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.