5 Ingenious Ways to Invest $1,000

 

More than half of American people, according to a new Pew Research Center research, have money invested in the stock market. Americans clearly understand the value of investing, even if their exposure is restricted to a workplace 401(k), despite the fact that the median holdings (amounts invested) vary depending on age, income, and other demographic factors (k).

There are many things you can do with an extra $1,000 that you don't immediately need if you have an emergency fund that is fully loaded. Sadly, there are so many investing options to select from that it can be stressful and perplexing.

I wanted to share some of my favorite ways to invest $1,000 because of this. Whatever choice you pick, you should be pleased with yourself for taking the time to consider your financial options.

1: Use fractional share investing to create a diversified portfolio.

Although investing in individual stocks is always an option, fractional share investing enables you to buy a portion or "slice" of the stock you like. You can diversify your investments to the fullest extent with this investing method, and you can purchase expensive stocks that you otherwise couldn't afford. For instance, at the time of writing, the price of a share of Amazon (AMZN) stock is above $3,000.

With fractional share investing, you can invest your $1,000 into a portion of one Amazon stock, whereas with a single share, your money wouldn't get you in the door.

This method of purchasing stock is ideal for those with just $100 to begin investing, but it also works well for those with $1,000 or $5,000 to spend.

This method of purchasing stock is ideal for those with just $100 to begin investing, but it also works well for those with $1,000 or $5,000 to spend.

How It Works: Purchasing fractional shares is just as simple as purchasing common stocks or exchange-traded funds (ETFs). Finding a brokerage that accepts fractional share investments is all that is required. Then, you can explore your alternatives and make investments in the market for fractional shares at your own leisure.

Where to Start: A lot of internet brokers provide commission-free real-time fractional share investing. You can distribute your $1,000 initial investment among hundreds of different businesses because fractional shares can be as small as 1/1,000,000 of a share.

2: Create a micro-portfolio of real estate.

There are other ways to begin investing in real estate, but Fundrise is the simplest. You can put down an initial commitment of merely $500, which is only half of the total amount you need to put down.

How It Works: Without needing to become a landlord, Fundrise REITs allow you to invest any money you have (in this case, $1,000) in real estate. Simply open an account, deposit some funds to get going, and choose a portfolio option that fits your risk tolerance and your objectives.

For you, Fundrise handles the tedious tasks of managing real estate and locating new assets. As an aside, investors in Fundrise saw an average platform return of 22.99% in 2021 (3.49% thus far in 2022). My 4-year Fundrise results are available here.

Where to Start: Fundrise is your best bet if you're searching for a quick and simple way to invest in real estate without having to manage buildings or risk having your assets reduced by fees. Discover more about Fundrise's investment options.

Who It's Best For: Fundrise is a great investment choice for anyone who want exposure to the real estate market without having to manage individual properties or become landlords.

3:Allow Dividends to Cover Your Monthly Expenses.

What if you could arrange for your cell phone carrier to pay your monthly phone bill? That seems really good, don't you think? Absolutely, it would!

That is exactly what might occur if you put your $1,000 into a telecom company like Verizon or AT&T, which both offer sour dividends.

It would be as though you were receiving your cell phone for free if you bought enough shares so that the dividend payments could cover your monthly charge. Now, can you hear me?

You might use this strategy for other recurring costs like your grocery bill, internet service, gas, and entertainment. Here are some instances of businesses whose services you undoubtedly pay for and which have stocks that pay dividends.

4: Establish a Roth IRA. 

For retirement investments, you can use a Roth IRA, a sort of investment account. From then, your money can increase tax-free, and once you reach retirement age, you can withdraw your money without having to pay income taxes. For most persons, the maximum contribution to all IRA accounts in 2022 is $6,000. However, people 50 and older are permitted to make a contribution of up to $7,000.

How It Works: Income limits place restrictions on who can contribute to a Roth IRA; nevertheless, it should be noted that contributions totally cease for single filers making over $144,000 and married couples making over $214,000 in income.

Where to Start: Any brokerage account that provides this sort of account can help eligible customers build a Roth IRA. Betterment, Stash, M1 Finance, and TD Ameritrade are a few of the most well-known brokerage houses that provide Roth IRAs.

5: Create a High-Yield Emergency Fund.

A high-yield savings account is your best choice if you want to earn interest on your $1,000 but can't afford to lose any of it. The interest rates on these deposit accounts are higher than those offered by your neighborhood brick-and-mortar bank.

How It Works: These accounts won't pay out much interest, but since the funds are protected by the FDIC, there is no risk of losing them. If you need to, you can also withdraw money at any time.

Where to Start: The UFB Direct Rewards Savings provides one of the greatest rates on savings accounts currently offered. Even the highest rate is available without a required minimum down payment or monthly maintenance fees.

Who It's Best For: The majority of people should have some emergency funds on hand. However, if you have $1,000 to invest but think you might need the money soon, this account is an excellent choice.