To some $1,000 is a lot of money, to others it’s is very little. But, whatever your opinion on a thousand bucks is, it would be better off investing it somewhere instead of it just sitting around. It might end up being spent on clothes, food, gadgets, or something you’ll regret buying after a day or two.
For aspiring investors who just started to accumulate some savings and would like to trying investing at least $1,000and doesn’t know where to start, we’ve got you covered.
But first, we should discuss the two types of investments you can invest in, PASSIVE and ACTIVE investments.
If you don’t have much time to watch your money, then it would be better to choose passive investments. Passive investments let your money grow while you sleep. There are some types of passive investments that have almost zero risk and some investments that have a little more upside but of course, have a bit more risk.
Active investments on the other hand are the ones you’ll need to set some time to do. The upside is higher but of course, but will require more time and effort. If you have time and energy on your side, it’s best to choose active investments.
Passive Investments
Treasury Bonds – Treasury bonds are loans to the government. These are usually considered the safest investments you can choose. But of course, the lower the risk the lower the reward. Treasury Bonds usually range from 2-3% returns that have a wide range of maturity from 2 to 10 years.
Invest in an Index Fund – for most investors, investing in index funds is one of the safest ways to invest your money. Your money will be pooled and invested in a diversified portfolio minimizing the risks associated with market volatility. The fees are also relatively low so it’s almost a surefire way of making money.
Invest in a Single Stock – instead of relying on an index or on financial advisors, you can do your own research and invest your $1,000 on a single stock. If the stock rises, all of your money will earn from it. Conversely, since your money isn’t diversified yet, and the company plummets, you may lose a lot from it. The higher the risk, the higher the reward.
Peer-to-Peer Lending – There are tons of apps that lets you lend money to other persons across the world. The lending is direct, so the upside is higher. But, of course, the downside is also high since there is no intermediary. If the person you’re lending money to decides to default, you’re in for a big regret. Again, the higher the risk, the higher the reward. All investments have certain risks anyway.
Active Investments
Buy and Sell – This has the most upside in earnings since you can literally buy and sell goods within a short amount of time. It can be in minutes if you can find a motivated seller and match it with a motivated buyer. There are a lot of goods out there that you can buy at highly discounted costs (or even free) and then sell at about market value. You made need to research hot products in your area.
Invest in Yourself – enroll in courses to further learning in your industry or an industry you would like to get your hands into. Programming, game development, AI development are in demand and are expected to increase in demand in the near future. Investing in yourself is one of the best ways you can earn more.
Which investment you choose depends highly on your situation and risk tolerance. If you want safety, you can’t go wrong with Treasury Bonds and Index Funds. If you’re feeling a bit more adventurous, go for stocks or peer-to-peer lending. And if you have time, active investments are great to develop your skills.
Bonus: If you’re feeling a bit more adventurous, you can join the crypto hype. Altough cryptocurrency is a relatively new industry, the upside from it is promising.