You probably have heard that investing is important. You’ve more likely heard about people investing millions here and billions there getting wealthier over time. Where you fall into all this if you only have 1000 dollars to invest. Your options might seem limited, with the volatile nature of the market, those chances might even seem lesser. Well, it may give you some hope by knowing that some of the wealthy investors actually started with way less than 1000 dollars. There are some unique ways you can invest your $1000, which may not make you a billionaire but definitely will give you some peace of mind or even excitement while watching them grow into more significant nest eggs.
We’re going to list some ways that can help you get started on your investing journey especially if you live in the USA. Who knows, when the value of this will land in your lap in some unique way, you will keep investing. This amount may seem small, but figuring out how to invest and where to invest can give it a whole lot of perspective. Investing with a small amount will not be a walk in the park, but will require patience and persistence from your end to harvest actual growth. Anyhow, let’s get on with it.
Lend To Those Need & Earn Some Interest
There is always someone who needs money, so why not lend them some and earn interest on it. If you want to be more official you can call it: peer-to-peer lending.
Peer-to-peer lending is the exercise of lending to your peers in need and earns some interest in return. There are even online services available that bring borrowers and lenders together. You can benefit from them even staying at home. There are lending clubs, where people come together to share the same interest of lending the money to those in need. You can be a part of them as well. Lending Club is also an online platform, which allows automatic investing using investment criteria. You can also invest manually by browsing the available loans and investing in the one you like. Make sure to choose notes that reflect your tolerance for risk when lending. Lending club website provides all of this information making your lending experience smooth.
Hire Robo-Advisor
If you’re still figuring out how to invest your $1000 dollars and getting confused about where to start. Then why not hire a Robot who can work as your investment advisor. No, we are not kidding, Robo-Advisors are investment companies who can create automated software designed to manage your portfolio based on your needs and criteria. They will ask you questions at the start to give you the most personalized experience possible. Robo-advisor makes investment management very easy and relevant. They can be a great resource for your little investment since they have very low account minimums.
Especially if you’re not skilled at investing, Robo-advisor offers a slick user-interface helping you get relevant information like your investment performance, and holdings, etc. Lastly, it’s better to sit with a financial planner if your financial plan is not in place, but if you have figured out your strategy, then try out a Robo advisor.
Start A Roth IRA
Roth IRA accounts have become a great way for investors who are just starting out. This is a long-term account, in which you pay taxes on your money before investing it. Since you pay taxes up-front, like when you are investing, meaning you don’t have to worry about the tax rate by the time you’ll retire. All that profit you made is yours now because you have already paid all of your taxes.
Establish an Emergency Fund
Establishing an emergency fund can save you from panicking while facing any unforeseen disaster. You can set aside $1000 as a rainy day fund. The most common practice is to save for at least 6 months of living expenses. You never know what’s coming next, it’s a great relief to have some cash-on-hand in case of any unforeseen emergency.
Invest In Yourself
It’s a no brainer, by far, the best investment you can make is yourself. The better you will equip yourself with knowledge and resources, the better investor and successful person you will be. You’ll get a better return on investment as well. After you’ve invested quite a bit in the above mentions, choose leftover money to learn about investing. Really the only thing, keeping you from your goals is the right education and right actions. You can get great resources to learn from while sitting at your home. Invest in education, nobody gives golden nuggets for free. You’ll see yourself, that low-cost Udemy courses can give you ideas to achieve wealth even with a little amount.
Don’t forget the power of compound interest while investing. Little steps towards the right direction can blow up exponentially with no time leaving you in shock and your critics in awe. Do some research before investing but don’t dwell on perfection. Perfection will only drive you crazy, gaining nothing but frustration.