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Turn $1,000 to $2,000
You need an emergency fund, so that if your car breaks, you don't need to incur credit card debt.
After that open a tax-advantaged account like a 401k or a Roth-IRA. If you don't know what you're doing with stocks I'd invest in a diversified Vanguard ETF or something similar.
Look into a target date fund such as Vanguard Target Retirement 2055 Fund Investor Shares (VFFVX). There is a $1,000 minimum to invest in this fund. It is a diversified index based portfolio with low expenses that automatically rebalances. If you know nothing about investing you could do a lot worse than opening a Roth IRA and just adding to this position for the rest for the rest of your life.
Don't invest your own money yet. If you have connections, go to work for them. That way, you get a paycheck and the experience.
I was also considering investing in bitcoin
would recommend investing that 1k into yourself. As someone else said 1k isnt a whole lot of money to invest in any one thing, but the returns you can get investing it in yourself will pay over your lifetime. Start with buying a book like Rich Dad Poor Dad and taking it from there. Start a small business that will give you an exponential return over the years and take that 1k and invest it in the start up costs of said business.My issue with just keeping the money in savings is that I feel like I’ll eventually end up spending it over time and not use it to grow like I want to. Also by connections I mean people that’ll help me, good mechanics, and the lot. Not someone who will hire me sadly.
How I personally invest my money and a life coach once told that you should invest money under $100k into yourself and nothing else.
From your points you mentioned the investing in an old car may be the best to do so you can learn from fixing it.
Bitcoin is too late in my opinion (still a bubble?) and to invest in stock market with $1k is not worth because of the fees you've to pay.
With 1000, don't even think about day trading stock unless it's with some zero-commission service like Robin Hood, and that comes with some severe drawbacks. $10/trade commissions are going to really eat up your account at a typical brokerage.
I'd just invest it at a good entry point and plan to add more. More money makes more money.
Where to invest it is another question. You basically have several levels of risk toleration.
- Invest in some relatively stable ETF, like an index fund or some big company like facebook, adding more on the dips
- Invest in a company you've researched the shit out of, one that you feel has very high long term growth potential. This is dipping into but not quite gambling territory.
- Learn to read overall market direction and trade index futures. With such a small account, I would recommend only trading rises to start off, because you can lose more than your entire account.
- Trade options and commodities - congratulations, bro, you are now gambling.
Since no one is giving you a real answer, and since you're a beginner, I would tell you to invest it in a good growth mutual fund or ETF, and then wait 50 years, assuming you do not add to the fund and growth is a modest 5% per year. This is literally how you turn $1000 into $10000 with little to no knowledge of investing.
Even if you were a ultra-sophisticated investor who is pulling 25% returns each year with $1000 starting principle, you are still looking at 10 years to see $10000.
© 2020 Jake ty
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