Where To Invest $1000 Right Now
When you’re looking for money management tips that will help you save more now and in the long term, here’s one that you shouldn’t ignore: take $1000 and invest it. This shouldn’t be your only savings strategy, and hopefully you’re investing for retirement elsewhere.
Outside of your regular savings, your emergency fund, and your retirement plans, you can also make some smart money moves with a one-time investment that either grows on its own or continues to grow with regular contributions. It starts with the first thousand dollars.
Not sure where to invest 1000 right now? Here is some reliable advice.
Invest In Real Estate
Real estate is always a smart investment because property is a great hedge against inflation. It’s also less risky because a piece of property, whether we’re talking about a residential rental home or a commercial unit, is a tangible asset. It always carries value, regardless of how the market is performing.
You might wonder how you can possibly invest in real estate with only $1,000. It’s not impossible. Take your money and buy into a Real Estate Investment Trust, or a REIT. The REIT is composed of other small investors and it buys income-producing property. Shareholders receive at least 90 percent of what the trust earns. You can become a real estate investor for just $1,000, and you don’t have to assume the entire risk associated with a piece of property.
Put $1,000 In A High Yield Savings Account
A solid budgeting plan will make space for savings. But, how can you save in a way that earns you money? A high yield savings account is a great idea. If you want to invest $1,000, but you don’t like the risk that’s associated with stocks and the market, put that money in a high yield account, where rising interest rates are actually working to your benefit.
You’re earning significantly more money with this type of account, so it’s a surprise that only 21 percent of Americans use them. The longer you keep your money in an account, the higher your yield. Right now, you can find online and traditional banks offering more than three percent APY on your $1,000. It’s a smart investment, and it keeps your money accessible.
Invest In A Roth IRA
Opening a Roth IRA is a smart investment strategy even if you already have a retirement savings plan through your employer. With a Roth, you’re taking your $1,000 after taxes, which means you won’t have to pay taxes on that money when you withdraw it. Your money grows tax-free while it’s invested in the Roth.
Here’s another reason that the Roth is so smart for investors. While your earnings cannot be deducted until the age of 59-½, you can withdraw any contributions you make at any time without penalty. So, the initial $1,000 that you deposit into your Roth IRA is available to you before your retirement date. All of your contributions can be taken out without taxes or penalties.
Put Your $1,000 in an ETF
Mutual funds often make the most sense for investors, and while those are a great idea for your $1,000, consider investing in an exchange-traded fund, or an ETF instead. Most of the ETFs available will follow a benchmark such as the U.S. bond market or a stock market index. The brilliance of an ETF is that they often focus on a specific industry or sector of the economy. You can look for a technology ETF or a renewable energy ETF. If you’re concerned with social justice or corporate responsibility, you can target those specialized ETFs.
You’ll pay fewer fees than you would with a mutual fund, and there’s more flexibility with how often you move your money around.
If you haven’t already, download some personal finance software and get an idea of how your $1,000 can best work for you.
Shawn Manaher is a former financial advisor, has founded 5 online businesses, and is a coach, speaker, podcast host, and author.
He's been featured on Forbes, The Consults Corner on TAE Radio, The Writing Biz, What's Your Story, and more.
He loves to share his personal finance tips and money management wisdom with others on his website, ShawnManaher.com, to help them find financial freedom.
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