Got a spare $1000 to spend? There are lots of ways to splurge this money – it could go towards a car or a vacation abroad. However, by investing this money you could grow it into something even larger.
Here are just six ways to invest $1k.
Pay off debt
How is paying off debt an investment? Well, in most cases debt accumulates interest, and the longer a debt goes unpaid, the more interest you’ll build up. By paying off debts early, you could spend less in the long run – essentially saving yourself some extra money. It’s not the most exciting way to invest $1k, but it is sensible.
Put it in a savings account
Putting your $1000 in a savings account could be another way to build it into something greater. Ideally, you want to look for a high interest saver with an interest rate of over 2%.
Look beyond standard savings accounts and consider bonds and certificates of deposits. It could even be worth looking beyond brick-and-mortar banks and considering online savers – some of which can have much higher interest rates.
Saving accounts won’t make you a huge return compared to other investment strategies, but they are the most risk-free form of investment.
Try peer-to-peer lending
Peer-to-peer lending involves giving your money to someone else as a loan. They then pay this amount back with interest. By going through a regulated peer-to-peer lending platform, you can ensure that your money will get paid back.
Interest rates for lending $1k can be as much as 9%, making it a far more lucrative strategy than using a saver.
Consider forex trading
What is forex trading? Simply put, this type of investment involves trading foreign currencies. Given that currencies fluctuate in value, it’s possible to buy a currency and wait until it rises in value before selling it for a profit.
There is a risk of loss when it comes to forex trading, but for the most part currency values rarely ever fall or rise dramatically and these movements can sometimes be predicted more easily than other investments.
Put it in a mutual fund
Ever fancied investing in stocks and shares? Mutual funds are one of the easiest ways to do this if you haven’t got any stock market know-how. These funds are pools of money into which multiple investors can contribute money.
An investment expert in charge of this pool of money and decides into which stocks and shares to invest. Everyone within the mutual fund then receives the profits of this investment.
You may have to pay a small fee to keep your money in a mutual fund, which is something to be prepared for. There is also some risk to this type of investment, although it is generally very low.
Start a business
For those with entrepreneurial dreams, $1k could be just what you need to launch your own startup. Of course, there are some business ideas that require a lot more funding than this, however, it could still be a nice contribution saving you from having to take out a larger business loan.
How would you invest a $1000?