<div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5db1ee9ddee01964724bbb23-2121/gettyimages-1081538288.jpg" border="0" alt="woman using laptop" data-mce-source="Sarah Waiswa/Getty Images" />Sarah Waiswa/Getty Images</div></div></div><ul class="summary-list"><li><a href="https://www.businessinsider.com/how-to-save-money-2019-2">Saving money</a> is important - whether in an <a href="https://www.businessinsider.com/how-much-money-to-save-in-emergency-fund-rules">emergency fund</a>, <a href="https://www.businessinsider.com/best-way-to-save-for-retirement">retirement accounts</a>, <a href="https://www.businessinsider.com/how-to-open-high-yield-savings-account-online-save-money">high-yield savings accounts</a>, or elsewhere.</li><li>But <a href="https://www.businessinsider.com/how-to-invest-money">investing your money</a> is more likely to yield higher returns. </li><li>If you're not sure how to get started and only have a small pot of money to work with, robo-advisers, microloans, and startups are great opportunities to invest.</li><li>Open an invesment account with <a href="https://betterment.evyy.net/BQXmJ">Betterment</a> or <a href="https://wealthfront.pxf.io/03JEN">Wealthfront</a> today and watch your money grow »</li></ul>We've all heard it: The best way to make money is to have money. And whether you've seen an early-stage startup hit massive success before your eyes, or hated getting left behind in the crazy (now crashed) bull run of the last five years, you've probably wondered how to maximize your money like Warren Buffett.After all, 1 to 2% interest in your savings account can feel paltry when compared to double-digit gains.The problem is, many feel they just don't have enough money to be an investor. Which, to be fair, was true for a long time.Now, thanks to <a href="https://www.businessinsider.com/intelligence/future-of-fintech?IR=T">the burgeoning fintech sector</a>, <a href="https://www.businessinsider.com/how-to-invest-money">investment opportunities</a> are becoming more available to individuals at every savings level - even for as little as $500.So how do you do it? There are theoretically infinite ways to "invest" your money, as all it takes is capital and a way to get return on that capital.However, for most individuals with a full-time job, investments are thought of as a passive, low-effort mechanism for seeing moderate gains. And when it comes to <a href="https://www.businessinsider.com/how-to-calculate-return-on-investment-earnings-roi">return on investment</a> relative to risk and effort, there are some clear winners.We outlined three of the best ways to invest with just $500 and little more than a laptop.<h2>1. Invest with the help of a robo-adviser</h2>One of the most popular inventions in fintech is the <a href="https://www.businessinsider.com/what-are-robo-advisors-2017-9">robo-adviser</a>.The invention of algorithm-based trading and advice platforms has made it possible for almost anyone to take advantage of the stock and bond markets - which you want to take advantage of given their power for wealth creation.For perspective, the average return for the S&amp;P 500 has been 7% over the last 60 years. That's five times the return of a <a href="https://www.businessinsider.com/how-to-open-high-yield-savings-account-online-save-money">high-yield savings account</a>, and three times that of a <a href="https://www.businessinsider.com/should-i-use-a-cd">CD (certificate of deposit)</a>.Now, they key to that 7% is broad-based exposure. While you're not seeing the triple-digits gains of crypto and pot stocks, you're also not seeing triple-digit losses, either. It's almost always recommended that passive investors get broad exposure via exchange-traded funds (ETFs) or other vehicles.Because funds or stocks can be difficult to select and manage, robo-advisers like <a href="https://betterment.evyy.net/BQXmJ">Betterment</a> and <a href="https://wealthfront.pxf.io/03JEN">Wealthfront</a> use data and their algorithms to do the decision making typically reserved for wealth managers. And they're pretty good at it - returning 2.6% better than the average investor.Both robo-advisers automatically invest your savings in the market based on your risk preference and goals, and as fiduciaries, it is their responsibility to keep your best interest in mind.While you may see ups and downs in the short term, as all investors do, over the long run you are getting exposure to one of the largest wealth-generating tools, with almost no more effort than creating a savings account. Open a brokerage account with <a href="https://betterment.evyy.net/BQXmJ">Betterment</a> or <a href="https://wealthfront.pxf.io/03JEN">Wealthfront</a> today and watch your money grow »<h2>2. Invest in a startup </h2>Normally, to invest in a private company, you need to be an accredited investor, which the <a href="https://www.investor.gov/additional-resources/news-alerts/alerts-bulletins/investor-bulletin-accredited-investors" target="_blank" rel="noopener">SEC defines</a> as an individual income of over $200,000 or a net worth of $1 million. However, with <a href="https://microventures.com/">MicroVentures</a>, you can start investing through crowdfunding for as little as $100.MicroVentures is a FINRA-registered marketplace that aggregates individual investments through the accredited First Democracy VC, which then allows for investment in early-stage companies in what's known as <a href="https://microventures.com/equity-crowdfunding" target="_blank" rel="noopener">equity crowdfunding</a>. Think Kickstarter, except you get to make profits (MicroVentures does have an <a href="https://equity.indiegogo.com/" target="_blank" rel="noopener">active partnership</a> with Indiegogo).MicroVentures tries to eliminate some of the risk by vetting early-stage startups to find primary and secondary investment opportunities that have funding needs ranging from $150,000 to over a $2 million, and their <a href="https://microventures.com/about/portfolio" target="_blank" rel="noopener">portfolio of companies</a> includes 23andMe, Bonobos, and HotelTonight. However, you should take note: This is not an option for those who need liquidity. Under Title III of the SEC, you're basically locked into your shares for at least a year, and selling after that can typically only be done back to the company, or to another accredited investor.While a great opportunity to invest in a company you believe in, you should always keep in mind that <a href="https://smallbiztrends.com/2016/11/startup-statistics-small-business.html" target="_blank" rel="noopener">50% of small business fail in the first four years</a>. In other words: invest carefully.<h2>3. Invest in microloans</h2>Since 2006, using data from the Nobel Prize-winning project of economist Muhammad Yunus, microlending has become a huge source of business development in the world. Typically referring to loans of less than $50,000, microloans are a way for businesses to get capital outside of traditional banks.<a href="https://www.kiva.org/">Kiva</a> is probably the leading name in this field, however, it's a non-profit that primarily targets social impact in developing countries.If you want to loan out your money as a means of wealth generation, your best option with $500 or less to invest is <a href="https://www.prosper.com/">Prosper</a>. It's a peer-to-peer lending network that allow you to receive monthly payments with interest in exchange for a principal loan. (<a href="https://www.lendingclub.com/">Lending Club</a> is another option but requires a minimum of $1,000 to get started.)As far as performance goes, Prosper has seen an average of 3 to 8% in historical returns, with performance increasing the more diversified a portfolio becomes. However, one big thing to note is state availability. State regulations around microloans differ, and before you do anything, you need to check if investing in microloans is even a possibility for you. <h2>The bottom line</h2>Whether you want to invest in securities, startups, or microloans, you should always do so with liquid money. If you have money you're saving for a mortgage or student loans, this is not the place to invest it.The fundamental principle underlying investments is you're taking on higher risk for the chance of more gains, and that higher risk means you may lose your money (or, at the very least, see a short-term decrease in value).That being said, almost every wealthy individual has an array of investments increasing their wealth, and there's no reason you can't join in on the party.As long as you are disciplined and don't over-leverage yourself, it's not unrealistic to see gains of two to three times that of traditional savings instruments. Do your research, make a plan, and get started.<ul class="read-more-links"><li>More <a href="https://www.businessinsider.com/category/personal-finance-insider">personal finance</a> coverage</li><li><a href="https://www.businessinsider.com/best-airline-credit-card-comparison-delta-united-american">What's the best airline credit card?</a></li><li><a href="https://www.businessinsider.com//best-cash-back-credit-cards">The best cash back credit cards</a></li><li><a href="https://www.businessinsider.com/are-cds-a-good-investment">Are CDs a good investment?</a></li><li><a href="https://www.businessinsider.com/when-to-save-money-in-high-yield-savings">When to save money in high-yield savings</a></li><li><a href="https://www.businessinsider.com/best-rewards-credit-cards">Best rewards credit cards</a></li></ul>Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. What you decide to do with your money is up to you. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.

3 ways to get started as an investor for as little as $500

<img class="gwt-Image" src="/photo/51493904.cms" /><keyword id="605051" type="PERSON" weightage="20" keywordseo="Thomas-Muthoot">Thomas Muthoot</keyword> was born into a family business with retail lending at its core. With the motto 'Empowerment through affordability and convenience,' he has pioneered the art of lending beyond financial considerations and is now the executive director of <a href="http://www.muthoot.com/">Muthoot Fincorp</a>, a division of the Muthoot Pappachan Group, which boasts a variety of unique financial solutions with sustainability at its core. Together, the companies cater to the financial needs of a massive market of underserved people in the world's most populous country — India. 
 
Muthoot drew inspiration from C.K. Prahlad's book, “The Fortune at the Bottom of the Pyramid,” which sought to demonstrate how companies worldwide could identify, build and profit from new markets among the word's several billion poorest people, while at the same time help alleviate poverty. Five years after Muthoot first read the book, the ideas are no longer theory to him. He has proven that they work. 
 
<img class="gwt-Image" src="/photo/51493881.cms" style="height: 375px; width: 300px;" /> 
 <keyword id="242359" type="COMPANY" weightage="20" keywordseo="Muthoot-Fincorp">Muthoot Fincorp</keyword> now has a network of more than 3,800 branches across his country. "Our aim is to empower women and alleviate poverty in India," says Muthoot, a member of <a href="http://www.ypo.org/">Young Presidents’ Organization</a> since 2011. “We also started this business inspired by the impact and success of the Grameen Bank, the micro-finance organization in Bangladesh, founded by Nobel Laureate Muhammad Yunus.” 
 
"Within four years we have served more than 1.3 million women by providing them finance, training and welfare," he says. "All of them come from remote, rural villages, and we have tried to make them self-dependent entrepreneurs of their own micro-businesses. Most importantly, we go to these remote places and serve them on their doorstep." 
 The group's organization, <keyword id="3292956" type="UNKNOWN" weightage="20" keywordseo="Muthoot-Mahila-Mitra">Muthoot Mahila Mitra</keyword>, follows the Joint Liability Group (JLG) model of micro-finance. Customers are organized into lending groups of five to 10 women, with each person offered a loan of between Rs10,000-15,000 (USD165-USD250) depending on her repayment capacity, for a tenure of 52 weeks. Within a few years the micro-finance business has attracted 800,000 customers and a loan portfolio of more than USD140 million. 
 
The wellness of clients is equally important and the group conducts financial literacy classes, develops links to markets, runs medical wellness camps and provides water purifiers to those without safe drinking water. 
 
Muthoot also spotted an early opportunity within the vast shortage of low-cost housing in India and was instrumental in setting up the Muthoot Housing Finance Company, of which he is managing director. The company typically offers home loans of up to USD25,000 for a period of 15 years, lending mainly to the low-income, informal sector who cannot secure funding from the formal banking. 
 
Muthoot has instead built up a field-based assessment model that assesses income on the basis of cash flow, without any formal income documentation. Through this approach the company has been able to fulfill the dream of home ownership for more than 5,000 customers. 
 
Power dynamics within these homes are changing too. A recent survey by independent finance agency IntellCash has shown that financial decision-making between husbands and wives has begun to equalize, a result of focusing on women's financial empowerment by Muthoot Fincorp. 
 
"Many women in Indian households are not involved in any economic activities,” says Muthoot. "They haven't even realized their potential. We aim to uplift them to become part of mainstream economic society." 
 
<keyword id="852310" type="ORGANIZATION" weightage="20" keywordseo="YPO">YPO</keyword> (Young Presidents’ Organization) is a not-for-profit, global network of young chief executives connected through the shared mission of becoming Better Leaders Through Education and Idea Exchange™. For more information, visit <a href="http://www.ypo.org/">www.ypo.org</a>. 
 
(The article is written by Grant Schreiber, <a href="http://www.realleaders.media/">Real Leaders</a>)

Financing the Bottom of the Pyramid

<img class="float_right" src="http://static2.businessinsider.com/image/5164312a69bedde15c000004-380-285/muhammad-yunus.jpg?maxX=400&amp;maxY=300" border="0" alt="Muhammad Yunus" width="400" height="300" />Today's advice comes from Muhammad Yunus, Nobel Prize Winner and founder of Grameen Bank, via <a href="http://hbr.org/2012/12/muhammad-yunus/ar/1">Harvard Business Review:</a><a href="http://hbr.org/2011/03/lifes-work-norman-foster/ar/1"></a> 
"In the beginning, we were very small, so we were picky. We were trying to get the best possible staff. Now that we’re <keyword id="6357342" type="PERSON" weightage="60" keywordseo="Hiring">hiring</keyword> so many people, we’re not looking for the ideal. There will be qualitative differences in the people we hire, but it’s OK. Bring them in, and let them go through the process. We take many kinds of people, and the system turns them into ideal people."
Yunus' bank is in the business of helping low income entrepreneurs in <keyword id="6354759" type="COUNTRY" weightage="60" keywordseo="Bangladesh">Bangladesh</keyword> start their own businesses. To build that kind of an enterprise, Yunus says you need to make sure you take your time picking a solid team first. Once the company begins to scale, however, having too much control on who you hire can slow down growth. Don't get too picky about who you bring into the team, invest instead in <keyword id="6360697" type="COMPANY" weightage="60" keywordseo="training">training</keyword> new hires to fit with the company's vision. Yunus says a method that worked well for him was establishing a reward system among his employees. This united them under a single mission while promoting the company's values.
"Our goals are very clearly stated, and we monitor whether the branches are meeting them through something called Five Star. Each employee is supposed to look after 600 borrowers. If you get 100% repayment from those borrowers, you get a star. If the whole branch achieves 100%, then everyone in the branch gets a star. If you do it for the whole year, you get another star. If your branch is profitable, you get a fourth star. And if the children of the borrowers in your branch are all in school—every single child—you get the fifth star. These are stars you can wear on your chest, like in the military. So you go to work, and you see the star achievement."
Want your business advice featured in <keyword id="1737653" type="UNKNOWN" weightage="60" keywordseo="Instant-MBA">Instant MBA</keyword>? Submit your tips to <a href="mailto:tipoftheday@businessinsider.com">tipoftheday@businessinsider.com</a>. Be sure to include your name, your job title, and a photo of yourself in your email.

INSTANT MBA: Let Your Company Be The Force That Turns New Hires Into Ideal Employees

<img class="gwt-Image" src="/photo/44923172.cms" /> In April this year, Kolkata-based <keyword id="145807" type="COMPANY" weightage="80" keywordseo="Bandhan-Financial-Services">Bandhan Financial Services</keyword> emerged one among the only two entities (the other being IDFC) that were granted in-principle banking licences by the Reserve <keyword id="6355303" type="CITY" weightage="100" keywordseo="Bank-of-India">Bank of India</keyword> after a hiatus of more than 10 years (Yes, no new Indian bank has been formed since 2004 when <keyword id="45660" type="CITY" weightage="100" keywordseo="Yes-Bank">Yes Bank</keyword> launched operations). The fact that Bandhan pipped around two dozen other applicants—including high-profile names such as Reliance Capital, controlled by billionaire Anil Ambani and <keyword id="6398463" type="CITY" weightage="80" keywordseo="Aditya-Birla-Nuvo">Aditya Birla Nuvo</keyword>, part of the Aditya Birla conglomerate—highlighted the government’s focus on providing banking licen1e to players that will ensure financial inclusion, by offering banking services to the bottom-of-the-pyramid group in rural areas who have little or no access to traditional banking services. 
 Granting of banking licence to Bandhan has in fact proved to be a boost to the <keyword id="113684" type="COMPANY" weightage="100" keywordseo="microfinance">microfinance</keyword> industry in the country which has been trying to gain momentum after the crisis in Andhra Pradesh in 2010 when the state government took tough regulatory measures, leading to the closure of many <keyword id="113682" type="ORGANIZATION" weightage="100" keywordseo="MFIs">MFIs</keyword>, after indebtedness to these firms prompted several farmers to commit suicide. 
 
Microfinance, which was non-existent till early seventies, came into being in 1974 when Dr Muhammad Yunus, an economics professor born in Chittagong in Bangladesh (who went on to win the Nobel Peace Prize in 2006), loaned $27 to 42 poor women to pay off loan they had taken from local loan sharks who charged exorbitant interest. That marked the birth of microfinance with the key idea of providing the poor small loans for their micro-enterprises to help them come out of poverty. The growth of Grameen Bank, set up by Yunus to help the poor fight poverty by becoming entrepreneurs, to an institution lending more than $1 billion a year to the have-nots, especially women, has proven that microfinance has a universal social applicability. 
 
The microfinance industry in India witnessed significant growth in the years preceding the global financial crisis in 2008. SKS, which then was the country’s biggest microfinance firm with a $1.2 billion loan book, went public in July 2010. The $350 million offering was oversubscribed more than 13 times. But just a few months after SKS’ public offering, the AP microfinance crisis followed and things took an ugly turn. As farmers’ suicides abounded, AP government stiffened rules and all loans distributed in the state were written off, bringing the industry to a grinding halt as AP accounted for the bulk of microfinance lending disbursed in the country till then. 
 After years of muted growth, the industry has started showing signs of renewal, albeit under stricter norms issued by RBI. The investors have started responding to the sector’s renewed vigor. Last year, Indian microlenders raised a combined $470 million from investors such as Morgan Stanley Private Equity Asia and <keyword id="166412" type="COMPANY" weightage="80" keywordseo="International-finance-corporation">International Finance Corporation</keyword>. Pune-based Suryoday Microfinance which raised Rs 27 crore led IFC; Bhubaneshwar-based Annapurna Microfinance which raised Rs 30 crore from Belgian Investment Company for Developing Countries and others and Bangalore-based Grameen Koota which raised Rs 80 crore from MicroVentures Investments are specific examples. Deals worth another $100 million are said to be in the pipeline, initiated by investors who are seeing MFIs as potential banks—the investment today may help them own part of a bank tomorrow—as illustrated by Bandhan. 
 
While investors are bullish, there are those who say that the industry is headed in the wrong director from a social perspective. For decades, microfinance was mainly promoted by activists working for charities and NGOs, driven by a sense of social mission to improve the lot of the poor. But over the last decade, it has transformed into a global enterprise (the global commercial microfinance industry is expected to grow 20 per cent a year in the near future), with a portfolio worth $81 billion driven by profit more than social responsibility. 
 
Also, the increasing interest rates charged by MFIs from impoverished borrowers—though global average interest rate is estimated at 37%, rates are as high as 70% in some markets while in India rates hover around 24-28%--seem to betray one of the key objectives of microfinance—providing small loans to the poor at an affordable cost. 
 
However, going by the constructive and socially responsible role played by Grameen Bank in alleviating poverty in Bangladesh by helping transforming millions of poor into small entrepreneurs, one hopes the bank’s peers in India will follow suit, playing the dual role of agents of social change in fighting poverty while creating wealth through transparent business practices, thus contributing to overall economic growth. 
 
Image credit: indiatimes.com

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3 ways to get started as an investor for as little as $500

Kamran Rosen

Financing the Bottom of the Pyramid

Guest Author

INSTANT MBA: Let Your Company Be The Force That Turns New Hires Into Ideal Employees

Mariana Simoes

Are MFIs Striking A Balance Between Profit And Social Responsibility?

Preetam Kaushik