How to Invest $1,000 Today in 6 Smart Ways to Invest Your Money
Investing in stocks is a popular choice for many of people all round the world, according to new data. No matter where you live or how much money you make, the vast majority of people around the world understand the importance of investing.
With today’s technologies and investment products providers, you have a number of possibilities if you have a well-funded emergency savings plus an extra $1,000 that you don’t need right now. Unfortunately, there are so many possibilities for investing that it may be both a bit overwhelming and perplexing at times.
This is why I thought to show you some of my favourite ways to invest $1,000 by writing them down in this article for you. I firstly would like to say that whatever option you choose, you should be proud of yourself for taking the time to think about where you want to invest your money and help grow it for your future.
As always, please seek expert financial advice if you have any questions or concerns about where you want to invest your money.
#1. Use fractional share investing to build an investment portfolio that is more diverse.
You can always invest in individual stocks anytime you want to, but a new and very popular fractional share investing option that enables you buy a “slice” of a desired stock instead may fit into your investment profile. With this kind of investing, you can get access to high-profile stocks that you normally wouldn’t have been able to purchase while still diversifying your portfolio to the fullest extent possible.
Take Amazon (AMZN) shares, for example. The share price as we speak is currently selling at over $3,381 per share so single share in Amazon would cost you a whole lot of money. This is where fractional share investing allows you to commit your money towards a piece of that company where you probably previously thought it was out of your reach.
Stocks may be purchased in this manner with as little as $100, but it also works well for investors with as much as $1,000 or $5,000 to invest.
Buying and investing fractional shares is as simple as investing and selling standard equities or exchange-traded funds (ETFs) through your online broker.
It’s as simple as just locating a brokerage business that accepts fractional shares for investing, and you’re good to go. There is so much information online regarding fractional share investing, you’re free to explore your possibilities and invest in fractional share investments at your own convenience. Or you may want to start your research here…
Where to Get Started: Robinhood enables real-time fractional stock trading even in most cases without charging any fees. Fractional shares may be as little as 1/1,000,000 of a share, so you can spread your $1,000 initial investment among hundreds of different companies if you wish.
Who it’s best For: Fractional share investing is a wonderful alternative for everyone and anyone who wishes to broaden their horizons by investing in multiple firms but have limited funds to do so. As always you need to read the terms and condition for the fractional investment broker you choose to use carefully.
#2: Beat Your Savings Account with Digital Currency
This is an investment option you may choose to utilise if you want to earn more than you would in a typical savings account. If you’re a buy-and-hold bitcoin investor with $1,000 in crypto in your account this may be a great fit for you.
An example of such an account if available from a company called Coinbase. Investing your bitcoin in a Coinbase Interest Account yields daily interest that is paid out periodically.
NOTE* Please be aware that digital currency investment is very volatile at the best of times and you should seek professional advice before investing.
The way it works is that you may earn a % APY on your crypto deposits with a Coinbase but the amount of interest you receive is dependent on the type of cryptocurrency you have. Rates may change at any time so to get up to date information I’d advise to visit their website and read their terms and conditions.
For example, Bitcoin is now yielding around 6 percent APY, but the Gemini Dollar (GUSD) may nett you the highest rate of over 8.6 percent APY. In addition, you won’t have to make any minimum deposits in order to receive interest, and there are no additional fees to worry about.
Where to Get Started: You may head to Coinbase, which is the crypto service who provides many options. Open a new account and deposit your crypto. In no time you’ll be on your way to earning extraordinary rates.
Learn more about Coinbase.
Who it’s great For: This sort of account is best for bitcoin or crypto buyers who intended to buy and hold long-term.
#3: Build a Micro Real Estate Portfolio
I remember my dad always saying to me when I was a kid, “Son, when you get older, you must buy your own house” and today with as little as $500, the simplest method to get started investing in real estate is through Fundrise. There are other options available but I found these guys offer some great options. With merely $500 (just 50 percent of the capital you have to spend), you can make an initial investment.
With Fundrise, you can start investing in a variety of different REITs with their beginner portfolio, which provides immediate flexibility and diversity.
How It Works: Fundrise REITs enable you deposit whatever the capital you have (in this example, $1,000) into a real estate fund without needing to become a homeowner.
Simply establish an online account, deposit some money to begin. Choose a portfolio that corresponds with your tolerance for risk and your goals and you have essentially started investing in Real Estate.
The great thing is you don’t have to do any of the the hard work of managing your real estate investment or looking for new investments on your own. Fundrise does it all for you.
You can start investing in real estate quickly and easily with Fundrise. If you don’t want to deal with buildings or pay large fees, this is the company for you.
Who it’s best For: Those looking for real estate market exposure for their investment portfolio without the hassle of managing individual properties might consider Fundrise as a viable investment choice.
#4. Build Up a High-Yield Emergency Fund
An online high-yield savings account may be the ideal choice if you really want to earn a return on your $1,000 but can’t afford to lose any of it. These online accounts provide higher returns than what you’d obtain from your local bank or financial institution.
How It Works: These deposits won’t yield a great deal of interest, but most of them are insured so there’s no fear of losing the cash. You may also transfer your cash out at any moment if you need it.
Who it’s best For: Most adults should have some contingency money in the bank for a rainy day. Even if you just have $1,000 to invest, this is a smart account to use if you know you’ll need the funds in the near future.
#5: Build a Portfolio with Low Cost ETFs
ETF’S are also a Smart Ways to Invest Your Money. Diversifying your portfolio has never been so easy thanks to the ever so popular exchange-traded funds (ETFs). As with a mutual fund, you may buy a variety of companies through an exchange-traded-fund (ETF).
How It Works: ETFs allow you acquire a selection of shares and other securities in one easy step. Most major brokerage firms allow you to invest in ETFs, and you can generally do so with very low investment costs (or even no fees).
Where to Get Started: Vanguard is a highly popular choice when it comes to investing in ETF’s. They establish index funds by purchasing assets that reflect businesses across a broad stock index or those that target certain demographics (for example, an industry sector, similarly sized companies or firms in the same part of the world). The great thing about ETFs, whether is monthly, quarterly or half yearly, a portion of the fund’s profits are returned to investors who acquire shares in the fund.
Vanguard also provides bond index funds, which purchase and sell government and corporate debt and are considered safer investments but with lower returns.
Index mutual funds and exchange-traded funds (ETFs) total more than 65 at Vanguard so you are spoiled for choice.
Who it’s best For: ETFs allow you to diversify your portfolio more so than individual stocks do, making them an even better choice for investors with a smaller starting investment.
#6: Let a Robo-Advisor Invest On Your Behalf
Robo-advisors are Smart Ways to Invest Your Money! They are a software driven investment platforms that make investing choices on your behalf using science and smart algorithms. There are so many people using robo-advisors now, Deloitte suggests that by 2025, the robo-advisor industry could have $16 trillion worth of assets under management (AUM).
Typically, when setting up an account, the process begins with a series of questions concerning your current financial situation and your long-term financial aspirations. Using complex algorithms, the robo-advisor then picks the best investment alternatives for you based on your risk tolerance and investment timeframe.
Who it’s best for: Robo-advisors are designed for investors who need assistance determining which investments are the greatest fit for their portfolio.
What’s You Investment Style?
Smart Ways to Invest Your Money: Before embarking into this new world of investing, you should take some time to consider your investing approach before investing your $1,000 (or any other amount). For the most part, your investing style should be defined by considering these two main points:
- Timeline to invest
- Willingness to take risks
A robo-advisor Smart Ways to Invest Your Money, such as Betterment, may be a suitable fit if you want someone else to handle the bulk of your financial planning and decisions.
Betterment, after all, offers modest fees while using technology to make intelligent investment choices for you. You may start a Betterment account, set it up to be financed on a regular basis, and (basically) leave it alone. So long as you’re happy spending your time and energy on things you enjoy, this is a terrific option for you.
However, some people prefer to do things themselves. If you want to improve your investing skills over time, it makes sense to get your hands dirty and learn by doing the learning and research yourself.
Even if you only want to gain an understanding of popular investment methods, this route makes sense. For those who want to do their own investing, there are a number of other choices, including ETFs, Coinbase and Fundrise as mentioned above.
In Conclusion
Smart Ways to Invest Your Money: Whatever you decide to do with your $1,000, know that you’ve made a significant first step in your financial journey. Having read thus far, I can infer that you’re serious about making a wise financial investment.
By making this choice, you’re miles ahead of the majority of folks who put off investing until it’s much too late.
However, you still have work to do to guarantee that you pick the greatest investing option for your requirements and goals. Decide on your investing style and explore all of the possibilities given in this guide.
When you spend a little time and plan, your $1,000 can be ready to grow in no time at all.
