[Closed] Getting a return on a small amount of money

I know in Canada, a person could do well investing in ‘penny stocks’, but that doesn’t seem to be a thing here.

Or they could lose everything, pretty much instantly.

How long do you intend to keep the £500? What's your attitude to risk (i.e. are you willing to lose the £500 for a chance of a better return)?

Gold

Admittedly you wont get much for £500, and it could take a while for it to get any sort of return, but it wont go down in price really and your 500 will always be worth at least 500 adjusted for inflation.

I suppose its more a long term investment thing.

There's still plenty of volatility in the markets so you could pick a FTSE 100/250 stock and potentially get a decent return (OR LOSS) over a year or two. Or pick something that pays a decent dividend. Or get premium bonds and enjoy the monthly excitement of not winning £25.

For an easy option, if you have PayPal buy bitcoin through the app. Dead simple, can see it/track it in the app and ultimately sell it via the app. There’s a transaction fee so don’t want to be taking it out in dribbs and drabs once you buy em. It goes up and down but if you buy on a dip sinking as you can leave it for the inevitable upsurge (prob when Elon does/says something 😂)

I know in Canada, a person could do well investing in ‘penny stocks’, but that doesn’t seem to be a thing here.

You may as well play the gambling machines in your local betting shop - probably better odds!

Limited run Lego.

Reckon you'll double your investment on the BttF DeLoren when it goes out of stock everywhere (if it hasn't already).

Put it on the horses, or whatever else takes your fancy.

True story: I have placed precisely one bet in a proper betting shop, on an event where I had a certain amount of direct knowledge and though I didn't think the result was a foregone conclusion I did think the odds were very generous for a two horse (ok, boat) race. I turned 20 quid into 50. In fact I think I turned it into 70, ie 50 profit. Well 43 after 10% tax.

Limited run Lego

This, but get it in a sale if you can to maximise profits. Modular buildings are always a good earner as are the larger Technic sets. I have a 1989 Batmobile which I got as an investment and it's now worth just over double what I paid.

Gilts.

I have a 1989 Batmobile which I got as an investment and it’s now worth just over double what I paid.

As in you bought it in 1989? A pound in 1989 would be worth £2.69 now so your lego would have lost value. Your lego investment would have to have nearly tripled in price just to hold its value. If you'd just put the quid in a high street savings account the balance would be nearer £5 now

As in you bought it in 1989?

Nope, I see now that to the untrained eye it was an ambiguous description. Set #76139 is the Batmobile from the 1989 Tim Burton Batman movie but was only retired in late 2021 having been on the market for a couple of years.

Put it all on Red 👍

Err….

Black …… I meant Black …..

Have a look on seedrs which is a bit like Dragons' Den and pick an investment opportunity you have some knowledge of.

Pay it into your pension and get an immediate 20/40% tax relief on it and then someone qualified (ideally!) makes it grow until you retire.

You’ll get more bang for your bucks with the default answer to any money related question: C&H

Honestly, just avoid anything like stocks and shares. Only brokers make money out of that stuff.

Get something you have an 'edge' on. By that I mean if you are a carpenter by trade, buy some nice wood and build a piece of furniture.
If you work in a warehouse, do a forklift course etc etc.

Basically, invest in yourself (nobody else will) or something you know about or are good at.
It will pay you back later.

Put it all on Red 👍

Err….

Black …… I meant Black …..

and then it lands on....

I'd go Ethereum (Revolut could be easiest) if you're prepared to lose it but stand a decent chance of multiplying it a few times in next year or two.

Open a Vanguard ISA and invest in a Lifestrategy 100 within it. It’s a tax free gain and stocks are low / volatile currently, so you may see a 5-7% tax free return in the next couple of years.

Or better still the same in a Vanguard SIPP as above advice re pensions.

Donate to the Tory party and improve the life of everyone in the UK?

Do a deal with the local drug dealer.. then cut it on the kitchen table with some like "powder"

Bag it and double your cash.. what could possibly go wrong?

Rinse and repeat... you will have a Black Beemer in a week.

Hang on sittomj has the best option... £500 donation should get you a £5 million PPE contract?

. . . and a peerage. (If you’re lucky 🇷🇺) 😉

Honestly, just avoid anything like stocks and shares. Only brokers make money out of that stuff.

Ok then 🙂

Bitcoin or Ethereum through an exchange like Binance, no brainer. I wouldn't buy through Paypal or Revolut.

No risk = no return (unless you have some very trustworthy info to reduce the risk).

With £500 I'd just buy some premium bonds and cross my fingers.

Donate to the Tory party and improve the life of everyone in the UK?

This, and wait for your PPE contract to land.

Fascinating to see the diachotomy in sentiment towards trading/investing in crypto vs stocks, particulary because the favour lies with cryto when stocks are are better option for most. Can only think that this is a result of the UK having such well established financial services/brokering industries who have suceeded in perpetuating this myth that buying stocks is akin to gambling and should only be done by qualified professionals with a lifetime of experience. It's utter plumbs. But (amazingly) nobody seems to have this attitude to crypto which is probably because it is novel and outside the scope of the traditional finance industries. Ironically the entire crypto market (including all shitcoins) is currently just a gamble on the question of whether or not BTC is going to make it into general adoption - how is that a better investment than buying a company based deductive reasoning of current real world facts?! (spoiler alert... it's not. The risk is massive and the reward is completely unknown).

Anyway, to answer your question OP you need to start trading stocks via an ISA. Most of the UK penny stocks are listed on the AIM index, although there are plenty on the main LSE. Penny stocks are more volatile but good results can also be had on with larger caps. Have a looks at lse.co.uk and uk.advfn.com for chat/info about different companies. My advice would be to get your hands on some books, learn the basis of charting, read the buisness news, have a look on Twitter because there is a whole finanical sub world on there, just generally get stuck in. Start small, but don't be put off by what folk on here say. There is money to be made and it's definitely not akin to punting on horses. Don't want to sound like a nob but I have (quite literally) achieved financial security beyond my wildest dreams, as have a great many other people. I would encourage anyone get into trading stocks, not only can it be financially rewarding but if you are a bit of a generalist with an enquiring mind that it makes a great hobby too. You only need to look at the daily 'top risers' section on lse.co.uk to get an idea of the possibilities e.g. Card factory (#CARD) is up 30% this morning so that's an easy 10% trade in the space of a couple of hours...

Don’t want to sound like a nob but I have (quite literally) achieved financial security beyond my wildest dreams

Do you need an apprentice?

I'm desperate to get off the treadmill. Currently my only way out is a lottery win or death.

But seriously, do you have a recommended reading list as a starting point?

Ironically the entire crypto market (including all shitcoins) is currently just a gamble on the question of whether or not BTC is going to make it into general adoption

Really? And exactly what is this general adoption everyone is waiting for?

what is this general adoption everyone is waiting for?

I think he means when it becomes equivalent or near equivalent to money, where it can be generally used as payment for goods and services.
I doubt this will happen soon.
Jamz speaks the most sense on here, investing in crypto is crackers unless you have a huge appetite for risk.
I also have financial independence, mine came from some lucky investments in property and some poor investments in the family business that eventually has come good. In hindsight I wish I had just played the stock market with some safe and some risky options as I would have got a lot richer faster and its a lot less stressfull than running a business.
I'd start with "dogs of the dow" or "dogs of the ftse".
I have 50% of my portfolio on a modified dogs of the ftse structure spread across ISA and personal holdings.

Dogs of the dow wiki

Quietly saving dogs of the ftse

But (amazingly) nobody seems to have this attitude to crypto

Most normal people think crypto is a dodgy AF bubble/ponzi scheme.

Don't be fooled by the vociferous enthusiasts, they are not everybody.

Most normal people think crypto is a dodgy AF bubble/ponzi scheme.

+1

And that's being polite!

My retirement will be entirely funded by stocks and shares....

I wouldn’t buy through Paypal or Revolut.

Why not, just out of interest?

Jamz speaks the most sense on here, investing in crypto is crackers unless you have a huge appetite for risk.

I thought GQ's comment above was more pertinent. No risk = no return.

Most everyone on the planet wants to turn money into more money. This is clearly unattainable or we'd all be rich and the actual value of wealth would be through the floor.* The only way investments work is, well, gambling, it's a managed risk. This is how pensions work, I'll give you some money and you give it back to me in 40 years' time hopefully worth more. The greater the risk the greater the reward and the greater the likelihood of it going pear-shaped, do you back the favourite horse at odds-on or the 100-to-1 outsider?

The people like Jamz who do make money are outliers, they've turned in into a hobby / job and understand what they're doing. Realistically, how many of us are going to invest £500 and then take it out again 2 hours later, rinse and repeat. People like Jamz don't have £500 on the 10-1 shot at Aintree or five sixteenths of a Bitcoin, they have a portfolio.

Myself, I've never 'invested' in anything simply because I can't afford to lose it. If I had £500 that I had nothing better to do with other than try to make money, I'd probably throw it at my mortgage.

(* - Some may argue, this might not be a bad thing.)

understand your own attitude to risk. higher risk = higher return (or loss).
no risk = nill return.

ignore anyone who trys to sell you a get rich quick scheme or says stockmarkets are risky..

£500, i'd be looking at adidas city series / nike retro runners / limited edition nike jordan's / bike parts or UK stocks like lloyds (1k shares, divs of 2-3p a share pa) or rollsroyce (500 shares) or coca cola ftse100 trading at £25-26 before ukraine war, now £16.5, £2 up from low.
and forget about them.
Note: i have a medium-high level of risk seeking on certain stocks, like the above..
only invest if prepared to lose..

If i'd had £500 last week i'd have bought some marmite V4 brake sets, only recently launched @ £10 a pop .. big THUMBs Up to wiggle :0)

Cougar and whatyoudoinsucka, we are all talking about the same thing.
I said, in ref to crypto, "huge appetite" for risk, emphasis on the huge. You have to take some risk to get the reward as you said.
Bank - virtually no risk, tiny reward
Dogs program - lower risk, lower reward
Bitcoin - huge risk, huge reward
You decide. However even if I had £500 or £10k to throw away I doubt I'd invest in crypto.
The history of the dogs of the dow program is something like 18% annual return in the last 30 years. I am not saying its no risk but its quite a safe investment over 5 years compared to crypto.
I don't think Jamz is investing every 20 mins in his ISA, in my ISA I change my stocks monthly, sometimes weekly, some I have held for years, but in the dogs program its once a year.

i'd not heard of the dog strategy @5plusn8 i like it.

it seems to be the strategy i've taken on ftse100, oil/banks, massive hits from covid but have somewhat recovered and pay quarterly/semi annual divs.
although been diversifying recently.

for long term saving a SIP cant be beaten, 25% cashback on investments instantly, (+ more on a tax return for High Rate income tax earners). but 57 may be a long way off for some

I’ve just set up a Plum account as I’m useless at saving and the automatic deposit thing seems like a good idea and they have a broad range of portfolios from very low to very high risk.

If I had £500 right now to invest and didn’t need it for a few years I’d just bang it into my Plum portfolios to get them going and then continue to drip bits in here and there.

I’d probably spend it on something frivolous. But if I really wanted to get a monetary return and didn’t need the cash soon then putting it into a tracker fund pension* would be my first choice. Like folks said, immediate 20-40% gain from tax relief plus a few % gain compounded over a few years.

*one of my pensions has a bunch of various funds. If I had to pick only one then it’d be a mostly US tracker.

I know in Canada, a person could do well investing in ‘penny stocks’, but that doesn’t seem to be a thing here.

You can do this here. My dad has done and made a lot of money out of it. Starting with not much more than you have he was at one point getting 400% a year returns. It was however a hobby for him and he spent a lot of time doing research. He also still holds some shares that cost him hundreds and are now worth nothing.

@dannybgoode - I'm being thick here, what's a Plum account and how does that work?

what’s a Plum account

It invests all your money in plums. Not sure the exact weighting between Japanese plums and European plums.....

@footflaps 😂
Sadly it seems a Plum account is a savings account with extra branding. And some features to encourage saving. https://withplum.com/savings/

Edit - the rainy day feature would leave me without much spending money but a healthy savings balance what with living in manchester.

I’m desperate to get off the treadmill. Currently my only way out is a lottery win or death.

But seriously, do you have a recommended reading list as a starting point?

There is loads of stuff online, youtube is a good place to start - Tim Bennett has loads of explainers on various channels, 'moneycontent' being one. Have a look at Anthony Crudele's channel, that's quite good. Be aware, there is a lot of crap on youtube, but there is plenty of good stuff too. All of the online brokers will have free education sections on their websites covering all the basics and more - look at ii.co.uk, ig.com, hl.co.uk etc. Then you've got the investment magazines and buisness news. As for books, well there are millions, just find cheap second hand ones and read as many as you can, my favourite are the 'Market Wizards' series (all of them) - they are interviews with top traders/invester and they won't teach you how to trade but the are invaluable for showing you the possibilities. Michael at shiftingshares.com has some great free ebooks - he follows a similar style of trading to me and that is probably the most relevant for anyone in the UK looking to make money off short term trades on UK stocks. He is also on Twitter, as are many other investment professionals/traders so get Twitter and follow them. You don't need to pay for any courses, it's all out there if you look hard enough/read lots.

The main thing to be aware of is that there are innumerable ways to make money in the financial makets, and therefore there are innumerable different people espousing their method, all with slightly different aims and risk tolerances. You have to find what works for you, which is best done by immersing yourself in the space and then trial and error. Don't take any one person's word as gospel, don't take everything as being true in all instances, read widely and experiment. Many of the previously mentioned brokers will have the ability to create a demo account which I would encourage you to do before you play with real money. Look for a standard share dealing account i.e. no leverage, no CFDs or spreadbetting. You can start buying as small as you like (share price allowing) so don't be put off by starting small. Worth noting that I started with a stocks and share ISA and that is a great way to trade stocks. You can hold for as little time, or as much time as you like. I sometimes hold a trade for only a few hours, but more often it will be days/ weeks or sometimes months.

I think most people have the ability to make money in the stock market, provided they approach it in the right way, which most do not... You do need to commit and put the work in, i.e. accept the that first few years will be training on the job, just like in any other profession. You need to have the ride mental attitude, i.e. you can't be emotionally attached to the trading money - losses are the price of your training, and the price can be very high (read market wizzards and you will see that), and of course there's no guarantee that you will have the fortitude needed to stay the course (watch 'Millon Dollar Traders' on youtube). But, you won't know until you try, and obviously the rewards and can be fantistic if you suceed.

I think comparisons to instiutions/funds/pensions/whatever are a bit pointless. IMO the greatest strength of the private investor is the ability to get in and out of a position whenever they like. If you want to make decent money you need to use this advantage (or else you have to be the next Warren Buffet, and the odds are not in your favour...) Making money over the longer term (6 months +) can be much harder, not least because you never know what headline is round the corner. Snatching 10-30% trades over the course of hours/days/weeks is much easier, and it's not something that a pension fund can do. It won't suit everyone though, so like I said, you have to experiment and find what suits you and your circumstances.

Plum also has an investing side, not just savings and has a multitude of different portfolios and funds across the risk range.

It depends on how you set it up as well as to how it saves. At its core it will use AI to dip into your current account and take a few pounds here and there and invest it automatically in your chosen funds or just squirrel it away into a savings account.

Then on to you can have a set amount taken out say on pay day and can also make ad hoc payments and again you choose whether that money or invested or saved.

The attraction to me is I’m crap at dancing but I’m hoping if the money leaves my account before I spend it on shit and shove it somewhere where it requires a modicum of effort to get it back out I may get a little fund going.

So far it seems pretty good and each time I am about to by something I don’t really need I stop myself and put the same money I was about to spend into my Plum account instead. I only started a couple of weeks ago and have already put £40 aside. Not life changing I know but hopefully over 2-3 years it’ll start to grow into a useful little pot.