- 10 different ways to get started with investing
with just $1,000.
That is the topic of today's video.
We've got 10 ways for you to get started,
so let's hop into it.
(gentle upbeat music)
Hey guys, it's Justine with The College Investor:
Investing and Personal Finance for Millennials.
So you've probably heard investing is the adult thing to do,
but, what is it, really?
Well, all it simply means
is you are going to commit your money
to these types of accounts
with the hopes that your money will grow over time,
and one of the best ways to grow your money
is by doing it in various investing platforms
and using different investing strategies.
And so let's get into number one.
Number one are stocks, mutual funds,
and ETFs or exchange-traded funds.
Now, these are probably the most popular ways
to invest your money because they are investing in equities.
Why are people so interested
and curious to invest in equities?
Well, that's because the stock market, historically,
has earned 7% over the last 60 years.
Well, that 7% is just about enough
to cover last year's inflation,
but typically, it covers much more than that.
Keep in mind when you are investing in stocks,
mutual funds, or ETFs,
that there is going to be a certain level of risk.
In fact, investing, in general,
there's always going to be a level of risks,
no matter what you choose,
but the important thing here
with stocks, mutual funds, and ETFs
is that you look for these three things.
Number one, you'll want to diversify your portfolio.
In other words, pick a variety of funds to invest in
to spread out and minimize that risk.
Number two, you'll want to pick something
that has low fees or no fees
to help you minimize the amount of money
that would deter your investments from growing.
And number three, you'll wanna look
for the lowest expense ratio possible.
So there's a variety of investing platforms
to get started with just $1,000,
and that's why you'll wanna check out M1 Finance.
This is a platform I've been experimenting with
for the past year,
and it's super easy to get started.
All you have to do is download their app,
hop onto the platform,
and go ahead and fund your account with $1,000.
It's one of the easiest platforms to use out there.
We will be sure to put our link
in the description box below for you to sign up.
Number two are bonds and treasury securities.
When you are investing in bonds,
you are basically investing in debt
and that's because the government or various corporations
will issue bonds to help raise money for various projects.
If you are buying a treasury security or a government bond,
essentially, you are lending money to the government
for them to work on various projects,
like building bridges, building new schools, infrastructure,
and they have promised to pay you back that money
plus a little bit of interest.
Now, because it's backed by the government,
there is somewhat of a guarantee on your money
unless you are going with a corporate bond.
In that case, there is a little bit of risk
because that corporation very well may go bankrupt
and you could lose some money there.
Now, the things with bonds and treasury securities
that you'll wanna look out for
is that, typically, the interest that you earn on bonds
is a lot lower than what you would earn
on stocks, and mutual funds, and index funds.
Number three, invest with a robo-advisor.
If you're confused about which bonds to select
or which stocks to select,
then a robo-advising platform
very well could be the option for you.
So a robo-advising platform will take your money
and invest it automatically into different funds
that best fits your risk tolerance
and the strategy that you have for your investments.
Now, the reason why these are so great
is because they have a computer software
that does those allocations for you.
In other words, there's not a human being on the other side,
a financial advisor who is investing
into index funds, or stocks, or bonds on your behalf.
Rather, it's a computer software,
which means it minimizes the amount of overhead
that that investment platform has,
thus passing along those cost savings to you.
The two robo-advising platforms
that you'll wanna check out are Wealthfront and Betterment.
With Wealthfront, if you use our link signing up
in the description box below,
you can get your first $5,000
waived of any type of management fees
when you sign up with The College Investor.
Now, I've personally been experimenting with Betterment
for the better part of two years now.
And I have to say, it is fantastic.
It's so easy to be able to set up
automatic monthly investing contributions into Betterment
and then just let it ride.
I started actually with $1,000 about two-ish years ago
and I've now since grown that account to over $3,000
just by simply investing the money,
letting it set and forget,
and then just doing a simple $50 per month in contributions,
and it's a really great way to get started
with investing with very little money.
Number four are stock options.
Stock options are a little bit riskier
than investing in actual stocks
because with stock options,
these are actually contracts
that allow you to buy and sell different stocks.
So when you purchase stock calls,
these are options where the stock price is expected to rise.
Contrastly, if you were to purchase stock puts,
that's where you would expect that stock price to fall.
It can get a little bit complicated
because you are basically working with these contracts
on any future expected prices.
Sometimes, they can really work out in your favor,
but you really have to be thorough in your research
if you're wanting to work with stock options.
If that's the case,
then you wanna check out TD Ameritrade
that has the capabilities
to do these different types of spreads with stock options.
Number five is real estate,
and I don't necessarily mean
that you have to purchase a home
and build up equity over time,
although that is also a great investment.
You can actually do this with very little money, $1,000,
by using crowdfunded real estate investing.
This simply means that you pool your money
with other investors
and invest in various properties.
And, as of recently,
you don't need to be an accredited investor to do so.
You can use platforms like Fundrise and RealtyMogul
in order to get started with investing in real estate.
I'm very curious to know.
Let us know when the comments,
would you like to see a review
on something like Fundrise or RealtyMogul?
Leave us a comment below
and let us know if that's something you'd like to see
on The College Investor channel.
Number six are precious metals.
Now, there are people
who are for investing in precious metals
and those who are against it.
Those who are for investing precious metals, like gold,
say that this is something that is tangible
and that holds their value.
However, those who are against investing
in something like gold,
say that, "Well, they don't pay dividends
and it is just a hunk of rock that's laying around.
What do you do with it?"
However, over the past 30 years,
the value of gold has risen more than 300%.
So there is a little bit of merit
to investing in something like precious metals.
However, if you compare that to the Dow Jones,
which has risen over 1,000%, almost four times as much,
then you're probably gonna see,
"Okay, maybe investing in the stock market
is slightly better.
Okay, way better than investing
in just precious metals alone."
But, if you wanna diversify, which we are all for,
there are a few ways that you can go ahead
and purchase precious metals.
One, you can buy it as an ETF through your brokerage.
Two, you could actually buy the physical gold coins
from U.S. Mint.
And three, you can buy gold
through a precious metal brokerage like Vaulted or APMEX.
Number seven are commodities.
Commodities, think things like oil, natural gas, soybeans,
cattle, corn, wheat, all of the things
that people are trading, and growing,
and using as resources.
You can actually invest in these commodities.
And mainly, that's through the form of ETFs or ETNs.
Cryptocurrency like Bitcoin and Ethereum
are also treated and traded as commodities,
so you could also use your $1,000
to invest in these types of commodities.
Number eight, lending money to others.
Now, I don't mean just lending money to a friend
and getting paid back.
You can actually use legit platforms online
to invest your money
in the forms of small loans to other people
and get paid back via interest.
Now, this wouldn't be the first place that I would go
when I'm getting started with investing,
but once you have a solid portfolio built up,
maybe this is a little piece of the pie that you cut out
and start looking into.
Take a look at Prosper or LendingClub
and see if those platforms are right for you
to start lending money to others
and getting paid back with interest.
Number nine are certificates of deposits or CDs.
CDs are considered a low-risk investment
because you're typically working
and opening CDs with a bank.
They're holding onto your money for a set period of time,
in which case, you do not have access to that money,
you can't withdraw it.
And then once that period of time is over,
they'll pay you back plus interest on that CD.
However, the interest rates are typically pretty low.
They're pretty comparable
to maybe what some bonds will earn in interest rates.
Now, I've used CDs in the past.
I still have one open with about $3,000 in it,
and it was earning about 3% interest.
Now, it was a good way for me to park some money in there
that I knew I was going to use for a future date,
but a very short-term future date.
Think within like the next one to three years,
I wanted to use that money,
so I didn't wanna have the risk of losing it.
And because I didn't wanna have that risk of losing it,
I got paid out interest,
but very little amount of interest.
You can do this directly with a credit union or a bank
and open up those accounts and pick your maturity dates.
Sometimes, the maturity date is only 30 days.
Sometimes, it's 12 to 24 months.
The longer that you have your money in a CD, typically,
the better payout in interest will be.
And number 10 are collectibles.
Think about anything that you can really collect
such as comic books, coins, art,
anything that's considered a collectible.
And that value of that tangible item
actually grows over time.
One of the ways that I've invested
in collectibles in the past
is by investing in a piece of art with Masterworks.
Now, you actually don't see any investment returns
until that piece of art sells via Masterworks,
but it's a really cool way
once you get your portfolio built up
to kind of dabble in these extra ways to invest your money,
and I think collectibles is one of those things
that could be really fun to say,
"Yes, I own a piece of art
and I made a little bit of money on it."
Investing with $1,000 to get started
can feel a little daunting,
but hopefully, this list of 10 ways to get started
will help you see exactly which one
sounds the most exciting,
which one matches your level of risk,
and which ones are really going to help you
grow your investments over time.
Don't forget to hit subscribe.
Be sure to check out more at thecollegeinvestor.com,
and we'll catch you in the next video.
(gentle upbeat music)