So grab your stash of cash, and let’s look at some of the best ways, here how to invest 1000 dollars!
1.Pick investments by yourself using an online trading platform.
If you’re the do-it-yourself type, and you have some investing know-how, you might want to consider picking investments yourself using an online trading platform such as TD Ameritrade or E*TRADE.
There are many more discount brokers out there, so you might want to spend a little time researching them and seeing which discount broker is right for you. You can also use this guide in helping you choose the best online broker.
Tip: If you’re going to be picking investments yourself using your $1,000, you might want to pick out some exchange-traded funds (ETFs). ETFs are known for their lows costs and diversification benefits.
2.Lend to those in need and earn some interest.
If you want to invest into the lives of others and earn some interest, there’s a new craze that’s both exciting and reasonable: peer-to-peer lending.
Peer-to-peer lending is the practice of lending to borrowers through an online service whose goal it is to bring borrowers and lenders together.
Lending Club is one such peer-to-peer lending service I tried out, and I found it to be very easy to use and reliable (see my Lending Club review).
As an investor with Lending Club, you can invest automatically using investment criteria. Alternatively, you can manually invest by browsing available loans and picking the ones you like. It’s up to you!
Tip: Like any investment, make sure you choose notes that reflect your tolerance for risk. Some notes are riskier to invest in than others, and thankfully, you can see this information at Lending Club’s website.
3. Invest in your kids’ college education.
Every parent wants their kids to be successful in life. One path to success is college.
But, there’s a problem. Can you guess what it is? College is expensive and is showing no sign of slowing down. Forbes contributor, Mike Patton, points out that college tuition has been increasing by a whopping 5.2% for the last 20 years.
If you want your kids to go to college, and you aren’t rolling in the dough right now, you should probably think about saving for their college education.
A 529 college savings plan is a great choice, as it has tax advantages that encourage individuals to save for college. These plans are sponsored by the states, so be sure to check out your state’s 529 college savings plan and see if it makes sense for you.
$1,000 is a great start in one of these plans, and depositing the money in such a plan will help you get the technical details of the account worked out so you can continue to contribute.
For example, you might be held back by the fear of the unknown. Making a decision to start saving for college today will make it much easier psychologically to invest tomorrow.
Tip: If you’re going to contribute to your children’s college education, it’s wise to start as early as possible. The time horizon for college is usually short: a maximum of 18 years. If you’re starting when your children are older, you have even less time. I can’t stress enough . . . start as soon as possible. You need all the time in the markets you can get.
4. Pay down your debt.
You might find this investment strategy surprising. But think about it for a moment.
Having debt is the opposite of having an investment. The only difference is that holding onto debt is often more costly than investments are profitable.
For example, you might expect to achieve a 7% or 8% return in the stock market. With credit cards, you might pay in the double digits. Yikes.
That’s what makes paying down debt such a great investment idea. What you’re really investing into is not having to pay lots and lots of interest.
This is also why some financial gurus recommend paying down non-mortgage debt before investing for retirement. It’s that important.
And, $1,000 might make a big dent in your debt. But if it doesn’t wipe it out, you should truly focus on paying off your debt as soon as possible.
Tip: Organize your debts. You may choose to organize them from lowest balance to highest balance, or from highest interest rate to lowest interest rate. The former makes sense from a behavioral standpoint and will give you some quick wins while the latter will save you the most money. If you still have good credit then you can take out a 0% balance transfer credit card and reduce your interest for 12-18 months while you pay it down.
5.Diversify your money
One of the worst mistakes financial advisors see is when clients don’t diversify their money. Don’t be like those clients. Be awesome and diversify your money.
And yes, you should diversify your $1,000. With ETFs, it doesn’t cost much to diversify your money and make sure you don’t ride the single-stock roller coaster.
You might be thinking, “But Jeff, it’s only $1,000. Can’t I buy some [insert favorite company here] shares?”
Well, you could, but you sure wouldn’t be setting yourself up for making smart investment decisions in the future. Be smart with your money even if it’s being smart with just a little bit of money. Practice now for the future.
Tip: As you build your portfolio over time, make sure to rebalance it as certain investments within the portfolio will rise and fall in value. Never be over weighted or underweighted in an area. Learn all you can about proper diversification and stick to those best practices. Those are the best ways to invest 1000 dollars as Forbes states. Hope it would be your reference to invest your money.
