How much do I need to invest to get started
If you’re new to investing you might not know where to invest your very first $1000. You might also find yourself wondering if that amount is even enough to begin with.
It doesn’t matter if you have $500 or $5000 to invest – as long as you know where to invest along with a couple of smart investment practices, you can see your investments steadily multiplying.
Here are some of the best investment solutions to invest that $1000 you’ve worked hard to save.
Consider Lending to Earn Some Interest
There’s a new investing craze on the block that you may not be aware of: peer-to-peer lending. Why not invest into stuff others are doing and enjoy a sizable interest to see your investment grow?
Peer-to-peer lending has actually become official, where you lend money online through an intermediary service that brings lenders and borrowers together on one unified platform. Lending Club is one such popular service you should look into. When you sign up, you can automatically make investments using their available criteria. However, you can invest manually by going through the available loans they have and going with the one that fits your requirement.
As a general rule of thumb, go with notes that agree with your risk and tolerance level. Some notes are just very risky to invest in compared to their counterparts, so choose wisely. Luckily, all the information you need in this regard is right there on the website.
Your Child’s College Fund
College education today is very expensive and there’s no slowing it down either. You need to come up with an investment to ensure quality education for your children. All parents want their kids to be successful at life and that’s where a good college education comes in. If you don’t think you can save enough money for your kid’s college tuition, think about saving the $1000 for a 529 college savings plan. Before anything else though, you should look into your respective state’s 529 savings plan to gain better insights, as all of them are state-sponsored and may have varying requirements.
Deposit your money in a college savings fund like this and you will understand how the account is worked so that you continue making contributions. For instance, you may be reluctant to invest due to general fear and uncertainty of the future, which is normal. If you decide to start saving for your child’s college today, you will make it easy on yourself mentally to continue investing more when the time comes.
When contributing to a college education savings fund such as this, the earlier you start, the better. Since college starts for your kids after 18 years, you need to start investing as soon as you can.
Diversify Your $1000
Is $1000 too little an amount to diversify? Absolutely not!
Diversify your money with ETFs (exchange traded fund). It doesn’t cost much to diversify it and by putting off purchasing shares for now, you’re making a smart investment decision.
Once your portfolio gets heavier, you will need to do a bit of rebalancing as some investments in that portfolio will increase or decrease in value. You certainly don’t want to be feeling too heavy or light in any one area of your portfolio. Learn everything possible with regards to diversification and move forward with those best practices. Try new tools too, such as binary trading. You might want to consider hiring a financial advisor, but if that advisor tells you not to diversify, you need to find another one!
A thousand dollars may not be a huge amount to kick off investments with, but starting off with the right options can really make it grow, especially as years of interest accumulates.
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