When you first enter the world of investing it can be quite intimidating
as a beginner investor you have a thousand questions rattling through your
brain like what do I invest in and what if I lose all my money these thoughts
are normal and the best way to not only feel comfortable but to also see
noticeable success in your investing efforts is to understand what the best
options are for investing your money and in this video I will share with you
seven proven ways to invest your first $1,000 and if you're new to the channel
then hit the subscribe button below for more a life-changing content now before
we begin there is one thing that you must keep in mind when investing your
first thousand dollars all forms of investment come with risk and this means
that while you could turn that $1,000 into $10,000 you could also lose it all
so as a general rule I recommend only ever investing money you can afford to
lose but if you are up for the investing challenge then here are seven ways you
can get started method number one self managed
investments with your first $1000 in hand the only person who will be
deciding where this money goes is you well if you're the do-it-yourself type
and you have some foundational investing knowledge then you can consider picking
your own investments now with this method of investing there are a few
considerations to keep in mind first you have to identify which online trading
platform you want to use to facilitate your investing efforts second you need
to complete the administrative work to get your account up and running and
finally you need to research the stocks you want to acquire and execute the
trade now if this do-it-yourself method sounds appealing to you then a few
things I would consider are the following take the time to research
which brokers you want to work with when executing your trades this is one
instance in trading where you can save or lose yourself money so take the time
to research and choose wisely another suggestion I usually give for new
investors is that if you're going to be picking investments yourself using your
thousand dollars you might want to pick out some exchange-traded funds or ETFs
ETFs are known for their low costs and diversification benefits and this may
increase your initial investing success as you are just starting out method
number two lend it out if you want to invest into the lives of others and earn
some interest there's new craze that's both exciting and
reasonable peer-to-peer lending peer-to-peer lending is the practice of
lending to borrowers to an online service whose goal it is to bring
borrowers and lenders together now you probably have three questions in mind
how does this work how much can I make and is it safe and that's exactly what I
was thinking when I first looked into peer-to-peer lending this type of
lending is typically facilitated by a lending platform and this platform
evaluates the risk investors face when they provide financing to individuals
and businesses through their marketplace in essence you can see how the platform
assesses the likelihood that you'll be repaid and the higher the risk that a
borrower may default on paying back their loan the higher the interest rate
they pay now returns can vary but if you decide to lend money on popular
platforms like Lending looper Lending Club you can expect at the minimum
returns of five point nine percent and the good news is that you don't need a
ton of money to get started contributions as little as twenty five
dollars can be invested which then get rolled up into the full amount of the
loan being granted therefore your first $1,000 will go a lot farther than you
think finally is lending safe peer-to-peer
lending is actually safer than you might expect
all the major platforms obtain key personal information from borrowers and
monitor the repayment history but of course there always exists the risk that
someone defaults on their loan so like all other money making methods there is
risk involved method number three give it to a robo advisor on one end of the
investing spectrum there are people who want to be totally hands-on when it
comes to which stocks they buy and how and where they move their money on the
opposite end are those who want to make your investing efforts as easy as
possible and one way to streamline this process is to use a Robo advisor Robo
advisors are investment companies who create automated software designed to
manage portfolios based on certain criteria for example when signing up for
such a service you might take a questionnaire to determine your risk
tolerance level or investment goals Robo advisors are very popular these days for
a couple of reasons first they typically have very low or non-existent account
minimums making the barrier to entry low enough for anyone to take advantage of
this investing second they tend to offer very user
friendly interfaces where you can get all the investing information you need
in one platform now will I generally recommend Robo advisors for investing
beginners there are certain people that this method isn't as well suited for the
first of those are investors who prefer human assistance some rubber advisors
offer live assistance which is usually part of a premium service while others
interact with you almost exclusively through the web if you need hand-holding
or a familiar voice to talk to a robo advisor is probably not for you next
there are investors with multiple investment accounts some investors may
need to coordinate company benefit packages and 401ks with other accounts
which makes automation offered by Robo advisors less suitable finally there are
the investors who need a customized investing plan Robo advisors who won't
offer customized planning or advice on how much to save whether to use a Roth
IRA or traditional IRA or how to allocate investments in other accounts
such as your 401k method number four invest in your children's education if
you have a child or intend on having kids at some point in the future then
one thing that is probably on your mind is how you will finance their education
every parent wants their child to be successful in life and one path many
choose is going to college but unfortunately college is not getting any
cheaper in fact the cost of college is increasing faster now than any other
time in history with tuition increasing by five point two percent for the last
20 years now if you're like most parents and want your child to get a college
education then now is the best time to start investing and it is another very
reasonable way to use that $1,000 you have a 529 college savings plan is a
great choice as it has tax advantages that encourage individuals to save for
college these plans are sponsored by the state so be sure to check out your
state's 529 college savings plan and see if it makes sense for you in fact
investing a thousand dollars is a great start when using this type of plan and
depositing the money in such a plan will help you get the technical details of
the account worked out so you can continue to contribute for example you
may be held back by your fear of the unknown making a decision to start
saving for college today will make it much easier psychologically
to invest tomorrow now I briefly went over this already but I want to stress
it again that if you're going to contribute to your child's college
education it's wise to start as early as possible the time horizon for these
payments comes quicker than you would expect an investing sooner will reduce
the stress of funding this large outlay and allow you to have the money you need
when the time comes method number five pay down your debt
you might find this investment strategy surprising but think about it for a
moment having debt is the opposite of having an investment the only difference
is that holding on to debt is often more costly than investments are profitable
for example you might expect to achieve a seven or eight percent return in the
stock market but with credit cards you paid double-digit interest making the
assumption of debt a law costlier than if you were to use that $1,000 to invest
with that's what makes paying down debt such a great investment idea what you're
really investing into is not having to pay lots and lots of interest this is
also why some financial gurus recommend paying down or mortgage debt before
investing for retirement it's that important and a thousand dollars might
make a big dent in your debt but if it doesn't wipe it all out you should truly
focus on paying off your debt as soon as possible something I preach when it
comes to eliminating debt is to make sure it's organized you may choose to
organize your debts from lowest balanced to highest balanced or from highest
interest rate to lowest interest rate the former makes sense from a behavioral
standpoint and we'll give you some quick wins while the latter will save you the
most money if you still have good credit then you can take out a 0% balance
transfer credit card and reduce your interest for 12 to 18 months will you
pay it down method number 6 start a Roth IRA want to invest that $1,000 wisely
and get a tax break when you withdraw your returns will a roth IRA allows you
to do just that as opposed to a 401k where your contributions allow you to
avoid tax in the current year as a form of tax deferral a Roth IRA will allow
you to withdraw from the plan tax-free meaning that whatever amount you have in
this account is yours to keep that's a good thing for many many people the
other reason is that you have a lot more control over your money with the Roth
IRA when compared to your employer-sponsored retirement account
those are two great reasons to start Roth IRA let's not forget the main
reason you should start one it's important to safer retirement for many
people they do not have pensions to rely upon in their golden years which is why
you need to start investing early in order to build up a nest egg that will
support you during this time method number seven invest in real estate I
know what you're thinking how can I possibly invest in real estate with just
a thousand dollars houses cost much more than that
well that's because when most people think of real estate investing they
think of renting a house or office space that's the most common type of real
estate investing but not everyone wants to have the day-to-day duties of being a
landlord or managing the spaces a REIT or real estate investment trust involves
buying into real estate as a partial owner you can think of a REIT as a
mutual fund for real estate investing and like a fund the way you own it is
through buying stocks you see when you own is talking to Reid you earn a share
of the profit produced by that real estate investment it's a way to invest
in real estate without the hassle of being a property owner and every time
profits are shared you will receive your portion of the cash distributed and the
best part was that there was no property maintenance no dealing with tenants and
know chasing rent payments required if investing in real estate appeals to you
but you have yet to accumulate enough money to buy a physical property on your
own then I highly recommend placing your thousand dollars in a REIT and there you
have it seven proven ways to invest your first $1,000 thanks for watching if you
want to go from the life you have to the life you deserve then hit the subscribe
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