Making better financial decisions starts with figuring out where to invest your $1,000.
This is a good amount to save, but it’s not much money for investment.
You can still find a variety of investment options.
You should be proud of yourself for saving $1,000 and investing instead of spending. Kudos!
This post is for you if you’re asking yourself questions like “What can I do with $1000?” or “I have a $1,000 investment, but don’t know where to start.”
Table of Contents
How to Invest $1000
How to invest $1,000 per month
The FAQ
How to Invest $1000
Although investing $1,000 won’t make you rich overnight, it is a good start for building a nest-egg and helping you achieve financial goals.
Investing options are now available to people of all income levels.
Everyone has the chance to put their money to good use and learn.
It is difficult to say exactly how you should invest $1000, as it depends on your financial situation and goals.
You should be aware of your options so that you can make better decisions about how to spend your money.
Here are the top ways to invest $1000.
- Investing in a high-yield savings account
A high-yielding savings account is a great investment, even if it’s not the traditional one you were thinking of.
If you’re looking to be a little more secure with your $1,000, a savings account that pays interest may be the best option.
You can find a variety of online accounts that offer great interest rates, but also other options to invest your money.
Most banks will offer 1-3% in interest, so other investment vehicles can provide a higher return. These banks are FDIC-insured, so you won’t lose your money and can withdraw it at any time.
- Invest for Retirement
It’s always a good idea to invest in your company’s 401k. It’s even more beneficial if your employer offers a match.
You can easily stack your money.
Most employers who offer a 401k match your contributions up to 50% or more, usually between 3% and 6% of salary.
If you do not have a 401k plan through your company, you can still open an IRA. You can choose between two types: Traditional IRA and Roth IRA.
There are a few rules to follow and some things to be aware of, but it is very simple to open an account with any financial institution.
Roth IRAs are my preferred choice because they offer tax-free growth, and tax-free withdrawals during retirement. When I opened my Roth IRA a few year ago, I had only $500.
Since then, I have maxed out my credit card for the past three years.
Note: Do You Have a Company 401k Plan? Blooom offers a free 401k Analysis to make sure you’re on track.
- Consider Purchasing ETFs
You have many options when it comes to investing in your 401k and IRA.
Many mutual funds and index funds have minimum investments costs. Many will cost more than $1,000. I’m talking $3,000+.
There are alternatives.
You can certainly buy individual stocks of companies, but it is not the best option and comes with a high level of risk.
Personal, I would only recommend this option if you have a larger investment and are willing to risk a smaller amount.
Exchange traded funds, or “ETFs”, can be a great option. ETFs are traded on a stock exchange, just like stocks. There are many types of investment, such as commodities, bonds, and various sectors in the stock market.
ETFs are great because they have low expense ratios, and offer fewer brokerage commissions than purchasing stocks individually.
You have more diversification options when you invest $1,000 on the market. Here you can find out more about ETFs.
- Invest $1,000 in Real Estate
The thought of investing in real estate scares many people. It can be expensive and requires a lot of work.
Real estate can be a good way to diversify and build wealth.
Although $1,000 is not a lot of money, it can get you a long way. Real estate crowdfunding websites have changed the game.
You can invest as little as $500 in single-family homes and apartments, commercial properties and other types of property.
Fundrise and DiversyFund are two of my favorites, with only a $500 investment minimum.
If you’re still not sure, you can try Groundfloor. You only need $10 to start investing in single-family homes.
You can also invest in a REIT. Most investing institutions, such as Vanguard, offer ETFs or Index Funds. Those, however, tend to follow the fluctuations in the stock market.
- Use Rob-Advisors to Your Advantage
The age of robo investing is here, just as digital companies appeared in real estate. Instead of trying to figure out how to invest, or what the best options are, you can let an algorithm do it for you.
Robo-advisors are able to help you make investments based on your answers. They use artificial intelligence that is based on the questions you ask.
You can enjoy many of the same benefits as a financial advisor for much less money and with fewer headaches when managing your investments.
You can choose from a variety of options, but two are worth considering:
M1 Finance
Betterment
- Investing in your own business
If you’ve ever thought about starting your own side business online, or even a full-time job, investing $1,000 into your project could be the best decision.
This money will help you get started with many side hustles or online businesses that don’t require high startup costs.
For example, Invested Wallet was started with less than $1000 and I have made this money back plus more in the past year.
Do some research on your business before you start.
What is your passion? What is your passion? You can earn money from many of your hobbies.
- Investing in your children
If you have children, or plan to soon, this is only for you. A good way to spend $1,000 is by planning your children’s education.
You have plenty of time before you need to begin investing. You may want to increase your savings and investments if your child is close to a high-level education.
If you’re just starting out with your family, investing $1,000 in a 529 plan is a good idea. Your investment in a 529 plan is tax-free and grows without interest.
When the money is taken out of the account to pay for educational expenses, you don’t have to worry about taxes.
There are many options available to your children as they grow up.
It’s important to have some financial cushion for your family in case the worst happens.
How to invest $1,000 per month
The above ideas should give you some good investment options for $1,000. Let’s assume you have a good rhythm and $1,000 each month to invest.
You did a great job if you have been able to achieve this or if you are working on your finances in order to be able to do so.
Those of you who don’t have it or believe it is impossible, please be patient and continue to work at it. This was only a reality for me after three years.
How did I do it? How did I do it?
What are the best investments to make if you only have $1,000 per month to invest? You could choose from any of the above options or a combination of them.
Here are some recommendations for you to consider.
Your company’s 401k is especially attractive with a match by the company
Own IRA or Roth IRA
Create a savings account
Invest in Real Estate
With $1,000 per month I maxed out my Roth IRA, and I put the rest into my high-yielding savings.
After I increased my monthly savings, I invested it in my side business. I also started to look into real estate.
It’s up to you to decide what to invest in! You should analyze your finances, goals and money in order to determine what is best for you.
Remember, this is all assuming that your debt has been paid off or is close to being paid off and you’re looking to put the money to good use.
The FAQ
Here are some of the most common questions that arise when it comes to investing $1,000. You can refer to the content above if you want more information.
What is the best investment for $1000?
It is impossible to say which way is the best for investing $1,000, as it depends on your goals and financial situation. What works best for you today might not work for someone else. These are the top options you should consider:
High-Yield Savings account
Investing in Retirement
ETFs are a great way to invest.
Real Estate
Robo-Advisors
Your Children
Your Own Business
What can I do with $1000 dollars?
You might not be ready to invest $1,000 yet, even though it is a good option. It’s okay to be unsure. Here are some other options to invest your $1,000:
Get rid of some extra debt
Add to your emergency funds
Start a side business
You can use it for house maintenance.
You can use it to pay for car maintenance
How can I invest with little money?
You won’t become rich overnight by investing with little money, but you will start to lay the foundations for your future. We have to begin somewhere, and investing with a small amount of money is possible. Consider these options:
Invest your spare change with a roboadvisor
Join the 401k plan of your employer
Start investing in ETFs at low costs
Use a high yield savings account
CDs or Savings Bonds
