$1,000 is a solid amount to get started with when it comes to investing, but how (and where?) do you start? It can be intimidating if you have never invested before, but there's nothing to be afraid of; all you need is a little guidance. Here are a few tips on how to make the most out of that $1,000.
Invest in an index fund
Index funds are similar to mutual funds in that they are based on a portfolio of different stocks all pooled together. Index funds however, track against a market index, like the S&P 500 or the Dow Jones. Their goal is not to beat the market, but instead follow the stock markets trajectory. Despite dips and spikes over the short term, the market always goes up. They are a great investment avenue because your portfolio is widely diversified across many different stocks. Another bonus is their minimal maintenance costs.
Contribute to your emergency fund
When it comes to setting up your emergency fund, it is strongly recommended that you start with $1,000 to cover any basic emergencies. It's your "oh, shit!" money. If your car breaks down, your water heater stops working, or you get a super high electric bill, that $1,000 will help deal. Once that is in place, you should aim to have 3-6 months of expenses put aside.
Fund a business
So many business are unable to grow or get started because of lack of funding. Becoming a business investor, either in your own or in someone else's business, is a great way to invest. Not only will you help a business grow, you can also become an equity holder or get your money back with interest.Do your research to ensure that any business you put your money into is one you understand and is a worthwhile investment.
Attend a conference
There are tons of really amazing conferences out there that can help you with your personal development, career advancement, and so much more. Why not invest in yourself? You can learn and grow, but also network with like minded people. Start by seeking conferences out in your city or consider taking a trip out of town; you can make a mini vacation out of it!
Pay down debt
Every dollar you pay down in debt reduces the total amount of interest you'll have to pay back to your creditors. A $1,000 payment towards your credit card debt can shave off loads of interest. Paying off debt is an investment in itself because once you are able to pay down your debt, you can free up more money for other investments.
Invest in your kids college education
College is one of the biggest expenses your children may have, so why not give them a head start? Open up a savings account or 529 savings plan to help save towards their college education. Not only will you minimize their future student loans, you'll be investing in their financial future.