How to Invest $5,000 in 2026

You’ve got $5,000 to invest, and you’re wondering where to put your money for the best return. Though it isn’t enough to retire on, $5,000 is plenty to build a strong foundation for your investment portfolio.

How you invest your money largely depends upon your goals and risk tolerance. Below are five investment options to consider, plus how to think about sequence and what to do with your $5,000 before deploying it. All return figures and contribution limits are current as of June 2026.

Before you invest: The order of operations

Before you invest that $5,000, there are some money moves you should first consider:

• Build an emergency fund. An emergency fund is there to cover you in case you suddenly lose your source of income or incur a major financial setback. Many experts say to save three to six months of necessary expenses in a high-yield savings account, where rates are typically between 3% and 4.5% APY as of June 2026.
• Establish a rainy day fund. A rainy day fund is a smaller version of the emergency fund and is meant for small, unexpected expenses, like a new appliance or car repair. This amount could be anywhere from $500 to a couple thousand.
• Pay off debt. If the interest you’re paying on your debt is more than the return you can make on your investment, you’re losing money. The Federal Reserve’s most recent G.19 release puts the average APR on credit card accounts assessed interest at 21.52% in Q1 2026, well above expected returns from most investments.⁽¹⁾ If you don’t want to wait until you’re entirely debt-free to start investing, at least consider paying off your high-interest debt, like credit cards, first.
• Hit other savings goals. If you’re planning a vacation or a major purchase in the next three years, consider putting that $5,000 into a high-yield savings account instead of the market.

5 best ways to invest $5k in 2026

1. Buy stocks

Why it’s a good option now: If you’ve maxed out your retirement accounts or just want to use that $5,000 to try your hand at trading stocks, consider opening a taxable account with a broker. Your money won’t be locked up until retirement, and many brokers run valuable promotions for new customers.

For instance, apps like Robinhood and Webull offer promotions like free stocks for new users. Check for any freebies when you pick the right broker for you.

That said, individual stock-picking is harder than it looks. S&P DJI’s most recent year-end SPIVA Scorecard found 79% of actively managed large-cap US equity funds underperformed the S&P 500 in 2025, and over 15 years no US equity category had a majority of active managers beat their benchmarks.⁽⁴⁾ For most $5,000 investors, a broad index ETF like Vanguard’s VTI (0.03% expense ratio) is the simpler and statistically better-performing choice.⁽⁵⁾

What to watch out for: Brokerage accounts are taxable. You’ll have to pay taxes on any dividends or interest earned during the year. You’ll also have to pay capital gains tax on any earnings when you sell a security. The amount of tax you’ll need to pay on capital gains depends on how long you owned the investment.

Investments held for less than a year are taxed as ordinary income. Investments you’ve held for longer than a year are taxed at 0%, 15% or 20% depending on your taxable income and filing status.⁽⁶⁾

2. Buy cryptocurrencies

Why it’s a good option now: Cryptocurrency has gone increasingly mainstream since regulators approved spot Bitcoin ETFs in January 2024. Bitcoin (BTC) reached an all-time high above $126,000 in October 2025, and spot Bitcoin and Ethereum ETFs now trade on regulated US exchanges — meaning you can get crypto exposure inside a standard brokerage or retirement account without a separate wallet.⁽⁷⁾

Investing in cryptocurrency can be a good option if you want exposure to the global demand for digital currency, but treat any crypto allocation as money you can afford to lose. At $5,000, a reasonable cap is 5-10% of your investment — that’s $250-$500.

What to watch out for: Cryptocurrency is extremely volatile. Bitcoin (BTC) has experienced multiple drawdowns of more than 50% since 2021, and prices can swing significantly over short periods. Outside the regulated ETF wrapper, the crypto market also faces ongoing regulatory uncertainty, exchange risk and scams. If you hold crypto directly and forget your private keys, you could lose your holdings entirely.

3. Earn interest with a high-yield savings account

Why it’s a good option now: Interest rates on high-yield savings accounts have risen substantially over the past few years. As of June 2026, top online HYSAs are paying between 3% and 4.5% APY — far more rewarding than the rates you’d find at a traditional brick-and-mortar bank.

If you’re looking for a safe, liquid place to store your $5,000 while earning decent interest on your money, a high-yield savings account might be a good option. At 4% APY, $5,000 generates about $200 a year — risk-free.

What to watch out for: HYSA rates are variable and track loosely with the federal funds rate, which is set by the Federal Open Market Committee. If the Fed cuts rates, your HYSA APY is likely to follow within weeks. For a fixed rate, consider a CD instead — but you’ll lock up your money for the CD’s term in exchange.

4. Invest in a traditional IRA

Why it’s a good option now: A traditional IRA comes with tax advantages and more freedom over how you choose to invest your money compared to a 401(k). Like a 401(k), you can still invest in ETFs and mutual funds, but you can also invest in bonds, FDIC-insured CDs and individual stocks. An IRA is still a retirement account, but you don’t need an employer to have one.

Contributions you make to a traditional IRA are tax-deductible for the year you make them, so you can lower this year’s tax bill with the contributions you make now. The 2026 IRA contribution limit is $7,500 ($8,600 if you’re age 50 or older) per IRS Notice 2025-67, so your entire $5,000 fits comfortably with room to spare.⁽²⁾

It’s also worth considering a Roth IRA, where contributions are made with after-tax dollars but qualified withdrawals in retirement are completely tax-free. For most younger investors with $5,000 to deploy, Roth contributions often make more sense than traditional — you pay taxes now at a likely lower rate than your future rate.

What to watch out for: If you have a 401(k) through work, there are limitations to how much of a traditional IRA contribution you can deduct. And the $7,500 maximum contribution limit could prove too low if you want to make additional investments beyond that $5,000 — at which point you’d want to fund both an IRA and a taxable brokerage account.

5. Check out precious metals

Why it’s a good option now: Precious metals are a way to diversify your portfolio and hedge against inflation and stock market volatility. Gold reached record highs in 2024 and 2025 amid persistent inflation concerns and geopolitical tensions, and silver and platinum followed similar trajectories.

At $5,000, you can take a meaningful position in a gold or precious metals ETF — products like SPDR Gold Shares (GLD) or iShares Gold Trust (IAU) give you direct exposure to spot gold prices without dealing with physical storage. A 5-10% allocation ($250-$500) is a typical sizing for portfolio diversification purposes.

What to watch out for: When investing in physical precious metals, you’ll pay the spot price plus a premium. Since the seller sets the premium, you’ll want to compare premiums from multiple sellers to make sure you’re getting the best value. And to make money on your investment, the spot price will need to increase enough to cover the premium you originally paid plus any costs associated with selling the metal.

Precious metals securities are also subject to fees and commissions, though most major gold ETFs now charge under 0.25% annually.

Sample portfolio allocations by risk profile

The following are illustrative frameworks, not personalized financial advice. Your actual allocation should reflect your complete financial picture, tax situation and goals. At $5,000, simplicity matters more than precision — a single broad-market index fund or target-date fund inside an IRA is a perfectly valid starting point.

Conservative (capital preservation, shorter time horizon)

Moderate (balanced growth and stability, 10+ year horizon)

Aggressive (maximum long-term growth, 20+ year horizon)

How much could $5,000 grow?

With $5,000 you can start spreading your money between different asset classes, which offer different average returns but also different risks. The figures below use historical average returns as a reference point — they’re projections, not guarantees.

Assumes lump-sum investment at the start of the period with no additional contributions. Returns are nominal (pre-inflation). The ~10% figure reflects the S&P 500’s long-term historical average return with dividends reinvested.⁽⁸⁾ Bond returns vary widely based on bond types, and the stock market has down years while individual stocks can go to zero. So consider these benchmarks only and consider risk as well as return.

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• Use a demo account to practice before investing
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• Trade stocks, options, ETFs and mutual funds
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• Automated investing available

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The probability of a member receiving $3,000 is 0.028%. If you don’t make a selection in 45 days, you’ll no longer qualify for the promo. Members must fund their account with a minimum of $50.00 to qualify. The probability percentage is subject to decrease. Members are only eligible for the Stock Award promotion upon opening their first brokerage account; subsequent cash brokerage accounts are ineligible for the promo, including for members with multiple accounts.

Terms and conditions apply*. For 401k rollovers, existing SoFi IRA members must complete 401k rollovers via this link For SoFi members without a SoFi IRA, a SoFi IRA must first be opened, and 401k rollover must be completed utilizing Capitalize via this link. SoFi and Capitalize will charge no additional fees to process a 401(k) rollover to a SoFi IRA. SoFi is not liable for any costs incurred from the existing 401k provider for rollover. Please check with your 401k provider for any fees or costs associated with the rollover. For IRA contributions, only deposits made via ACH and cash transfer from SoFi Bank accounts are eligible for the match. Click here for the 1% Match terms and conditions.

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Important information

Tax strategy: keeping more of what you earn

At $5,000, tax efficiency is less complex than at higher capital levels — but a few simple habits set up to compound for decades:

• Use a Roth or traditional IRA first. This is the single biggest tax move at $5,000. Every dollar inside an IRA shelters years of dividends and capital gains from current taxation. With the 2026 IRA limit at $7,500, your entire $5,000 fits inside.
• Hold investments for more than one year. Long-term capital gains are taxed at 0%, 15% or 20% depending on income, significantly lower than ordinary income tax rates that apply to short-term gains.⁽⁶⁾
• Avoid frequent trading. Every sale of a profitable position triggers a taxable event. Buy-and-hold index investing generates very few taxable events compared to active trading.
• Don’t worry about advanced strategies yet. Tax-loss harvesting, direct indexing and asset location decisions add real value at larger portfolio sizes. At $5,000, simplicity is more valuable than optimization.

Common mistakes to avoid

• Not starting. The biggest mistake at $5,000 is letting analysis paralysis stop you from investing at all. Time in the market beats timing the market — Vanguard research found that lump-sum investing outperforms dollar-cost averaging about two-thirds of the time over long horizons.⁽⁹⁾
• Chasing hot stocks or meme trades. Social media is full of “this stock is going to 10x” pitches. The vast majority don’t, and concentrated bets on hot names are how new investors lose money fastest.
• Paying excessive fees. Even small fees matter at $5,000. A 1% expense ratio versus 0.05% compounds into meaningful opportunity cost over decades. Always check expense ratios before buying a fund.
• Skipping the IRA. Investing your $5,000 in a regular taxable brokerage account instead of an IRA leaves long-term tax-deferred or tax-free growth on the table.
• Overallocating to crypto or precious metals. Both have a place in a diversified portfolio, but together they should typically be no more than 10-15% of your total — that’s $500-$750 at this level.
• Selling during downturns. The S&P 500 has experienced multiple drawdowns of 20% or more in recent decades — most recently in 2022, with previous instances during 2020, 2008-09, 2000-02 and 1973-74.⁽⁸⁾ Investors who panic-sell lock in losses and typically miss the recovery.

Alternative investments

If these options aren’t where you want to park your $5,000, here are two alternative investments to consider:

• Robo-advisors. Robo-advisors like Betterment or Wealthfront can be a good choice for anyone who wants to take a hands-off approach to investing. Most charge a small advisor fee (typically around 0.25% annually), but since they’re usually automated, this fee is often a fraction of the cost of a professionally managed portfolio.
• Real estate. Investing in real estate is easier than ever with platforms like Fundrise, Willow Wealth and RealtyMogul. Fundrise’s minimum starts as low as $10, with low annual fees. By law, real estate investment trusts (REITs) must distribute at least 90% of their taxable income to shareholders as dividends to maintain their pass-through tax status.⁽¹⁰⁾

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Finder Score	Available asset types	Stock trade fee	Minimum deposit	Cash sweep APY
Promoted 9.4 Excellent Webull	9.4 Excellent	Stocks, Bonds, Options, ETFs, Futures, Money market funds	$0	$0	3.35%	Get 12 free shares by joining Webull. Select Go to site, then make a first deposit of $100 or more to get 10+2 free shares, each worth $3-$300, randomly drawn from the pool of NVDA, TSLA, SPCX and AAPL, minimum $36 in the pocket, plus 1-month complimentary Webull premium. T&Cs apply. + Finder Rewards: Yes, you get all this PLUS a $160 digital Visa gift card from Finder! T&Cs apply.	Trade stocks, ETFs and equity options commission-free, with access to futures, advanced charting tools, a robo-advisor and event trading powered by Kalshi.	Important information *Free shares will be validated in 10 days and no withdraw is allowed during this period. Partner deal only, sign up and join via non-affiliate link shall only receive 10 free shares	$160 REWARD Go to site View details	loading
Promoted 9 Excellent SoFi Active Invest	9 Excellent	Stocks, Options, Mutual funds, ETFs, Alternatives	$0	$0	0.01%	Limited time: Get up to $3,000 in stock when you open and fund a new account. Offer expires October 18, 2026. T&Cs apply. + Finder Rewards: Get this PLUS a $150 digital Visa gift card when you join Finder, open a new SoFi Active Invest account and make an Eligible First Deposit of $1,250 or more within 5 days of clicking the Finder link. Offer ends on October 31, 2026. T&Cs apply.	Trade stocks, ETFs, and options with zero commissions, invest in IPOs or automate your portfolio, with exclusive perks available through SoFi Plus.	Important information INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE Other fees, such as exchange fees, may apply. Please view our fee disclosure to view a full listing of fees. Investing in alternative investments and/or strategies may not be suitable for all investors and involves unique risks, including the risk of loss. An investor should consider their individual circumstances and any investment information, such as a prospectus, prior to investing. Interval Funds are illiquid instruments, the ability to trade on your timeline may be restricted. Brokerage and Active investing products offered through SoFi Securities LLC, Member FINRA (www.finra.org) /SIPC(www.sipc.org). There are limitations with fractional shares to consider before investing. During market hours fractional share orders are transmitted immediately in the order received. There may be system delays from receipt of your order until execution and market conditions may adversely impact execution prices. Outside of market hours orders are received on a not held basis and will be aggregated for each security then executed in the morning trade window of the next business day at market open. Share will be delivered at an average price received for executing the securities through a single batched order. Fractional shares may not be transferred to another firm. Fractional shares will be sold when a transfer or closure request is initiated. Please consider that selling securities is a taxable event. Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire investment Before trading options please review the Characteristics and Risks of Standardized Options Utilizing a margin loan is generally considered more appropriate for experienced investors as there are additional costs and risks associated. It is possible to lose more than your initial investment when using margin. Please see https://www.sofi.com/wealth/assets/documents/brokerage-margin-disclosure-statement.pdf for detailed disclosure information SoFi Plus members can schedule an unlimited number of appointments with a financial planner during periods in which the SoFi Plus member meets the eligibility criteria set forth in section 10(a) of the SoFi Plus Terms and Conditions. SoFi members who are not members of SoFi Plus can schedule one (1) appointment with a financial planner. The ability to schedule appointments is subject to financial planner availability. SoFi reserves the right to change or terminate this benefit at any time with or without notice. Advisory services are offered by SoFi Wealth LLC, an SEC-registered investment adviser. Information about SoFi Wealth's advisory operations, services, and fees is set forth in SoFi Wealth's current Form ADV Part 2 (Brochure), a copy of which is available upon request and at www.adviserinfo.sec.gov. The probability of a member receiving $3,000 is 0.028%. If you don’t make a selection in 45 days, you’ll no longer qualify for the promo. Members must fund their account with a minimum of $50.00 to qualify. The probability percentage is subject to decrease. Members are only eligible for the Stock Award promotion upon opening their first brokerage account; subsequent cash brokerage accounts are ineligible for the promo, including for members with multiple accounts. Terms and conditions apply*. For 401k rollovers, existing SoFi IRA members must complete 401k rollovers via this link For SoFi members without a SoFi IRA, a SoFi IRA must first be opened, and 401k rollover must be completed utilizing Capitalize via this link. SoFi and Capitalize will charge no additional fees to process a 401(k) rollover to a SoFi IRA. SoFi is not liable for any costs incurred from the existing 401k provider for rollover. Please check with your 401k provider for any fees or costs associated with the rollover. For IRA contributions, only deposits made via ACH and cash transfer from SoFi Bank accounts are eligible for the match. Click here for the 1% Match terms and conditions. Must be a SoFi Plus member at the time a recurring deposit is received into your SoFi Active or Automated investing account to qualify. Bonus calculated on net monthly recurring deposits made via ACH and paid out as Rewards Points. See Rewards Terms of Service. SoFi reserves the right to change or terminate this promotion at any time without notice. See terms and limitations. https://www.sofi.com/sofiplus/invest/#disclaimers	$150 REWARD Go to site View details	loading
Promoted 8.2 Great eToro	8.2 Great	Stocks, Options, ETFs, Cryptocurrency, Investments	$0	$0	3.25%	Get up to $500 in free assets plus up to $300 in crypto when you open, verify and fund a new account. Bonus amounts depend on your deposit. T&Cs apply. + Finder Rewards: Get this PLUS a $200 digital Visa gift card when you join Finder, open a new eToro account and deposit at least $300 into your account. Offer ends on October 30, 2026. T&Cs apply.	No commission stock, ETF and options trades, with 3.25% interest on your options account balance and no options contract fees. See full disclosure.	Important information eToro securities trading offered by eToro USA Securities, Inc. (‘the BD”), member of FINRA and SIPC. Investing involves risk, and content is provided for educational purposes only, does not imply a recommendation, and is not a guarantee of future performance. Finder is not an affiliate and may be compensated if you access certain products or services offered by the BD. eToro USA LLC and eToro USA Securities Inc.; Investing involves risk, including loss of principal; Not a recommendation	$200 REWARD Go to site View details	loading
9 Excellent Public.com	9 Excellent	Stocks, Bonds, Options, ETFs, Cryptocurrency, Treasury Bills, High-yield cash account	$0	$0	3.30%	Earn a 1% match on IRA contributions and rollovers. Must stay 5 years to avoid a clawback fee	Build a diversified portfolio of stocks, bonds, options, ETFs and crypto, with a high-yield cash account and options contract rebates.	Important information High-yield cash account 3.30% APY as of 06/11/2026.	Go to site View details	loading
9 Excellent Moomoo	9 Excellent	Stocks, Options, ETFs, Cryptocurrency	$0	$0	3.35%	Up to $1,000 in Nvidia stock plus 8.1% APY on uninvested cash for 2 months, then it reverts to 3.35% APY. T&Cs apply.	No commission stock, ETF and options trades, with $0 equity options contract fees, low margin rates and advanced trading tools.	View details	loading
9.4 Excellent Robinhood	9.4 Excellent	Stocks, Options, ETFs, Cryptocurrency, Futures, Event contracts, High-yield cash account	$0	$0	3.60%	Trade stocks, options, crypto and more, with advanced trading tools, fractional shares and exclusive perks for Gold members.	View details	loading
8.4 Great J.P. Morgan Self-Directed Investing	8.4 Great	Stocks, Bonds, Options, Mutual funds, ETFs, Treasury Bills	$0	$0	0.01%	Get a cash bonus up to $1,000 when you open and fund a J.P. Morgan Self-Directed Investing account. T&Cs apply.	Get $0 commission online trades.	Important information INVESTMENT AND INSURANCE PRODUCTS ARE: NOT A DEPOSIT • NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE	Go to site View details	loading
8.2 Great Zacks Trade	8.2 Great	Stocks, Bonds, Options, Mutual funds, ETFs, CDs	$0.01	$250	2.83%	Leverage powerful trading tools and low margin rates to trade stocks, options, ETFs, mutual funds and bonds.	Go to site View details	loading
9 Excellent Acorns	9 Excellent	Stocks, ETFs	$0	$0	N/A	Get a $20 bonus when you set up an account and make your first recurring investment (min. $5). T&Cs apply.	Automate investing with recurring contributions starting at $5 and invest spare change from everyday purchases.	Go to site View details	loading
7.8 Great Kraken	7.8 Great	Stocks, ETFs, Cryptocurrency, Forex	$0	$0	N/A	Up to 2% bonus on stock transfers until January 31, 2026. See full terms and conditions here. ⠀	Important information Currently available in the U.S. only; may not be available in all states. Brokerage services are provided by Kraken Securities LLC, member FINRA/SIPC. Please view the firm’s profile, registration and background of our registered reps on https://brokercheck.finra.org/. Digital asset services offered by Payward Interactive Inc., (NMLS ID:1843762) a FINCEN registered money services business, not a member of FINRA/SIPC and not FDIC insured. This is not an offer, solicitation, inducement or advice to buy or sell securities, or open a brokerage account in any jurisdiction where Kraken Securities is not registered. All trading involves risk, including loss of your investments. View full disclosures at: Equities Disclosures and Crypto Risk Disclosures. *Other fees may apply.	Go to site View details	loading
7.4 Great Stash	7.4 Great	Stocks, ETFs	$0	$0	0.1%	Get $5 when you sign up and deposit $5. T&Cs apply.	Bank, automate your portfolio or invest in individual stocks and ETFs for as low as $3 per month.	Important information Investment advisory services offered by Stash Investment LLC, a SEC registered investment advisor. Investing involves risk and investments may lose value. Holdings and performance are hypothetical. *Offer is subject to T&Cs	Go to site View details	loading
9 Excellent Wealthfront	9 Excellent	Stocks, ETFs, High-yield cash account	$0	$500	3.30%	Get a $50 bonus when you sign up and fund a taxable automated investing account with at least $500. T&Cs apply.	Automate your stock and bond portfolio or trade individual stocks for as little as $1 apiece. Plus, earn 3.50% APY on your cash.	Go to site View details	loading

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Bottom line

Investing $5,000 is less about finding the single best investment and more about building habits that compound for decades. Clear high-interest debt, fund an IRA up to the $7,500 limit, invest in a diversified mix of low-cost index funds, and consider modest exposure to crypto, real estate or precious metals if you have the appetite for it.

The biggest advantage at $5,000 usually isn’t the dollar amount — it’s the time you have left for compounding to work. $5,000 invested today at 10% grows to roughly $87,000 in 30 years without a single additional contribution.⁽⁸⁾ Adding modest monthly contributions on top accelerates that materially.

Frequently asked questions

• Is $5,000 enough to start investing?

  Yes. With commission-free trading, fractional shares and ETFs with expense ratios under 0.05%, the practical barriers to investing $5,000 have effectively disappeared. The bigger question is whether you'll keep adding to it over time — consistency matters more than starting capital.

• What's the safest way to invest $5,000?

  For capital you can't afford to lose in the near term, FDIC-insured high-yield savings accounts (currently paying 3% to 4.5%) and US Treasury securities are the safest options. For long-term capital, broad index funds provide the best risk-adjusted returns over extended periods, though they carry short-term volatility.

• Should I invest $5,000 in stocks or an IRA?

  You can do both — investing in stocks inside an IRA combines the tax advantages of the account with the long-term growth potential of equities. For most younger investors, opening a Roth IRA and holding a broad index ETF inside it is the most tax-efficient setup at this capital level.

• How much can $5,000 grow in 10 years?

  At a 10% average annual return (approximating the historical S&P 500 average⁽⁸⁾), $5,000 grows to roughly $12,969 in 10 years without additional contributions. At 8%, it grows to about $10,795. Adding modest monthly contributions on top materially accelerates the growth.

• Should I pay off debt or invest $5,000?

  For high-interest debt — particularly credit cards averaging 21.52% per the Federal Reserve's most recent data⁽¹⁾ — paying it off first is almost always the better move. A guaranteed return from eliminating that balance beats almost any investment. For lower-interest debt like a mortgage or federal student loans, investing while paying minimums often makes mathematical sense.

Written by

Matt Miczulski

Investments editor and market analyst

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Matt Miczulski is an investments editor and market analyst at Finder. With over 450 bylines, Matt dissects and reviews brokers and investing platforms to expose perks and pain points, explores investment products and concepts and covers market news, making investing more accessible and helping readers to make informed financial decisions. Before joining Finder in 2021, Matt covered everything from finance news and banking to debt and travel for FinanceBuzz. His expertise and analysis on investing and other financial topics has been featured on Yahoo Finance, CBS, MSN, Best Company and Consolidated Credit, among others. Matt holds a BA in history from William Paterson University. See full bio

Matt's expertise

Matt has written 287 Finder guides across topics including:

• Trading and investing
• Broker and trading platform reviews
• Money management