In a society that is evolving in terms of unique investing opportunities, there are a myriad of options for individuals looking to invest $1,000 in the most optimal manner. Provided that an individual has a full emergency fund and 3-6 months of expenses in their savings account, investing is a very viable option. Regardless of a person’s age or experience in terms of investing, there are plenty of solid ways to invest 1000 dollars.
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In this following piece, I will present a significant number of ideas that will provide the answer to the question “What is the Best Way to Invest $1000?”
1) Invest Towards Paying Down Your Debt
Debt free is the way to be. If your amount of debt surpasses your retirement or personal savings, it can be an absolute detriment to your financial future. Even if it’s a reasonable amount of debt that can be paid readily quickly, debt is nothing to fool around with. If you are wondering how to invest $1000, your first priority should be freeing yourself from the shackles of debt.
Therefore, you can invest $1000 to get rid of the elephants in the room that may lie in the form of credit card payments, auto or student loan payments.
2) Open a Roth IRA Account
Could you say tax-free income? You can use $1000 to open a Roth IRA from a wide variety of online platforms and brokerages. There are plenty of available options depending on what type of investor you are. If you prefer a hands off approach to investing, you may prefer opening an account on Betterment or Wealthfront. Due to superior customer service and a wider selection of funds to choose with, the best ROTH IRA options are TD Ameritrade and Charles Schwab.
3) Invest In A Side Hustle
Are you in a position in which you are working to achieve someone else’s dream? Does your dream and/or your passion lie in a side hustle such as freelance writing, voiceover work or photography? A $1000 investment in your side hustle could be just the jumpstart that you need to turn your passion into a serious venture. You can potentially make your secondary income your primary income if you have $1000 to invest.
4) Invest in Personal Development
Whether you are an entrepreneur or investor, it is absolutely necessary that you invest in yourself. You can use your $1000 investment to gain a superior edge in terms of investor knowledge. As an entrepreneur, you can utilize $1000 towards attending a conference or seminar in your business sector so that you can gain a competitive edge in terms of knowledge. On the other hand, investors can utilize $1000 to gain an edge in trading knowledge by signing up for an online trading seminar in which you can learn to trade investment vehicles such as stocks, options or foreign exchange.
Finally, the greatest form of personal development can be found in books. With books such as “Rich Dad, Poor Dad” by Robert Kiyosaki , “Buffett, the making of an American Capitalist” or“The Intelligent Investor” by Benjamin Graham, investors will have a leg up in terms of investment strategies and unique investment philosophies.
5) Invest In Your Kids’ College Education
It is no secret that college tuition is skyrocketing at an alarming rate. If you are a parent that is facing this scenario, you should not have to think very hard about where to invest $1000. Parents can utilize this allotment by starting or fortifying a college savings plan.
The two main types of college savings vehicles are 529 college savings plans and Coverdell ESA plans. A 529 College Savings plan is a college savings account that’s exempt from federal taxes.
On the other hand, a Coverdell ESA plan is a tax-advantaged plan that allows you to save funds for named beneficiaries such as your child or grandchild.
6) Invest in an Index Fund
If you are an investor that craves long-term diversification more than anything else, index funds are a popular choice if you are looking for some of the best ways to invest $1000.An index fund is a mutual fund that is designed to match the components of a market index.
According to Reuters, the two top performing S&P Index Equity Funds are the Vanguard Institutional Index (VIIIX) and the Fidelity 500 Index (FXAIX).
7) Invest in Target Date Retirement Funds
Individuals of all ages and retirement scenarios should also considering putting $1000 towards target-date retirement funds. A target date retirement fund is a hybrid
mutual fund that has a mix of stocks, cash and bonds that is automatically rearranged based on a selected time frame.
Target date retirement funds allow an individual to target retirement goals with a single fund at different stages of their life.
Thus, an individual in their 20s who invests in a target-date retirement fund can expect a more aggressive asset allocation that is geared towards stocks while an individual in their 50s and 60s can expect a more conservative asset allocation that is geared towards cash and bonds.
8) Invest in Dividend-Paying Stocks
If you are looking for a solid ROI, Dividend-Paying Stocks are a great option. With $1000 to spare, you can invest in safe blue-chip stocks that pay solid dividends.
At the moment, the Dow 30 stocks with the highest dividend yields are Verizon Communications (VZ), Chevron Corporation (CVX) and Boeing (BA).
The Dow 30 stocks with the highest estimated dividends moving forward are IBM (IBM), Boeing (BA) and 3M (MMM).