out advice from multiple sources before making a decision. You’ve worked hard to save this money and don’t want to see it disappear or to lose value.

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This article originally appeared on GOBankingRates.com: 7 Best Ways To Invest $5,000 Depending on Your Money Goals

7 Best Ways To Invest $5,000 Depending on Your Money Goals (2024)


7 Best Ways To Invest $5,000 Depending on Your Money Goals? ›

To turn $5,000 into more money, explore various investment avenues like the stock market, real estate or a high-yield savings account for lower-risk growth. Investing in a small business or startup could also provide significant returns if the business is successful.

How to turn $5,000 dollars into more money? ›

To turn $5,000 into more money, explore various investment avenues like the stock market, real estate or a high-yield savings account for lower-risk growth. Investing in a small business or startup could also provide significant returns if the business is successful.

Is $5000 a good amount in savings? ›

Saving $5,000 in an emergency fund can be enough for some people, but it is unlikely sufficient for a family. The amount you need in your emergency fund depends on your unique financial situation.

What are the 5 things you should do before investing money? ›

Before you make any decision, consider these areas of importance:
  • Draw a personal financial roadmap. ...
  • Evaluate your comfort zone in taking on risk. ...
  • Consider an appropriate mix of investments. ...
  • Be careful if investing heavily in shares of employer's stock or any individual stock. ...
  • Create and maintain an emergency fund.

What are 2 things to keep in mind when you start investing money? ›

  • Have a Financial Plan. ...
  • Make Saving a Priority. ...
  • Understand the Power of Compounding. ...
  • Understand Risk. ...
  • Understand Diversification and Asset Allocation. ...
  • Keep Costs Low. ...
  • Understand Classic Investment Strategies. ...
  • Be Disciplined.

How to make $100 dollars every day? ›

In conclusion, making an extra $100 a day is possible with some effort and creativity. You can start a blog, do freelance writing, complete online surveys, sell products online, drive for Uber or Lyft, rent out your home or space, sell photos online, or become a virtual assistant.

How much does a $5000 CD make in a year? ›

How much interest would you make on a $5,000 CD? We estimate that a $5,000 CD deposit can make roughly $25 to $275 in interest after one year. In comparison, a $10,000 CD deposit makes around $50 to $550 in interest after a year, depending on the bank.

How much money does the average person have in their bank account? ›

About 29% of respondents have between $501 and $5,000 in their savings accounts, while the remaining 21% of Americans have $5,001 or more. Few hold much cash in their checking accounts as well. Of those surveyed, 60% report having $500 or less in their checking accounts, while only about 12% have $2,001 or more.

How much does the average American have in their bank account? ›

The average American has $65,100 in savings — excluding retirement assets — according to Northwestern Mutual's 2023 Planning & Progress Study. That's a 5% increase over the $62,000 reported in 2022.

What is the number 1 rule investing? ›

Warren Buffett once said, “The first rule of an investment is don't lose [money]. And the second rule of an investment is don't forget the first rule.

How to invest $5,000 wisely? ›

Here are seven of the best ways to invest $5,000:
  1. S&P 500 index funds.
  2. Nasdaq-100 index ETFs.
  3. International index funds.
  4. Sector ETFs.
  5. Thematic ETFs.
  6. Real estate investment trusts (REITs).
  7. Investing with the greats.
Mar 1, 2024

What is the 10 5 3 rule of investment? ›

According to this rule, stocks can potentially return 10% annually, bonds 5%, and cash 3%. While these figures are not guarantees, they serve as a guideline for investors to forecast potential returns and adjust their portfolio accordingly.

How to make money double? ›

The classic approach of doubling your money by investing in a diversified portfolio of stocks and bonds is probably the one that applies to most investors. Investing to double your money can be done safely over several years, but for those who are impatient, there's more of a risk of losing most or all of their money.

What is the golden rule of investing? ›

Warren Buffet's first rule of investing is to never lose money; his second is to never forget the first rule. This golden rule is key for long-term capital protection and growth.

How to quickly turn 5k into 10k? ›

Exploring high-yield savings accounts, investing in stocks and bonds, considering real estate ventures, starting a side business, and seeking professional financial advice are all effective ways to grow your money. Remember, patience and discipline are key when it comes to financial growth.

How can I flip money for more? ›

Here are ten ways that you can flip money:
  1. Buy And Sell Products On eBay. ...
  2. Become A Local Real Estate Flipper. ...
  3. Invest In Commodities. ...
  4. Trade Forex. ...
  5. Flip Cars For Profit. ...
  6. Invest In Mutual Funds. ...
  7. Buy & Sell Domain Names. ...
  8. Buy & Sell Antiques.

How to turn $1,000 dollars into more? ›

Read along to learn the best ways to invest $1,000 in 2024.
  1. Deal with debt.
  2. Invest in Low-Cost ETFs.
  3. Invest in stocks with fractional shares.
  4. Build a portfolio with a robo-advisor.
  5. Contribute to a 401(k)
  6. Contribute to a Roth IRA.
  7. Invest in your future-self.
  8. FAQs about how to invest $1,000 dollars.
Jan 29, 2024

How to turn $1,000 dollars into more money? ›

Put it in an IRA

If you're wondering how to invest $1,000, putting your money in a retirement account offers one of the highest potential returns. You can opt for a workplace retirement account or open an IRA on your own with an online broker.


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