Once you get your paycheck, the best way to spend it is to invest. Figuring out the best way to invest your money in is getting extremely confusing and difficult with the numerous options that abound. With $1,000, what would be the best investment tool to grow your wealth immensely?
Diversifying your portfolio gets even more challenging especially with the high fees. These are however mere roadblocks to your success route than one which you have to topple one by one.
While $1,000 is a hefty investment, this would not be enough to pay your investment trader or broker that manages your funds. If you are looking to invest short term or long term, would that investment suffice? Are you ready to invest? What kind of investor are you? These are just a few of the questions you need to have ready answers with before you start investing.
Here are the best ways to invest 1,000 dollars short term:
- Invest in 401k.
Investing in 401k is a great way to double your investments. The profit range would depend primarily on the plan that you choose for your investments. When you place your money into 401k, your company will also match that with an investment so you get it double at some point. The amount of investment that your company would put in could vary though. However, the amount would depend primarily on the matching percentage. Mostly, companies would contribute around 3% to 6% of your payout. This is certainly free money sitting right there on top of your own investments. Most of these 401k plans do not accept lumpsum payments of contributions so the $1,000 would serve as a cushion in case you are short with your monthly bills repayment. If in case your employer wouldn’t agree to provide a match or you have already maxed out your investments then you can start looking for other options.
- Open an IRA.
With opening an Individual Retirement Account (IRA), this would work like 401k. There are no matches from your company because you opened this solo but you still get to enjoy tax benefits like choosing between having a tax-free investment or tax-deffered type of investment. One advantage of opening an IRA is that you can choose between having zero to low minimum deposit requirements. Many brokers would require very high deposits but some IRA providers would work with your $1,000 budget.
The costs can make or break your investments, so you should prioritize with investing for the purpose of retirement which would do well if you put your money on ETFs and low-cost index funds. You must always do a background check on the investment companies so as to verify their legitimacy and avoid seeing your investments go to waste. As broker commissions are usually set at $5 to $10, you might want to explore other investment tools online like a free investing app that can get you started on your investment journey for $1,000 right away.