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How to Invest $1000 right NOW: My 3 Favorite Investments

Lower your risk of a stock crash with these three favorite ways to invest $1000 right now

That last thing you want to do after saving up that first $1000 to invest is to lose it! Whether its $100, a $1000 or a million, you worked for it and now you want to see it work for YOU!

Take 30 seconds to think about your last investment. How much did you spend on fees? How much has the investment increased or decreased since?

High fees for buying stocks and the threat of a coming stock market crash make the types of investments you choose one of your most important decisions.

My three favorite ways to invest a grand are not only great low-cost investing options but offer returns to beat your investing goals and safety from a stock selloff!

How Much Do You Need to Start Investing?

You can start investing with as little as $100 on most investing sites but it helps to start with a little more to avoid some of the risks in individual stocks and investments. Investing $1,000 can mean a big difference in being able to get the diversification you need and really start seeing your money grow.

But how should you invest $1,000 and how fast can your earnings pile up in my three favorite investment strategies?

Before we get into my three favorite ways to invest $1,000, let’s cover HOW to invest and why it’s just as important as the investments you buy.

  • Diversification means buying enough individual stocks or investments so that a big loss in one will not seriously dent your portfolio. Invest $500 in one stock and it accounts for half of your $1,000 portfolio meaning a big loss could really hurt. Invest $100 in something and it accounts for a much smaller chunk of your total wealth.
  • Investing fees are one of your biggest enemies and will eat away at any return you earn. Buying ten stocks every three months adds up to $400 in annual fees even at the less expensive investing sites. You’ve already lost 40% of your $1,000 investment and you have only just begun! Make deposits into your investing account regularly but wait to invest to save on fees.
  • Investing has to be for the long-term, whether you’re investing $100 or $100,000! I’ve worked as an investment analyst for more than a decade and can tell you that even the pros don’t know where stocks are going from month to month. Investing should be like a savings account…one with a really amazing return.

With these three points in mind, it should be clear why you should wait to invest $1,000 rather than jumping into the stock market with $100 or less. Investing $1,000 means you’ll have enough to buy a wider range of investments and can do it all at once rather than several times, racking up those fees.

But the question of what you should invest your $1,000 remains, so…

Here are my three favorite ways to invest $1,000!

Investing $1,000 in Peer Lending

Investing in peer loans isn’t yet as common as stock investing but it may soon be. Peer loans offer a lot of the benefits of fixed-income bond investing but pay higher returns and avoid some of the disadvantages of bonds.

residual cash flow investing

Current P2P Lending Investing Returns

I’ve been investing in peer loans on Lending Club for a few years and have averaged an annual return of almost 10% – that’s way above the return on other bond investments and at less risk that stocks.

Five-year bonds of large corporations pay just 2% annually, that’s just barely above inflation but still might be better than investing in stocks if the market hits a rough patch. Even the safest category of peer loans is paying upwards of 6% annually, and these are people with credit scores approaching 800 FICO.

  • Since peer loans are for terms of three to five years, prices don’t fall as much as long-term bonds when interest rates rise
  • Investing in peer loans through a retirement account means all the interest you receive is tax free for decades
  • Peer loan investments won’t fall with the stock market, making them a good way to lower your risk in a traditional stocks and bonds portfolio

Before you click out and start investing in p2p loans, check out this article on 3 Lending Club Strategies for Safety and Return. You’ll find a strategy that will fit your return needs and risk tolerance.

Here’s the deal with investing in peer loans:

You can invest a minimum of $25 in each loan so it’s really not practical to start by investing $100 but investing $1,000 means you can buy up to 40 loans for your portfolio. Each loan will be about 2.5% of the total and won’t cause a steep drop in your investment if it defaults.

how to invest $1000 peer lending

I interviewed one peer lending investor that has earned an average of 12% annually since 2009, making a $10,000 profit on his initial investment. He shared his strategy for picking peer loans including which risk categories he chooses and which borrowers he selects.

Open an Account on Lending Club Investing and start investing in peer loans

The New Way to Invest in Real Estate

I’ve been investing in real estate for nearly two decades, first in residential rentals and then in commercial space. My first job in college was as a commercial real estate agent and investment analyst.

I love the feeling of taking a property, putting some sweat equity into it and earning a monthly cash flow from the rent. No other investment has made as much generational wealth as real estate.

But traditional real estate investing is a pain…sometimes more than it’s worth.

I’ve dealt with just about every tenant complaint you can imagine, from fixing electrical wiring to that 2am call to light a water heater (yep, they couldn’t just strike a match and do it themselves).

Recently, I found an easier way to invest in real estate. This new online way to invest gives you the monthly cash flows and safety of real estate without all the headaches. It’s called real estate crowdfunding and I’m convinced it is going to become more popular than house flipping or real estate investment trusts (REITs) for regular investors.

With real estate crowdfunding, you invest as little as $1,000 in individual projects managed by professional developers. These projects can be for commercial or residential property and the investment can be in debt or equity…that means you can get a diversified portfolio of investments with just a few thousand dollars, something that was never possible in traditional real estate investment.

I’ve been investing on the RealtyShares platform, one of the largest and with a consistent stream of new deals available. It’s free to sign up on the site and browse deals so there’s no obligation to invest.

passive income real estate strategy

Getting Started Investing with $1,000 has Never Been Easier

Staff at RealtyShares reviews the investment documents and does due diligence on property developers. Only about 5% of the deals submitted get approved to go on the site so it’s good to know that there is a level of vetting in the investments.

RealtyShares manages all the payments from the professional developers to the investors so all you have to do is sit back and wait for the checks.

  • As with direct real estate investment, make sure you are investing in multiple properties for diversification. That means different property types and different locations.
  • Invest in a mix of debt and equity deals to further diversify your risk and manage cash flow.
  • Don’t feel like you have to invest all your money at once. The platform posts new deals regularly so it’s best to stagger your investments.

Click to browse deals on RealtyShares for free

The Best Stocks to Invest $1,000

If you do decide to invest your $1000 in individual stocks rather than an ETF, your best bet is to do it through a Motif to reduce your investment fees. Motif Investing is an investing site that lets you group up to 30 individual stocks or funds and then buy them all with a single $10 commission.

Each time you invest more money, you can buy the whole group for just one commission…that means you’re saving hundreds a year in commissions versus other online investing sites.

I’ve created four funds on Motif that I use for different investing themes. My favorite is my American Future Fund, a group of stocks within three sectors that I believe will benefit from huge drivers over the next 30 years.

Check out my stocks and funds on this page

My American Future Fund is a group of 10 stocks and four funds with exposure to energy, agriculture and healthcare. Economic and demographic factors are going to be a huge force behind these three sectors over the next several decades and will lift the entire group. Investing broadly across the sector funds means I don’t have to worry about picking stocks. Investing for the long-term theme means I don’t have to worry about what the investment does in any given year.

I started the fund in early February and it’s already earned 15.6%, more than double the return on the stock market over the same period. That’s just the start and it’s easily my favorite way to invest right now. Check out the fund on Motif and create your own fund around your favorite stocks.

how to invest $1000 stocks

I started on Motif Investing for less than $1,000

Investing Starts with Your First $1000 a Month

The real power of investing isn’t to just invest $1000 and then do nothing. Make investing part of your monthly budget. Investing just $50 a month will be worth more than seven-times the amount of a single $1000 investment over 30 years.

Don’t worry about investing every penny you earn, just put in what you can afford and follow the stock market basics to diversify your risk and lower your investing fees.

how to invest $1000 now

How Investing $1000 Grows Fast

Motif Investing isn’t just a great site to save money investing. Check out this post to see how I doubled the stock market’s return in less than a year on one investment fund.

These are just three of my favorite ways to invest $1000 but you should really hold a range of asset classes including stocks, bonds, real estate and peer loans in your portfolio. Whether you’re investing $100 or $100,000 – don’t worry about beating the market. Invest for the long-term and never take money out of your investments.

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