With investing, you have to get started somewhere, and $500 is a great place to begin. The key, however, is to build a foundation for the future with that cash.

Yes, you could buy a stock, but a better option will probably be an index-based pooled investment product, otherwise known as a fund. This is why you'll probably be best off with Vanguard Total Stock Market ETF (NYSEMKT: VTI).

It isn't all that exciting, but the truth of the matter is that the first step toward a bright financial future is to live below your means. That's the only way that you will ever be able to save money to invest. Of course, before investing, you should probably create an emergency fund (in a bank account, CD, or other easily accessible but super safe account) with three to six months of living expenses in it. But once that's done, you'll be ready to start exploring Wall Street-related options.

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Source Fool.com