You might think you need to be rich in order to start growing your wealth through investing. However, believe it or not there are ways to invest $1,000.
For example, there are certain companies that have created investment options for the average person.
They’ve done that by setting lower minimum thresholds for opening accounts. Many of these companies allow you to start investing with as little as $100.
These investment options offer choices for people with smaller amounts of cash looking to build their retirement account or savings accounts.
Here are some options to think about if you’ve got $1,000 or so that you want to invest.
In This Article
How to Invest $1,000
So, are you wondering how to get started with investing a smaller dollar amount? If so, check out these ways to invest $1,000.
1. Invest In Real Estate
One of the more popular investment vehicles investors grow their wealth is through real estate investing.
It might seem as though real estate investing isn’t feasible if you don’t have a lot of cash.
After all, let’s say you were to buy a traditional rental property. You wanted, say, a single-family three-bedroom home.
As an investor, you would need twenty percent down plus closing costs.
Now add onto that any money needed for updates and repairs. You’re looking at tens of thousands of dollars just to get started.
Fortunately, there are more affordable ways to invest in real estate. Have you heard of crowdfunded real estate investing?
What is Crowdfunded Real Estate Investing?
When you invest in real estate via crowdfunding, you join together with a group of other investors.
Together, you fund a real estate investment project. That project is led and managed by an experienced real estate investment team.
The crowdfunding company screens the clients who come to it for money (i.e. the borrower).
Or, the owners of the crowdfunding company are the investors. In other words, the company does all of the hard work for you.
Investing in crowdfunded real estate investing is true passive income.
You as the investor don’t have to worry about managing tenants, maintaining the property, or dealing with legal issues.
You simply assess the investment and invest your money in deals you think are a good risk. After that, you wait for the real estate investment market to do its work.
Which Crowdfunding Real Estate Company Should I Use?
There are several crowdfunded real estate investing companies out there. How can you know which one is right for you?
One crowdfunded real estate investing company is Fundrise. It’s popular with investors for one main reason.
And that is that Fundrise works to make real estate investing affordable for nearly everyone.
With Fundrise, you no longer need $100,000 in cash to invest in real estate.
In fact, Fundrise has a minimum investment of $500. This makes investing in real estate even more affordable.
Low minimum investments plus low fees.Visit Fundrise
2. Use A Robo Advisor
Investing in the stock market is another way you might grow your $1,000 into much bigger numbers.
It’s understandable that you might worry that you don’t know enough about stock market investing to get started.
Even things like the opening and closing times of the stock market may seem overwhelming.
Choosing a financial advisor can be a dilemma as well.
How do you know if the advisor you’ve chosen can help you grow your money in alignment with your life and financial goals?
The good news is that today’s stock market investing companies have made investing easier.
Hiring a financial advisor used to be a necessity in order to invest in the stock market. However, the following companies partner with investors differently.
They help investors via a robo-advisor that uses calculated algorithms to help you invest in the way that’s best for you.
Betterment is one of the most popular robo-advisors around in the United States. They focus on offering Exchange Traded Funds (ETFs).
They charge an annual asset management fee of between 0.25 percent and 0.40 percent. The fee depends on whether you open their Digital account or their Premium account.
Open any taxable or retirement account with a $0 initial balance.Visit Betterment
3. Peer-to-Peer Lending
Peer-to-peer lending is a form of investing where you work with others to lend money to people in need of loans.
These borrowers don’t head to a traditional bank, credit union or lending company for a loan.
Instead, they apply at a peer-to-peer lending company such as Lending Club for a loan.
The money loaned to them (once they’re approved) comes directly from investors like you and me.
Here’s a more in-depth explanation of how peer-to-peer (P2P) lending works.
- People needing a loan apply for that loan via the P2P lending web site.
- The P2P lending company decides whether the loan is a good potential risk for their investors.
- Then, they offer for investors to fund part or all of the loan.
As an investor, you’ll be privy to valuable information about the potential borrower . For instance, you’ll know the borrowers:
- Credit score
- Important credit history information
- Employment information
- Income information
Each member investor then decides whether or not they want to take on the risk of borrowing the applicant some of their money.
Investment returns are based on the interest rate the P2P lending company charges the borrower. The riskier the loan, the higher interest rate the borrower pays.
The less risk involved, the lower the interest rate the borrower pays. Investors earn a portion of the interest rate charged on the loan as their investment return.
Each month a payment is made, a portion of that money goes to the investors who funded the loan.
If all goes well, investors earn money on the loans they help fund. What if the borrower defaults on the loans they take out with the P2P lending company?
In that case, the investors lose the funds they contribute to the borrower’s loan.
P2P lending investments can be high risk, but they can also come with higher returns than other types of investments might.
Easy to use app for peer to peer lending.Visit Lending Club
4. Invest In Online Real Estate
Wondering what online real estate is? It’s the fabulous world of blog site or web site ownership.
When web site owners talk about making money via owning a web site, people often think of unicorns and fairy tales, or of money-making scams.
But I’ve learned firsthand that you really can make money by owning blog or web sites. My first money-making blog recently sold for more than $10,000.
Before that, it was consistently providing me with $500 a month in income on average.
Many web sites, including Well Kept Wallet, make much, much more than that in monthly income.
What if you could take your $1,000 and find a money-making web site to purchase?
You’d start having the income proceeds going to you instead of the former owner.
If you can do this, you can make your $1,000 back – and more – in a relatively short time period.
Websites can make money in a number of ways.
One way web sites make money is through ads. For instance, you might visit a web site and see ads on a sidebar or within an article published on the site.
When a visitor to the site clicks on those ads to learn more about them, the web site owner gets money.
While the cash you can earn for one click is minimal, it can really add up over time.
The more visitors a site gets, the more chance of people clicking on one or more of the ads. This gives you a better chance of increased income.
Affiliate links are another route for investment return for a web site owner. Web sites often contain a number of links to specific products on the website.
If a site visitor clicks on those links and purchases a product, the site owner gets a commission percentage for the sale.
For instance, a five percent commission on a fifty-dollar sale means the web site owner just earned $2.50.
More visitors to the site and more affiliate links within the site means the chances of earning commissions is higher.
A third potential way web site owners make money is by posting sponsored articles. Sponsored articles are articles written with promoting a specific company in mind.
For example, an insurance company might pay a web site owner $300 to publish an article discussing the importance of having insurance.
The article will include a link to said insurance company. When readers click on the link it sends more potential business to the company.
The company gets customers they wouldn’t have had otherwise, and the blog owner gets paid for sharing information about the company.
It’s a win-win for both sides. The web site owner made $300, and the insurance company gets their name out in front of more potential customers.
Tips for Buying a Web Site
There are a number of ways to make sure you invest your $1,000 carefully on a web site purchase.
First, it’s important to get accurate visitor numbers verified. Do this by using sites such as Google Analytics or Stat Counter.
Have the site seller give you that information directly from the source. Second, verify what the site’s current income is.
The going rate for buying a web site generally runs between one and two times the site’s annual income.
So, if a site’s net income is averaging $500 per month, a fair price to pay for the site would be somewhere between $6,000 and $12,000.
Web Sites Involve Work
It’s important for you to know that running a web site does involve work. Keeping up on maintenance for the site and adding new content is key.
Promoting the site via social media and other marketing techniques is also important. This will help you grow your readership and increase commissions in the process.
Maintaining a website might sound a bit daunting if you’re not a techie person.
However, platforms such as WordPress make it easy for nearly anyone to learn how to run a website.
5. Start Your Own Business
Another way to invest $1,000 is to start your own business. If you run it right, you can make big money fairly quickly.
The first key to a successful business is to choose a business that aligns with your talents. What can you do?
Can you design websites? Do you have a skill you can sell?
When I started my freelance writing business 5 years ago, I spent well under $1,000 to get it up and running. Today I make five digits a year writing for clients.
Here’s another story. I know a guy who started an SEO business five years ago.
He knows a lot about SEO, so he started servicing businesses out of his home. The startup costs were minimal since he was selling a skill.
Last month he sold that SEO business for six digits. That’s one heck of an ROI (return on investment).
Yes, he did have to work hard to grow the business, but the payoff was well worth it.
There are so many business ideas you could consider with your $1,000. Start thinking outside the box and find a way you could fulfill a need for others.
Then, use that idea to start and grow a business.
6. Open a Roth IRA
A Roth IRA works different than a traditional IRA. With a traditional IRA, you get to deduct the money you invest in it from your taxable income.
Roth IRA contributions aren’t tax deductible. However, the income you gain from investing the Roth IRA funds are tax-free.
Take the money, put it in a Roth IRA product with a company like Vanguard or Betterment. Choose your product based on your risk tolerance level.
A Roth IRA can be a good investment choice because most everyone could benefit by saving more for retirement.
And since your earnings grow tax-free, you never have to worry about counting them on your taxable income.
7. Invest in Yourself
If you want to grow your money for the long haul, why not invest in yourself? Udemy has courses you can take to learn just about anything.
Here are some of their current course offerings categories:
- Web development
- Business and entrepreneurship
- Health and fitness
You can use the skills you learn from investing in yourself to start a lucrative side business. Maybe you become a website designer. Or a life coach. The choices are nearly endless.
Read books, take courses, meet with mentors, join a gym. Take your $1,000 and invest it in a way that ensures a better life for you or your family.
Learn a new skill so you can leave the 9-to-5 job you hate.
Start that business you’ve always wanted to start. Just do something to ensure you’re making a better life for yourself.
8. Invest In Certificates Of Deposit
A Certificate Of Deposit (Bank CD) won’t pay you the highest interest rate.
However, it is a mostly risk-free investment that you might like if you’re risk-averse.
For example, CIT Bank is currently paying between 0.30% and 0.50% on its CDs.
Other banks may even be paying higher rates. Check out this post on the best CD rates for more information.
You may even want to consider building a CD ladder in order to keep your money more fluid in order to take advantage of positive rate changes.
Competitive rates and great variety of products.Visit CIT Bank
9. Consider Alternative Investments
Another option for investing your $1,000 is to invest in alternative types of investments.
Alternative investments can take many forms, such as:
And more. Of course, these types of investments come with much more risk than the other ideas mentioned here.
But then again, $1,000 isn’t usually life-changing money for more people. For that reason, you might find the potential gain well worth the risk.
A low minimum investment compared to other forms of art investing.Visit Masterworks
There are many ways you can turn $1,000 into a whole lot more money. It just takes choosing a wise and calculated investment.
Look through the list above and decide which choices make the most sense for you to tackle your financial goals.
Start growing your wealth by deciding which one (or more) of these investment options best suits your investment knowledge and your risk tolerance.
Sooner than you think, you’ll see that nest egg grow into a lot more money if you choose the right investment option.