9 Ways to Invest $1,000

Some products in this article are from our partners. Read our Advertiser Discloser.

Close up photo of fanned out ten and twenty dollar bills

You might think you need to be rich in order to start growing your wealth through investing. However, believe it or not there are several 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 that you want to invest.

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 Crowdfunded Real Estate

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. 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.

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 $10. This makes investing in real estate even more affordable.

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.

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.

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 Prosper for a loan.

The money loaned to them (once they’re approved) comes directly from investors like you and me.

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.

P2P lending investments can be high risk, but they can also come with higher returns than other types of investments might.

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.

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
  • Language
  • Academics
  • Marketing

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 3.50% and 4.65% 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.

CIT Bank

Competitive rates and great variety of products.

Visit CIT Bank

9. Consider Alternative Investments

collectible investments

Another option for investing your $1,000 is to invest in alternative types of investments.

Alternative investments can take many forms, such as:

  • Art
  • Collectibles
  • Cryptocurrency
  • Wine

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.

Summary

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.

Leave a Reply

Your email address will not be published. Required fields are marked *

9 Comments

  1. Alfredo Alcantara says:

    This is a great article! I want to start trying one of those ways. But, what about foreigners who have some savings in a U.S. account? Is it possible to try one of those options?

  2. Didi Blonde says:

    This is a nice article and a good choice to invest $1K.

  3. Oscar Quintero says:

    Another good choice to invest $1000 is to open an HSA.

  4. Get The Bank on Yourself book by Pamela Yellen. She has done much research to help many avoid the stock market and invest in a more secure way of gaining without worrying about the unpredictability of the market.

    1. I’ve never heard of it, but we’ll check it out!

  5. Amaltas Dwivedi says:

    This is a good article. Personally, I feel comfortable in investing in the stock market by taking the assistance of a financial advisor. Peer 2 peer lending is quite new for me, and I am not that much aware about it. Similarly, real estate is a good option. But, I don’t think $1000 is enough to get good returns from there.

    1. Avatar photo Laurie Blank says:

      Thanks for weighing in, Amaltas! Yes, it’s important for people to determine which types of investing they feel most comfortable with. Personally, I find it less intimidating to invest $1k in a company like Fundrise or Realty Shares than I do to take a chance on buying a rental property directly. And, as a bonus. it’s cheaper. 🙂

  6. This is a nice post on how one can get started with all the possible options. $1,000 isn’t chump change for anyone starting out (or anyone else for that matter).

    1. Laurie Blank says:

      Yeah, it’s a nice chunk of cash, that’s for sure. But, it’s a lot less than many other types of investments require to buy in on. Thanks for the comment!