What To Do With 5000 Dollars: 15 Best Ways To Grow Wealth (2024)

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It may sound impossible, but with the right tips and advice, you can make $5,000 work for you- you can certainly use that money to make more money.

This article will share some helpful tips on investing, saving, and growing your money over time.

We’ve used money to start a blogging business, bulk up our IRA retirement plans, and much more, so you have plenty of options to pick what to do with 5000 dollars.

So if you want to feel more secure about your financial future and grow your riches, keep reading!

Quick Picks

Everyone has different ideas about what to do when they get some extra cash.

Some people like to save it for a rainy day, while others want to invest it and grow their wealth. Here are some quick ideas to help you figure out what to do with that 5000 dollars:

• Best Low-Cost Side Hustle – Proofreading
• Most Money Potential – Blogging
• Best Overall Side Hustle App – Swagbucks
• Best Long-Term Money – Real Estate
• Best Short-Term Cash Flow – Stocks

What To Do With 5000 Dollars

1. Start A Side Hustle

When it comes to making the most of their $5000, many people start a side hustle. As the old saying goes, “Sometimes you have to spend money to make money.”

Side hustles can be a great way to make extra money, learn new skills, and network with other professionals.

You could become a proofreader, virtual assistant, and more freelance jobs based on the skills you already have. Or you can take online courses to develop new skills that are in high demand- and pay better!

We have found side hustles and jobs using FlexJobs, a free app you can use to search for all types of jobs.

2. Start An eCommerce Business

When making the most of their $5000, many working and stay-at-home moms start their own eCommerce businesses.

The first step is to develop a good idea for a product or product to sell. Some good ideas for an eCommerce business are:

• Start an online store for used items
• Sell handmade jewelry and accessories
• Set up an Etsy shop for arts and crafts
• Offer a selection of vintage finds on your eCommerce site
• Be a dropshipper and sell other people’s products

The next step is to create an online storefront and list products for people to buy. We use Shopify, which makes it easy to set up a professional-looking store without you doing all the work.

Once your store is set up, create social media profiles for your business and share content that will interest your target audience. People need to find you to buy from you!

3. Start Earning Passive Income

Passive income is money you earn without putting in a lot of work, so investing money now can create money later without you working more hours.

One way to earn passive income is by selling printables. Printables are an excellent way for people to make the most of their $5000 because it doesn’t require much work or investment.

You can sell budget sheets, organization papers, worksheets, coloring sheets, and more.

Gold City Venturesoffers a free e-printables workshop to teach you how to create printables and start an online shop.

Another way to earn passive income is through selling online courses. You can create an online course about any topic and sell it on sites like Udemy or Teachable.

Creating an online course requires some work upfront, but once it’s created, it can be sold repeatedly, making it a significant income stream.

4. Make An Emergency Fund

An emergency fund is a savings account you can use in an emergency for unexpected expenses.

Having this fund saved up, you won’t have to worry about taking on debt or borrowing money if something unexpected happens.

Dave Ramsey’s Baby Steps suggest you have enough money to cover at least 3 months’ worth of expenses or more if you can! That means if you lose your job or have an extended hospital stay, all your regular bills at home are covered.

You can start a savings account through Chime, which also gives you 1.5% of the money you put in. Having $5,000 in your account for a month could earn you an extra $75.

5. Investing In Stocks

If you have $5000 saved, you can invest in stocks that pay dividends.

Dividends are payments made by a company to its shareholders from its profits. They usually occur quarterly and can be reinvested back into the company or withdrawn as cash.

You can invest in several different stocks, and it’s essential to do your research before making any decisions. You want to find stocks that offer a good return on investment and are compatible with your risk tolerance.

TheAlbert appis a great tool when researching stocks on the stock market. It’s free to use and can help you make informed decisions about where to invest your money.

Check out our Albert Review to see how you can invest in the stock market using the app.

6. Commission Free ETFs & Mutual Funds

Another way to invest $5,000 is with commission-free ETFs and mutual funds.

You can keep more of your money invested and working for you by avoiding commission fees. Plus, you can start investing with a few hundred dollars and a low account minimum.

ETF stands for exchange-traded funds. These index funds are a basket of securities that trade on an exchange. They’re similar to a mutual fund, but they typically have lower fees and low expense ratios.

Several commission-free ETF providers are available, includingRobinhoodandAcorns. Both offer various ETFs to choose from depending on your investing style to find suitable investment options for your goals and risk tolerance.

Robinhoodoffers a commission-free for stock trading, making it an excellent choice for investing in individual stocks and ETFs to create a balanced portfolio. It’s a DIY platform, so you’ll need to be comfortable managing your own investments in this brokerage account.

Acorns is a great choice for those who want a hands-off approach to investing and market research. The app also rounds up your purchases to the nearest dollar and invests the difference, so you can grow your brokerage account without thinking about it.

Be sure to compare the trading fees and options available to find the commission-free ETF brokerage firm that best suits your needs. Commission-free ETFs can help you grow your money while keeping more of it in your pocket.

7. Invest In Bonds

By investing money in bonds, you can earn a steady income while keeping your money safe. Bonds are a type of investment that gives you a fixed rate of return, making them a low-risk option.

There are different kinds of bonds available to invest $5,000 in.

• Government bondsare backed by the full faith and credit of the issuing government, making them a very safe investment for those with a low-risk tolerance. However, government bonds tend to have lower returns than other bonds.
• Corporate bondsare issued by companies and are not backed by the full faith and credit of the government. Corporate bonds are more volatile than government bonds but typically offer higher returns.
• Municipal bondsare issued by state and local governments and are typically used to finance infrastructure projects. Municipal bonds are exempt from federal taxes, making them a popular investment choice for people in high tax brackets.
• High-yield bondsare issued by companies with lower credit ratings and offer higher yields than other bonds. These bonds are riskier than other types, but they offer higher returns.

8. Retirement Investing

When it comes to ways to invest $5,000 in retirement investing, the sooner you start your retirement account, the better. That’s why retirement accounts like 401(k)s and IRAs are the best options for young investors to add to their investment portfolios.

WithBetterment, you can invest in IRAs and 401(k)s in addition to various stocks and bonds to help you reach your retirement goals.

401(k)

The 401(k) is one of the most popular ways to invest $5,000 in an investment portfolio.

401(k) investments allow you to save money pre-tax, reducing your taxable income in the year you contribute. In addition, many employers offer matching contributions, which helps grow your savings even more and is basically free money.

If you’re looking for a retirement investment that offers a lot of flexibility, the 401(k) might be a good option. You can also withdraw your cash anytime, although doing so may come with penalties.

IRA

An IRA is one of the most popular options for building your retirement funds. This type of investment allows you to save money post-tax, which can be a great option for those who want to reduce their taxable income in the year they contribute.

One downside of IRAs is that there are contribution limits, so you may not be able to save as much as you want. In addition, you may not be able to access your money until you retire, making it difficult to use in an emergency.

If you’re interested in investing in an IRA, there are two main types: traditional and Roth that you can open at a bank, credit union, or brokerage firm.

With a traditional IRA, you’ll pay taxes on your withdrawals in retirement. With a Roth IRA account, you’ll pay taxes on your contributions now but not on your withdrawals in retirement.

Talking to a certified financial planner before deciding about investing in an IRA is essential. They can help you determine which type of IRA is right for you, how much you should contribute, the tax benefits, and when they can be withdrawn tax-free.

9. Real Estate Investing

Real estate has always been a solid investment, and with the current state of the market, now is a great time to get into the game, even if you are on a fixed income.

There are many platforms available that make it easy to invest in real estate, no matter what your budget is.

One platform that is especially good for first-time investors isFundrise. Fundrise allows you to invest in local commercial and residential properties for as little as $10.

And because they are a publicly traded company, you can quickly sell your shares if you ever want to cash out.

You can learn more about Fundrise inour Fundrise Review.

Another option for real estate investing isArrived Homes. Arrived Homes specializes in fixing and flip properties, so you can quickly see a return on your investment. They also have a Buy Now program that allows you to purchase properties without going through the traditional buying process.

OurArrived Homes Reviewcan help you learn more about investing in real estate with Arrived Homes.

If you’re looking for a more passive investment,Roofstockmay be the real estate investing platform for you. Roofstock is an online marketplace for buying and selling single-family rental homes.

This makes it easy to invest in rental properties without doing research or legwork yourself. Plus, all of the homes on Roofstock are screened and approved by experts, so you can be sure you’re getting a good deal.

Want to learn more about Roofstock? Check outour Roofstock Review.

10. Use A Robo-Advisor

Robo-advisors are an excellent option for beginner investors who want to invest their money but don’t have the time or knowledge to do it themselves.

Programs like Betterment, M1 Finance, and Stash are all Robo-advisors you can use to grow your wealth.

Robo-advisors make investment decisions based on your risk tolerance and investment goals. They also re-balance your portfolio automatically, so you don’t have to worry about it.

You deposit your money into an account, then the Robo-advisor will invest it for you, which is an excellent option for people who want to invest but don’t know how to get started.

11. High-Yield Savings Account (HYSA)

High-yield savings accounts (HYSA) are one of the best ways to invest if you are looking for a safe and high-yield way to save money and earn interest.

An HYSA is a type of savings account that offers a higher interest rate than most other savings accounts, known as an annual yield percentage (APY). Your money will earn interest and grow faster in an HYSA than in a regular savings account, and you don’t have to worry about losing money like in the stock market.

And because the APYs are so high, it’s a great place to store your funds for emergencies or other short-term savings.

There are a few different HYSA accounts to choose from, but Chime and CIT Bank are two of the best:

• Chime: 1.5% APY
• CIT Bank: 1% APY

12. Cryptocurrency Investments

Cryptocurrency investments offer a way to grow your money over time and can be a good option for people who want to make the most of their $5000.

Cryptocurrency is essentially digital currency, cash that isn’t physical nor run and backed by a government like the U.S. dollar is.

When it comes to cryptocurrency investments, there are a lot of options to choose from. For example, you could invest in Bitcoin, Ethereum, Litecoin, or any other digital currency.

However, it’s important to remember that cryptocurrencies are still relatively new and highly volatile. You may want to keep crypto investments as a very small percentage of your portfolio.

You’ll need to do your research to pick the best crypto investment for your risk tolerance and portfolio.

There are a few platforms where you can invest in crypto, including Coinbase.

13. Start A College Fund

If you want to make the most of your money, one of the best ways to invest $5,000 is to start a college fund.

Getting a college education can be expensive, and if you don’t have any money saved up, it can be tough to pay for tuition and other expenses. But if you have a college fund, you’ll be able to pay for school without being concerned about borrowing more money.

There are several ways to start a college fund to pay for your higher education. You could invest your money in a 529 plan or save it in a high-yield savings account at a financial institution.

WithUpromise, you can earn cash back on everyday purchases, which you can use to pay for higher education. Plus, if you sign up now, Upromise will give you a $30 bonus to start the fund.

14. Pay Off Debts

According toLending Tree, the average American household has more than $6,000 in credit card debt. If you’re one of the many people struggling with high-interest debt, your $5000 could be used better by paying off your balances.

Paying off your debts is a great way to improve your credit score and save money on interest payments. And, since theaverage interest rate on a credit cardis over 17%, you could save hundreds of dollars by consolidating your loans into a single, lower-interest loan.

15. Monetize A Hobby

When it comes to finding ways to make money, many people have hobbies that could be a source of income.

If you love spending time outdoors, for example, you could use walking apps to get paid for walking or sign up with Rover to get paid for walking dogs.

Or, if you love baking, you could sell your treats at local farmers’ markets or online.

The key to monetizing a hobby is finding a way to offer something unique and valuable, with good quality and pricing. People are often happy to pay for services or products they can’t easily get elsewhere.

So think about what you’re good at and how you could offer it in a way that’s interesting and profitable. With some hard work and luck, you could turn your hobby into a source of extra income!

Side Hustle Ideas

Starting a side hustle can put you on the way to saving that extra $5,000 or be a wise way to make more money from your current cunds/

A side hustle is a job or project that you do in addition to your primary source of income. It can be anything from freelancing to selling crafts online.

There are plenty of great side hustle ideas, and it can be tough to choose just one. We’ve put together a list of our favorite side hustles for you to try. Check them out to start earning today!

Proofreading

Becoming a proofreaderis an excellent way to make money on the side. It’s relatively easy to learn, and you can choose from various proofreading jobs. Proofreading may be the perfect option if you’re looking for a way to make some extra cash.

The best part about proofreading is that it can be done from home. With the internet making everything more accessible, more people choose to work remotely.

And thanks to advances in technology, it’s easier than ever to do that. Proofreading could be the perfect job for you if you want to work from home and have a flexible schedule.

Proofread Anywhereoffers a FREE proofreading workshop to give you more information about this remote job. Why not sign up today and start on your path to becoming a proofreader?

Blogging

People can earn money by starting a blog– we ourselves started a blog and quit our jobs!

Blogs can be on any subject, from personal finance tips to product reviews. It comes down to whatever interests you and attracts readers and followers.

The key is to grow a strong blog and monetize it wisely- otherwise, you won’t actually make money from your hard work.

Affiliate marketing is when you promote other people’s products or services on your blog and earn a commission for every sale. This can be a great way to make money with very little work.

Making Sense of Affiliate Marketingis the best place to start when you want to learn about making money with affiliate marketing.

Freelance Writing

Did you know that freelance writing is one of the most flexible and profitable ways to make money from home?

You can work as much or as little as you want, choose your own hours, and set your own rates. Plus, there are a variety of freelance writing niches that pay writers to choose from, so you can find something that fits your skills and interests.

Before you start pitching clients, you should have some solid writing experience and knowledge under your belt.

Freelance Write From Home offers a FREE E-book for people who want to learn about freelance writing. Building your skills and expanding your services is the best way to charge more money for your work and time.

Bookkeeping

Starting a bookkeeping business can be a great way to make some extra money. You don’t need special training or education to start, and many businesses and individuals need bookkeepers.

Bookkeepers handle financial documents, creating spreadsheets and invoices, so businesses know where their money is going and where it is (or isn’t!) coming in from.

To become a successful bookkeeper, you’ll need to be organized, detail-oriented, and good with numbers. If you have these qualities, starting a bookkeeping business could be an excellent way to make some extra money.

Before starting a bookkeeping business, take the free course lesson fromBookkeeper Launch to help you decide if bookkeeping is something you want to do.

Flea Market Flipping

Flea market flipping is another way to make money on the side. You can buy flea markets and garage sales items, fix them, and sell them for profit.

Flipping items don’t require any special skills or training. All you need is some basic knowledge about repairs and renovations.

You can flip items for a profit if you can do basic repairs on items or clean them up to look more like new. Flipping is a great way to turn old, unwanted items into cash.

Flea Market Flipper offers a FREE flipping workshop to teach you how to flip items for profit.

Final Thoughts

Many money-making options are available to you, depending on your interests and skills.

If you want to make the most of your income or savings and get on the path to financial freedom, consider investing, saving, or starting a side hustle.

Take some time to think about what you want to do with your money, and then make a plan and research all your options to make an informed decision to get a decent return on your investment.

Watch out for risky investments like penny stocks and pyramid schemes, and stick with more proven methods like real estate with Fundrise.

You can make your $5,000 go a long way with a little effort. And remember, the sooner you start planning and saving for the future, the more likely you will achieve those goals.

So get started today and see how quickly your dreams can become a reality. How will you use your $5,000 windfall?