9 Best Ways to Invest $1,000 To Grow Your Wealth | Bankrate (2024)

Our writers and editors used an in-house natural language generation platform to assist with portions of this article, allowing them to focus on adding information that is uniquely helpful. The article was reviewed, fact-checked and edited by our editorial staff prior to publication.

If you’re looking to build your fortune, investing can be one of the best places to do it. While starting with $1,000 may not sound like much in the grand scheme of things, you can grow your money over time and create a better financial future for yourself and your loved ones. In fact, it’s never been cheaper or easier to be a new investor, and you have many great ways to start.

Some of the best ways to invest $1,000 will actually allow you to quickly increase your bankroll. For example, you may be able to earn a nearly immediate 50 percent return on your money through special incentives, and then still be able to invest in high-return assets.

Here’s how to invest $1,000 and start growing your money today.

1. Buy an S&P 500 index fund

At the top of the list is buying an index fund based on the , a collection of around 500 of America’s most successful companies. The index has returned an average of about 10 percent over time, letting you double your money in just over seven years.

It’s a great pick for new investors because it offers immediate diversification – meaning reduced risk – and you’ll own some of the world’s best companies. In fact, legendary investor Warren Buffett suggests that most investors would do best by .

2. Buy partial shares in 5 stocks

If you want to put a little spice in your portfolio, and a longer investment horizon, buy a collection of five stocks that you’ve researched. You’ll need to understand what you’re investing in, however, or you’re better off going with an S&P 500 index fund. Your collection of five stocks is also likely to be quite a bit more volatile than an index fund, too, but that’s part of the price of investing in individual stocks.

You won’t even have to worry about having enough money to buy full shares of each stock, if you go with one of the best brokers for fractional shares. And you should check out the best brokerage bonuses for new money, because you may be able to get a little extra something.

3. Put it in an IRA

If you’re wondering how to invest $1,000, putting your money in a retirement account offers one of the highest potential returns. You can opt for a workplace retirement account or open an IRA on your own with an online broker.

There are two types of IRAs to choose from:

  1. Traditional IRA: With a traditional IRA, you can deduct any income taxes you would otherwise pay on that $1,000, if you meet the income limits. Plus, you’ll be able to defer any taxes on your gains for decades.
  2. Roth IRA: With a Roth IRA, you won’t receive a tax break on your contributions, but your money still grows tax deferred. The best part? You can withdraw those funds tax free in retirement.

A few bonuses can also sweeten things. You can stack this strategy with an account opening bonus mentioned above.

You may also be able to take advantage of the little-known Saver’s Credit, which offers a tax credit of up to 50 percent, if you earn less than $43,500 (in 2023) and file your taxes jointly with a spouse or $21,750 as an individual. If you earn above these levels you may still qualify for credits of 10 or 20 percent, depending on your income.

That’s a huge return with no risk for you – and it’s among the best and easiest returns you’ll find.

4. Get a match in your 401(k)

If you have an employer-sponsored retirement account such as a 401(k) or 403(b), check to see if your employer matches any contributions you make to the account. For example, some firms will match 50 percent of your contributions up to 4 percent of your salary. So you could put 8 percent of your paycheck in and the company would provide an immediate four percent. This “free money” is some of the easiest money you’ll ever earn, so it makes sense to do so.

To use this strategy, you don’t simply put money into an account, as you would do with other strategies here. Instead, you’ll need to defer the money from your paycheck. As an added bonus, however, you can also take advantage of the Saver’s Credit here. So it’s possible, depending on your income, to generate a 100 percent return with no risk at all.

5. Have a robo-advisor invest for you

Are you worried about investing your money yourself? You can let a robo-advisor do all the heavy lifting for you. The robo-advisor can select a portfolio based on your risk tolerance and when you need the money, and it uses the same principles that a human advisor would use.

The best robo-advisors also provide calculators and other tools to help you understand how fast your money can grow, and they offer solid cash management accounts with a ton of features. Most accounts let you get started with no money, and it takes just a few minutes to open one.

6. Pay down your credit card or other loan

Of all the investments on this list, the one with the absolute safest return is paying down your debt, especially if it’s high interest credit card debt. If you’re paying 25 or even 30 percent on your cards, that’s money that could otherwise go into your pocket. In fact, it makes sense to prioritize paying down that high interest debt as much as you can before investing.

7. Go super safe with a high-yield savings account

If you need access to your money in less than a few years, then you don’t want to tie it up in a major investment like a stock, which could be down a lot just when you need the money. Instead, go with a super safe option such as a high-yield savings account. These accounts are offering some of the highest returns in years, and it’s easy to find the country’s top yields.

A high-yield savings account is offered by most online banks, and you’ll have immediate access to your cash if you need it.

8. Build up a passive business

Yes, even with $1,000 you may be able to get started with a passive business, especially if you put in a lot of the “sweat equity” (i.e., labor) to get it running. Find a niche you love and then set up a website, or create a course on a topic where you’re the subject matter expert. The capital demands of many passive businesses can be low if you put in the upfront work.

You have a ton of options for a passive business, such as making micro-loans through a crowdfunding platform or even investing in real estate.

9. Open a 529 account

If you or a loved one may be going to college one day, putting your money in a 529 account can help it grow while making those future education expenses more affordable. Any money withdrawn from the account and used for qualified educational expenses is tax-free. That’s an attractive prospect for parents who may have to foot the bill for a child’s education.

In addition, 2022’s SECURE Act 2.0 makes contributing to a 529 account less prohibitive. Beneficiaries of a 529 plan now have the ability to convert a lifetime total of $35,000 from a 529 plan to a Roth IRA without incurring taxes or penalties, so long as the account has been opened for at least 15 years before the conversion.

Bottom line

If you’re looking for the best way to invest money, there’s several options to choose from. Investing $1,000 may be just the start for your investing career, but make it count by taking the time to understand the available options and how to really make that money work for you. You can add to your account over time and build real wealth for yourself and your family.

Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation.

9 Best Ways to Invest $1,000 To Grow Your Wealth | Bankrate (2024)

FAQs

9 Best Ways to Invest $1,000 To Grow Your Wealth | Bankrate? ›

Index funds, ETFs, and mutual funds can all be great for easily diversifying a $1,000 investment. Target-date funds: Commonly used in 401(k) plans and other retirement savings accounts, these funds are managed by professionals to grow more conservative as you get closer to your retirement date.

How can I invest $1000 to make more money? ›

Index funds, ETFs, and mutual funds can all be great for easily diversifying a $1,000 investment. Target-date funds: Commonly used in 401(k) plans and other retirement savings accounts, these funds are managed by professionals to grow more conservative as you get closer to your retirement date.

How much is $1000 a month for 5 years? ›

In fact, at the end of the five years, if you invest $1,000 per month you would have $83,156.62 in your investment account, according to the SIP calculator (assuming a yearly rate of return of 11.97% and quarterly compounding).

What is the safest investment with the highest return? ›

These seven low-risk but potentially high-return investment options can get the job done:
  • Money market funds.
  • Dividend stocks.
  • Bank certificates of deposit.
  • Annuities.
  • Bond funds.
  • High-yield savings accounts.
  • 60/40 mix of stocks and bonds.
May 13, 2024

How to flip 1k to 10k? ›

The Best Ways To Turn $1,000 Into $10,000
  1. Retail Arbitrage.
  2. Invest In Real Estate.
  3. Invest In Stocks & ETFs.
  4. Start A Side Hustle.
  5. Start An Online Business.
  6. Invest In Alternative Assets.
  7. Learn A New Skill.
  8. Try Peer-to-Peer Lending.
May 24, 2024

How to turn 1000 into passive income? ›

How To Generate Passive Income With Just $1,000
  1. Invest In Property You Can Rent Out. ...
  2. Invest In Real Estate Investment Trusts. ...
  3. Invest In the Stock Market. ...
  4. Put Your Funds Into a High-Yield Savings Account or CD. ...
  5. Lend Your Money to Peers.
May 2, 2024

How can I make $1,000 dollars right now? ›

How to make $1,000 fast
  1. Sell stuff you already own.
  2. Deliver food.
  3. Pick up a part-time job.
  4. Rent out unused space.
  5. Start freelance writing.
  6. Try affiliate marketing.
  7. Drive for a ridesharing service.
  8. Find odd jobs.
Jan 17, 2024

How much is $30 a month for a year? ›

$30 monthly is how much per year? If you make $30 per month, your Yearly salary would be $360. This result is obtained by multiplying your base salary by the amount of hours, week, and months you work in a year, assuming you work 40 hours a week.

How much is $5 a day for 30 years? ›

Key Points. If you save $5 per day, that would be the equivalent of nearly $55,000 over a 30-year period. By investing in the top growth stocks, you may potentially grow that $55,000 into $1 million or more.

How much money do I need to invest to make $4000 a month? ›

Making $4,000 a month based on your investments alone is not a small feat. For example, if you have an investment or combination of investments with a 9.5% yield, you would have to invest $500,000 or more potentially. This is a high amount, but could almost guarantee you a $4,000 monthly dividend income.

Should a 70 year old be in the stock market? ›

If you're 70, you'd look at sticking to 40% stocks. Of course, there's wiggle room with this formula, and it's really just a way to get started. And for many older investors, a 50-50 split of stocks and bonds is what's preferred throughout retirement, and that's fine, too.

What is the safest asset to own? ›

Safe assets are those that allow investors to preserve capital without a high risk of potential losses. Such assets include treasuries, CDs, money market funds, and annuities. There is, of course, a risk-return tradeoff, such that safer assets typically offer comparatively lower expected returns.

How to get 10% return on investment? ›

Where can I get 10 percent return on investment?
  1. Invest in stocks for the short term. ...
  2. Real estate. ...
  3. Investing in fine art. ...
  4. Starting your own business. ...
  5. Investing in wine. ...
  6. Peer-to-peer lending. ...
  7. Invest in REITs. ...
  8. Invest in gold, silver, and other precious metals.

How can I double 1000 dollars? ›

One of the easiest ways to double $1,000 is to invest it in a 401(k) and get the employer match. For example, if your employer matches your contributions dollar for dollar, you'll get a $1,000 match on your $1,000 contribution.

How can I turn $1000 into more money? ›

Here's how to invest $1,000 and start growing your money today.
  1. Buy an S&P 500 index fund. ...
  2. Buy partial shares in 5 stocks. ...
  3. Put it in an IRA. ...
  4. Get a match in your 401(k) ...
  5. Have a robo-advisor invest for you. ...
  6. Pay down your credit card or other loan. ...
  7. Go super safe with a high-yield savings account. ...
  8. Build up a passive business.
Apr 15, 2024

How to double $5000 quickly? ›

For a quick return on a $5,000 investment, consider options like stock trading, especially in high-growth sectors or investing in a diversified mutual fund. Short-term P2P lending can also be a way to see quicker returns, though it carries higher risk.

How can I double $1000 dollars in a year? ›

How Can I Double $1000? If your employer offers a dollar-for-dollar match contribution, you can double $1,000 by investing it in your 401(k). Other than that, there's no easy or risk-free way to double $1,000—you can invest the money in individual stocks, but there will be risks involved.

How to turn $1000 into $10000 in 6 months? ›

6 Ways to Turn $1000 into $10000
  1. Invest in Real Estate.
  2. Invest in Stocks and ETFs.
  3. Get Out of Debt Now.
  4. Start an Online Business.
  5. Retail Arbitrage.
  6. Invest in Yourself.
Jan 23, 2024

How to flip 1000 dollars fast? ›

How To Flip $1,000 Dollars
  1. Buy And Resell Clothing. ...
  2. Invest In Real Estate. ...
  3. Buy & Sell Collectibles. ...
  4. Start An Online Business. ...
  5. Rent Out Assets. ...
  6. Amazon FBA. ...
  7. Invest In Dividend-Paying Stocks & ETFs. ...
  8. Stake Crypto.
May 24, 2024

How much do I need to invest to make $1000 a month? ›

A stock portfolio focused on dividends can generate $1,000 per month or more in perpetual passive income, Mircea Iosif wrote on Medium. “For example, at a 4% dividend yield, you would need a portfolio worth $300,000.

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