5 Legal Ways to Invest $1,000

So you’ve come across $1,000. Maybe you just got a bonus from your job. Or better yet, you saved up. The good thing is that you have decided take a big step and invest your first $1,000. Investing for beginners is hard and there are so many routes to go. Investing options differ in terms of returns, volatility,and liquidity. That’s why I came up with 5 (legal) ways to invest $1,000.


Before We get into it, we need to set the record straight. 

You need to figure out what’s your goal and risk tolerance for your money. This will ultimately determine how you invest your money. Here, I will provide a few low risk options vs some high risk options. You also need to ask yourself when you are looking to spend some of the returns.


People turn $1,000 into millions by hard work and perseverance. However, even more turn $1,000 into $0 using the same method.


1. Open a Roth IRA at Vanguard

If you have earned income from employment, take $1,000 and open a Roth IRA at Vanguard and purchase a Target Date fund appropriate for your age.

2. Invest in your 401k  

My company matches every dollar that I invest into my 401k. In fact, Most companies offer this program. That means if you put in 1,000,  your company will give you 1,000, totaling to 2,000 towards retirement.

Note: With a 401(k), you invest pretax dollars, which lowers your annual taxable income. With a Roth IRA, you invest after-tax dollars and your investments become tax free.  

3. Open a trading account

There are many online trading platforms that you can download. I recommend TD Ameritrade. Using this platform, you can pick investments yourself. TD Ameritrade offers a lot of tools and tricks to get started. With just $1,000 there are many Exchange-Traded funds (EFTs) to choose from. 

4. Build an Emergency Fund

Many people forget that they need an emergency fund alongside their savings account. You don’t want to be in a situation where you have to pull money from your savings or even worse, your investments, to suffice for an emergency. Cover yourself now and build an emergency fund that is 3-6 months of expenses. 

5. Start an Online Business and Bet on Yourself

Thousands of people are starting their entrepreneurial journey everyday. In most cases, the cost of a startup business online ranges from $100-$1000. Most of the costs are associated with setup such as web hosting. The costs of inventory will be up to you as you decide what kind of online business you want to run.