Top ways to invest $1,000.00 dollars
In 2022 more than ever there are countless options when it comes to investment opportunities. Due to the wide amount of options available, now more than ever the concept of "investing" can be quite daunting.
In this post, I will go over some smart ways of investing the nominal sum of $1,000.00 dollars.
What Should I Know First?
The first thing to make sure of is that your current situation is taken care of. By this I mean, make sure all your current financial needs are taken care of before you decide on an investment strategy.
The last thing you want to do is spend the only $1,000.00 dollars you have available in your bank account.
A great strategy is to always have at least 3 to 6 months of savings ready to take care of your bills in addition to any amount you want to start investing. With that said, let's look at the next step.
Long Term Investments or Short Terms Investments?
Long Term Investments are investments where you plan to invest your money and leave it there for more than a year.
Examples of these types of investments can be real estate, mutual funds, or Annuities.
For Real Estate long-term investment, a popular strategy is something called REITs, or Real Estate Investment Trusts.
Let's look at Annuities next. Annuities are financial products that pay you back every month for simply not touching the investment amount.
If you choose to withdraw the investment amount you will need to pay fees on that withdrawal. Click here for a list of best annuities as of 2022.
Short Terms Investments are defined as investments where you can quickly withdraw the amount you put into them.
Some short-term investment examples are High-yield savings accounts and Short-term U.S. government bond funds.
High-yield savings accounts are special savings accounts that normally pay up to 25 times the national average when compared to the regular savings account you would find at your local bank.
Click here for a list of great options when it comes to High-yield savings accounts.
Short-term U.S. government bond funds are backed by the government and terms of investment can be up to 5 years.
So you invest your money into a "government bank account" and that money is then used by the government in whatever they want to invest it in with the condition they pay back a predetermined interest rate(normally 1% to 2%)
The minimum investment amount for these is, you guessed it, $1,000.o0 dollars and are generally sold in $5k increments.
How To Choose Between Long Term or Short Term investments?
The answer here is both. Do proper research for each of the possible vehicles mentioned above and if possible, have what is called a diversified portfolio.
A diversified portfolio happens when you have your money invested into long-term and short-term investment vehicles.
A key rule that will make the difference between success and failure when investing long or short term is consistency.
Make sure that whatever investment vehicle you use for your $1,000.00 is something you will stick with based on the life of the investment vehicle. You don't want to change your mind every day or every week.
This does not mean don't pay attention to how your investment is performing but, do know that most types of investments require time and patience, even if it's short term. This brings me to my last point.
Become Very Familiar With KPIs For Both Your Short Term And Long Term Investments
Key questions to ask:
- How much cash does this investment require to get into it?
- How long has it been since I invested?
- Since I invested, have I seen any growth margin on the initial investment amount? ask this question every month.
- Based on the answers to the above questions, does it make sense to stay in this investment or cash out?
If you keep asking the above questions of all your investments, it will keep you informed in not only the investment's performance but will open your mind up to new investments that might be added to, or replaced with your current investment.
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