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Investing Your Hard Earned Cash (Great Ways To Invest 1000 Dollars!)

If you’re living within your means and managing to save money every month, then you want to make this money work for you. And there are far better options than keeping your money in a savings account. But, if you’re not used to investing money, it may seem scary and time-consuming. No worries. Here are some great ways to invest 1000 dollars (so you can make more money!). 

Great ways to invest 1000 dollarsIs 1000 dollars a good amount to invest?

If you have a thousand dollars…should you even worry about investing? Is $1,000 a good amount to invest?

Yes, it is.

Honestly, any money invested is a good amount.

But you can easily get started by investing just 1000 dollars. However, the key is to invest that money smartly. Don’t just stick it in a savings account that isn’t paying you for saving. Instead, focus on moderate or high-risk investments that can pay off faster.

Related: Keep Investing Simple: The Secret to Wealth

What is the best way to invest 1000 dollars?

There are many great ways to invest 1000 dollars. But the easiest way is to first think about your long-term goals.

  • Do you want financial freedom?
  • Do you want to be able to send your kids to college and pay for them?
  • Or, do you want to be able to retire and live off of dividends?

These questions will help you decide which investment you should make.

As an example, if you’re willing to take risks to hopefully win big, try the stock market. If you want to pay for your kid’s college, you’ll want to invest in a 529 plan. If you want financial freedom or to retire at a certain age, making low-risk investments or investing in a Roth IRA or 401(k) may be a better deal.

We’ll go into more details of the best investments below!

Related: First Time Investing Without Too Much Risk

How can I invest 1000 dollars to make more money?

One of the best ways to invest 1000 dollars and make more money is to invest in some sort of passive income. This could be via house hacking (ie. getting a roommate or renting out your basement as an Airbnb) or investing in stocks that pay dividends.

By investing in passive income sources, you’ll earn money each month, which means your 1000 can easily turn into multiple thousands — or even millions — if you continue to reinvest your earnings.

Related: 3 Ways to Start Investing With Little Money

Piggy bank with moneyHow should a beginner invest $1,000?

If you’re a beginner investor and don’t know where to start, the two best ways are via your 401(k), or a Roth IRA. This is because there is an easier barrier of entry and no minimum investment that you have to make.

And, with Roth IRAs, you won’t pay any taxes on qualified withdrawals, which is a win-win for you! This means that your money will grow tax-free and wait until you’re ready to withdraw.

Related: 5 Reasons Why Index Investing is a Great Strategy for Beginners

Is your 401k part of your net worth?

Kind of a random question here…but it’s one that often comes up when you think about investing.

So is your 401k part of your net worth…?

It sure is!

Every single one of your retirement accounts is included as an asset. That also includes IRAs and other taxable savings accounts.

How do beginners buy stocks?

First, I wouldn’t recommend buying stocks as a beginner — unless you’ve done extensive research. But, if you’d like to buy stock, the easiest way is through an online stockbroker. This includes sites like Fidelity or even Robinhood (which also offers fractional shares).

And the best part? These sites show the trends of stocks, if you should buy them or not, and if they pay dividends. So you can learn while you make money, woo!

What is the best investment for beginners?

There are two great investments for beginners…

  • Investing in a side hustle or business to make more money, and
  • Investing in low-risk investments like index funds.

This way, you can still make money, but without the risk of losing too much.

Related: Investing in Online Ventures: A Beginner’s Guide

Top Ways To Invest 1000 Dollars

Now that you know why you should invest your hard-earned money, let’s talk about the different ways you can. The top ways to invest 1000 dollars!

Real estate investmentReal Estate

Making money with an investment property is almost as old as time — and for good reason. People need to live and visit somewhere, and if you can offer a great option, you can make a big profit.

Before you get involved in this sort of investment, you need to do your background research. It’s hard to buy a house with just $1,000, but veterans may be able to do it with no money down. Or, you could rent out a portion of your home to a long-term tenant or set up a space for an Airbnb for a lot less money. 

And, be sure to look at things like the Home Mortgage Disclosure Act (HMDA) to see if people are struggling with mortgages in this area. This could make it hard for you to get top dollar for a rental or even to get a home for a decent price. 

Related: Investing in Real Estate vs Stocks [My Experience With Both!]

Side Hustle

A side hustle can be a great way to invest in yourself as well as make extra money. That is because you’re starting a small business that you can run in your free time. You can rent out a spare room on Airbnb (which can also help you start building a real estate portfolio!), create a blog, or even resell items on sites like eBay.

If this sort of venture interests you, it may be a good idea to work out your strengths and weaknesses and be honest with the type of person you are.

  • If you are very private, then renting out a room may not be the best option.
  • Or maybe you have some specialist knowledge in a particular subject which may make it very easy to start a website or business around it.

Whatever you choose, a side hustle is a great stepping stone to eventually creating your own small business.  

Investing 1000 dollarsThe Stock Market

For stock market investing, you’ll need to do a fair amount of research and investigation. The stock market is made up of companies, and you are essentially buying part of the company and making profits when they do. Or, you could also lose money when they do.

It’s a good idea to look into the companies that you are interested in investing in. Doing a bit of research can help you determine if the company really is as good an investment as you believe it is

And remember, some stocks also provide dividend payments too. Some companies offer great dividend payments — once, twice, or even four times a year. Dividends are payments that you received for holding shares in a company.

When it comes to the stock market, you can easily diversify your investments too. That means holding shares in more than one company or industry. This is a wise strategy as it cushions you from any big losses in one of the stocks. The stock market is based on what people buy, so if you are good at trend spotting, you may find you become very good at this sort of investment.  

Related: Simple Investing: Save Time, Earn More! #BOOM!

Bonds

Buying government or corporate bonds may be a better option for you if you are new to investing. Government bonds come in two forms — Treasury and Municipal. Basically, federal or local options.

Corporate bonds are simply a bond with a specific company. These types of bonds are graded according to their credit risk. In other words, the lower the score, the more likely the company is to fold — which means money lost. Generally speaking, you won’t get your investment back.

When you buy bonds, you’re buying a debt obligation. You will hold this for anywhere between one and thirty or so years. During this time, the company or government will pay you interest. This interest is known as coupons. Depending on the agreement, you will receive this once or so a year. When the agreement ends, the bonds mature, and you receive your initial investment back. Basically, you’ll earn your money back and then some! 

Related: Tired of Investing in Stocks? 7 Investment Alternatives

4 Great Ways to Invest 1000 Dollars

There are many great ways to invest 1000 dollars, but it’s important to find what works best for you. If you want low risk and less time commitment, choose bonds or real estate. If you’re okay with higher risks, a side hustle or stocks are great!

How would you invest 1000 dollars? Tell us in the comments below!

Investing Money

AUTHOR Kimberly Studdard

Kim Studdard is a strategy consultant and course launching expert. When she isn't spending time with her daughter and husband, or crying over This Is Us, you'll find her teaching other mompreneurs how to scale their business without scaling their workload.

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