Investing for Beginners: What’s the Best Way to Invest $1,000?

You’ve heard your whole life that you should invest your money. That’s the dream, isn’t it? To make your money work for you.

It’s not as easy as it sounds. You probably still have a lot of questions, like what should you invest in? How much money do you need to start an investment?

It’s a common misconception among new investors that you need a significant amount of money to start an investment, but you can start investing with as little as $1000.

So what’s the best way to invest $1,000? Keep reading for five great ways to get your investing career started.

Foreign Exchange

Many investors participate in trading on the foreign exchange.

You may have heard investors refer to this as Forex trading. If you’re not already familiar, the foreign exchange is a currency market. You’ll be comparing the value of one country’s currency to another.

For example, you may look at the value of the US dollar (USD) against the value of the European euro (EUR). Exchange rates fluctuate constantly, even if it’s only a few pennies at a time.

The same idea of buying low and selling high applies to Forex trading.

The best part about Forex trading is the ability to use leverage. Leverage is what allows small-time traders to get in the game with more financially endowed traders. Because of leverage, you can start investing in forex with less than $1,000.

Invest in Yourself

It may sound cheesy but bear with us for a minute.

Investing in yourself is always guaranteed to have some sort of return.

We’re not talking about getting your nails done or going out and buying a new wardrobe. Think more along the lines of investing in financial classes. You don’t have to enroll in full-time at a college to take one or two classes. Try looking into summer classes that will help you increase your financial understanding.

You don’t have to limit yourself to finances. You can take a class for anything you think you could turn into a profit.

Always wanted to open a restaurant? Try a cooking class. Tired of paying so much of your hard-earned money to the IRS? Take a class on tax law. The number of deductions you can take might surprise you.

Open Your Own Business

Most people think that starting a business takes upwards of $50,000. After all, you have to have money for rent, materials, labor, financial advisors, and more.

But, you don’t need to start big to open a small business.

You can start with something small, like selling cookies out of your kitchen. Eventually, you’ll be able to afford a brand new bakery in the perfect location.

If you don’t think that your business will be able to grow from the ground up, you probably shouldn’t invest huge amounts of money into it.

Another benefit of starting your business off small is that you can try it and see if you like it. Just because you love baking cookies doesn’t mean you’re going to love doing it as a profession. What if you get tired of standing in a hot kitchen for eight hours to sell cookies for a dollar?

At least if you’ve only invested $1,000, it’s not so horrible if you get tired of it.

Check out Kickstarter

If you want to get your toes wet, check out websites like Kickstarter. These types of sites let entrepreneurs list their business ideas for investors.

Investing in a new company typically means that you will own stock in the business.

With that said, don’t go through the listings and throw money at anyone who has a good idea. Look at their business plan. Do they have a plan to execute their idea?

Fish night lights might seem like a great idea, but unless the person seeking funding has a way to genetically engineer a goldfish, it’s not the best idea to invest in.

Warren Buffett started his investing career with baseball cards. He said that the best thing to invest in is something you know and love.

Diversify Your Assets

If you already have some investments started, use your next investment as a way to diversify your assets.

The best investors know that the market fluctuates and you can’t always predict what’s going to happen. If you don’t want to find yourself buried in a financial hole, diversifying your assets helps you protect your capital long enough for the market to fluctuate back in your favor.

Imagine you had thousands of dollars tied up in investments for the Yahoo search engine. It didn’t take long for a competitor to rise and destroy your stocks, but if you also had investments in Bing and Google, your earnings outweighed your losses.

The more you can diversify, the more financially secure your investments will be. Of all the investing tips we can offer, this one is the best.

Best Way to Invest $1,000 – Which Will You Choose?

No matter how you choose to invest your money, the goal is to get started. The best way to invest $1,000 is to do something – anything. Letting the money sit in a piggy bank doesn’t do anyone any good.

Remember that even if your return rate is low, it’s still more than you were making before you started investing.

Browse through the rest of our site for more financial tips and tricks to help you grow your capital.