The best way, in the 21st Century, to invest small amounts of money, is online. It is simple, you spend a lot of time there already and it is easy to deal with transactions in cyberspace with a minimum of expense through transactions.
So where can you stick it? Here’s 6 ways:
1. You can open foreign accounts in some countries that offer far more features for less money than in the US. For example, Hong Hong Shanghai Bank (HSBC) allows you to hold money in up to 9 currency accounts at no extra charge. You can also set up very simple spreadsheets to monitor fluctuations in currency and simply shift small amounts of money back and forwards. One friend did this with an initial investment of a few thousand dollars and had made over $30 000 by the end of the year for about 15 minutes work a day. Financial institutions do a more sophisticated form of this every day to make money from short term money markets in various countries.
2. Buy stocks directly online. Many services allow very cheap stock transactions and a wide variety of analysis tools for free! This also avoids expensive management fees.
3. Use fee-free internet only accounts. They cost nothing and offer higher interest rates.
4. Find a niche in E-bay and monitor prices. A few really cheap deals can be turned around almost instantly for profit.
5. Invest in overseas stock markets directly. Some countries have stronger booms when yours is fairly flat and may be freer in terms of restrictions and fees. In some cases, if the money is never brought into your country it isn’t even taxable. Check with your accountant about this.
6. Buy cheap books from online clearance houses, have them delivered and re-sell them at markets, yard sales or on Ebay. I bought a stack in 1999 for between 50c and $2 on Amazon and can get ten times the price selling on Ebay or in second-hand bookstores.
Most of these methods can be started for less than $100 and can store proceeds online, without having to bring them into your tax jurisdiction. When you need to spend online, you can simply take out of your profits (which could be stored on a central Paypal Account (or similar) as required.