How To Invest $1,000 💸 7 Ways To DOUBLE Your Money In 2020 #Best Education Page #Online Earning

- So in this video today,

we're going to be talking about how to invest $1 000.

And this is really the point that most people are at

when they're ready to make a more serious investment

because, often times, I'll have people approach me

saying they have $100 to invest or maybe $500 or so,

but by the time you have $1 000 to invest,

that is actually a pretty sizable amount of money.

And you definitely want to be more careful,

or at least put some more research into

what you're actually going to be investing in

because you should respect that $1 000

and really be looking for a sound investment option.

So what I'm gon' provide you guys with today

are, in my opinion, what I feel are seven of the best ways

to potentially invest your first $1 000.

And then also, I'm going to be talking about

a couple of options here that

maybe are things that you didn't really expect

but they're very important steps

you want to take financially,

as you begin to become an investor.

Now, if you are completely new to investing

and this is a new realm and new world for you,

I wanna go ahead and let you guys know

about a completely free investing course.

I literally just finished

this thing up a couple of weeks ago

and it's about four hours long.

Pretty much goes from A to Z.

Everything you need to know as a beginner

entering the stock market for the first time.

That's gonna be the top link in the description below.

And no, this is not a free course

where then I upsell you to a paid course.

It's a 100% free, very comprehensive investing course.

Top link in the description

or it is freeinvestmentcourse.com.

So, I would definitely recommend taking that course

or bookmarking that page for later

if you are looking to learn the ropes

and the basics as a stock market investor.

The other thing I wanna mention really quick,

I'm going to include time stamps down below,

if you guys wanna skip ahead

or move to different sections of this video.

And I'll also be including links

to a couple o
f the different brokerages and banks

that I recommend here.

Some of those links are affiliate links

and that means that at no additional cost to you,

I do earn a commission in the process

if you use some of these links.

So it's a way for you guys to give back to me

at no additional cost to you.

So I certainly do appreciate your use of those links.

But that being said,

let's get started with number one here.

And in my opinion,

this is the best way

you can start out investing your $1 000.

And that is by setting aside an emergency fund.

Now I know what you're saying.

You're gonna say,

you know, that sounds really boring.

I'd rather invest my money and see my money grow.

But one of the very best things you can do with $1 000

is literally just it aside

in a rainy day fund in case of emergency.

And I'm not just, you know,

saying this because it sounds good to me.

I actually have a statistic here to back this up.

So Career Builder did a study

and they found that 78% of workers,

the majority of workers, the vast majority,

are all living paycheck to paycheck.

And if you're not familiar with what that means,

basically that means that every single week,

they run out of money

and then they don't have any more money

until that next paycheck comes in.

And the problem you run into

when you're in this type of financial situation

is when you have any unexpected expenses come up,

like a car repair or a medical bill,

well, when you're paycheck to paycheck,

what you're going to be doing is

putting that on a credit card

and using debt to pay for these unexpected expenses.

So rather than doing that,

rather than reaching for the credit card

and being in a paycheck to paycheck situation.

And maybe you're saying, well that's not me

but statistics are telling me that

78% of you guys watching this video

are most likely paycheck to paycheck.

Well, if you're in this situation, guys,

be honest with yourself.

And one of the best things you can do

is take that $1 000 and set it aside

for an emergency fund.

And no, buying the iPhone is not an emergency.

Going on vacation is not an emergency.

Emergency fund means, you know, car repair, dental bill,

all of a sudden your furnace goes out.

That is what an emergency fund is designed for.

Now there are a couple of things

I would recommend doing here.

A lot of people make the mistake

of taking their emergency fund,

leaving it in their checking account

where they have easy access to it.

So what I recommend doing

is putting that money in a completely separate

online savings account.

Now, as far as online savings accounts go,

one of the best ones out there

in terms of the interest you're earning right now

is Betterment Everyday savings,

currently paying 2.38% APY.

So if you guys are looking for

a really solid online savings account

that's basically paying the highest interest rate

on the market right now,

relative to the opening balance,

Betterment Everyday, you really can't go wrong with them

in terms of the interest rate they are currently paying.

Your average savings account,

at a traditional financial institution,

is usually paying 0.06%,

very little interest.

So if you are going to be putting your emergency fund

in a separate bank account,

you know, why not earn a high interest rate

and a higher yield

than your traditional bank account?

So if you guys wanna check out Betterment Everyday savings,

that's going to be linked up in the description below.

As I said, they're currently paying a 2.38% APY

and the minimum opening balance for an account with them

is literally just $10.

So if you just wanna open it up

and ease your way in to building up a $1 000 emergency fund,

you can open up an account with just 10 bucks.

So now let's assume you're already in a situation

where you have an emergency fund in place,

you have your rainy day fund and you're saying,

where else can I invest this $1 000.

Well, option number two here

on one of my favorite ways to invest

is to be a stock picker.

So let's say you are, in fact, interested

in being an individual stock owner

and maybe you have a couple of companies

that you really enjoy their products or their services

or whatever it maybe.

Well, one of the great options you have available to you

is to go out there and buy shares of that company's stock

and share in ownership of that company.

So, one of my favorite ways for people to invest a $1 000

is to pick one or two of their favorite companies out there

and then become a shareholder of that company.

And maybe you're not going to slam it out of the park

and maybe you're not gonna, you know,

have a crazy good return with this company,

but I will tell you from my own personal experience,

you will learn so much as an individual stock owner.

Now, it's not for everybody

and I'm gonna have an option for you guys

in a little bit here,

if you don't wanna be a stock picker.

But if you're interested in that active selection

with your investments,

I think it's gonna be one of the best learning experiences

for you out there.

To basically figure out

what are your favorite companies out there.

What are your favorite products?

And then investing in that company stock.

Now what I will say is I wouldn't recommend

just picking a random stock out of the blue.

Or buying into penny stocks or anything like that.

But if you do have companies out there

that you are knowledgeable of,

that you understand and that you enjoy,

well than why not buy a couple of shares of these companies

and have that be your $1 000 investment.

So, for example, I love Apple products,

I'm an Apple shareholder.

And so, if you're a fan of Apple or Microsoft

or maybe some of these different companies out there.

Maybe you love going to Japotlay,

well maybe you decide that you wanna be an owner

of one of these different companies.

Now, as far as trading stocks goes,

there's a variety of different platforms out there.

And the one I wanna recommend to you guys is called Webull.

Now Webull is a newer trading platform

but they offer accounts to people with $0 minimum,

so there's no minimum to open an account with them.

And they also charge $0 in commission, $0 in fees.

It is literally 100% free investing.

And they even go so far as to offer you guys

a completely free stock,

just for opening an account with them

and funding it with $100 or more.

So if you guys wanna open an account with Webull

and get that completely free stock,

that's going to be linked up in the description below.

I went ahead and di this a couple of weeks ago

and I ended up getting a free share of Ford stock,

which trades for around $10 per share.

It's basically a lottery system

so you may get a very high value stock

or a lower value stock

but, for me, opening an account, funding it with 100 bucks

and getting a free $10 stock,

that was a no-brainer for me.

So if you guys want to get that immediate ROI there

and get that free stock,

that's gonna be down in the description below.

All you have to do is open and fund with $100 or more.

So, option number three for investing $1 000

is one of my personal favorites right now

and that is investing in crowd funded real estate.

Now this is actually a relatively new investment

because prior to changes of certain laws,

this type of investing was just not accessible

for what are called non-accredited investors.

So, accredited investors are high net worth investors

that are fiscally able to take on a certain level of risk.

And so, basically, after they changed some laws,

they said hey, you know what?

Crowdfunding should be a way that

people can raise money for the means of investing

in different projects like real estate.

And they also said, you know,

this is definitely not a high-risk investment

like some of these other private deals

so a lot of these platforms offer options

for non-accredited investors.

So I am personally invested

in this platform here called FundRise.

I've been with them for about a year and a half

and I have really enjoyed the experience of being

a FundRise investor.

Now the returns after fees from FundRise so far

have ranged from 8.76% all the way to 12.42%.

So the returns have been very solid

but I will say this,

it has a very limited operating history

because the law's just recently changed,

allowing for this type

of crowd funded real estate investing.

But FundRise is really a great platform for it.

Essentially, what you're doing

is pulling your money with investors

from all over the United States.

And putting your money into real estate projects.

Some of them are equity investments,

where you're actually an owner in that property

and you're collecting dividend payments.

Or the rent is actually being paid out

in the form of dividends to shareholders.

And then you're also, in some cases, just a debt investor

where you're holding the note and financing a project.

The FundRise platform itself is a really easy-to-understand,

user-friendly platform

and it's all portfolio-based investing.

So, you essentially put your money

into a different portfolio.

Some are growth or income-oriented.

And then you are invested across

a collection of different real estate projects

and you can literally read up on every single one

and understand exactly what your money is backing.

Now that being said, as much as I do love FundRise,

I just wanna go ahead and tell you guys,

it is a long-term investment.

So, I would not recommend crowd-funded real estate

to anybody with less than a five-year time horizon.

However, if you are interested

in being a longer term investor,

and you wanna get into private real estate

without those high barriers to entry,

I see it as one of the best options out there.

FundRise has already invested over $2.5 billion

into real estate.

They're a very trustworthy platform.

Like I said, I have money with them

and I plan on building out that portfolio.

And the other advantage to crowd-funded real estate

is that you are not on call, you know,

as you would be with a traditional,

physical real estate investment.

So, I have my crowd-funded real estate investment

and I also own some physical real estate

as an owner-occupied investor.

And I'll tell you, just for example,

this afternoon, I've got to go downstairs into my basement

and have somebody come check out

my geothermal cooling system, for example.

So, you don't have those headaches

with crowd-funded real estate.

Everything is managed for you,

it's completely passive.

With a traditional real estate investment,

you have things that you're managing.

You have to take care of the property, collect rent.

Yes, the returns can be higher, for sure,

but it is definitely not as passive

as just putting your money into a private

crowd-funded real estate investment

and then just earning your dividends

and watching your money grow.

So if FundRise does interest you guys

and you wanna get some more information,

that's gonna be linked up down in the description below.

Okay, so option number four for investing $1 000

is for somebody who's more of a hands-off type of investor.

They wanna put their money into a fund or into ETFs

but they don't want to have to figure it out themselves

or figure out portfolio allocation.

They don't want to be a stock picker,

they just want somebody else to facilitate

the entire process for them.

Well, that is where these robo-advisors

definitely come in handy.

So the way you used to go about investing was

you would go to the office of a financial advisor

and you would tell them you're looking to invest some money

and they would take that money,

build out a portfolio for you

and invest you across multiple different assets and funds.

Well, the problem with investing $1 000

is that most financial advisors

wouldn't be willing to take you on as a client

because you simply do not have enough money

to invest with them

for it to be worth their while.

On the other hand,

most financial advisors would charge

a 1% annual asset management fee,

which was basically the industry standard.

So, now there are a variety

of these different robo-advisors out there

that do basically the same thing

as a traditional financial advisor,

but it's all algorithm and technology-based.

And as a result, it is significantly less expensive.

So one of the most popular robo-advisors out there today

is called Betterment.

And they charge just a 0.25% annual asset management fee.

And since the entire process

is basically handled electronically,

you know, there's no human involvement

and the minimum to get started is basically $0.

Because it doesn't necessarily cost them more money

to bring on new accounts.

So a robo-advisor is 100% passive investing.

You basically go through a welcome survey

where they ask you about your goals,

what your saving or investing for,

and they will build out a portfolio

based on your goals, based on your objectives

and what you're looking to do with that money.

After that, you will literally do nothing.

You'll leave that money with them,

they're gonna continue to reallocate that money as needed,

rebalance your portfolio.

You don't have to do anything.

So, if you are interested in that type of investing,

that would be a robo-advisor

and it's gonna be, you know, completely passive,

hands-off investing

where there's really no active involvement on your part.

You may decide to add more money with time

but basically with the robo-advisor,

it's just a set-it-and-forget-it investing strategy.

Letting somebody else do that work for you.

And on a $1 000 investment,

that 0.25% is just $2 and 50 cents per year,

so we're not talking about very much money at all here

to have your money fully managed

and just not something you're worrying about day-to-day.

So if you guys do wanna check out Betterment,

they're going to be linked up in the description below.

That is one of the largest

and most popular robo-advisors out there today.

And as of April 2019,

as crazy as this sounds,

Betterment had $16.4 billion of assets under management.

So these robo-advisors have really come on to the scene here

and kind of disrupted the traditional

financial advisor industry

by offering essentially the same, exact service

at a fraction of the price.

And also being able to take on much smaller accounts.

So if you're into the passive,

set-it-and-forget-it investing,

putting $1 000 into a robo-advisor like Betterment

is definitely an option you should look into.

All right, so number five here,

another way to invest $1 000.

One of my favorites, once again,

is to fund a Roth IRA.

Now, most people have heard these terms before.

They've heard of a 401K or a Roth IRA

and a traditional IRA and their head is spinning,

they don't know what these things are.

But if I were to tell people that they had to understand

one thing about money,

other than compound interest,

it would be understanding the power of a Roth IRA

because for most people,

it is the most powerful wealth-building tool

that is available to you anywhere out there.

And unfortunately, not everybody is taking advantage of this

because it's something

you have to go out and do on your own.

Your employer may help set up

and facilitate a 401K plan for you,

but as far as the Roth IRA goes,

you're on your own as far as setting this up.

Now, it's not difficult at all,

it's actually a really simple process to open a Roth IRA

but it's a process, nonetheless,

and unfortunately, a lot of people

just skip over this entirely

or they are never made aware of this retirement account.

So, essentially, this comes down to this question here,

of you got this $1 000 to invest,

are you looking to invest this for the long haul?

For, you know, in your retirement?

Or are you just looking to invest this money

for a couple of years and then maybe, you know,

put it into a car or some other life purchase?

Well, if you're open to investing your money

for a much longer period of time,

the Roth IRA in most cases,

is the best tool out there for this.

So, basically, the way this works,

is you're taking that money,

putting it into a retirement account,

and then as long as you're not taking

the earnings out of that account

until you reach the retirement age,

you don't pay any taxes on it.

You're literally allowed to grow your money tax-free,

for decades in some cases,

depending on how old you are,

and not pay a penny in taxes,

as long as you don't touch the earnings.

If you pull out your contributions,

let's say you put $1 000 into your Roth IRA,

five years from now, you take that $1 000 out,

you're completely allowed to do that.

No penalties, no taxes

cause you've already paid taxes on that money.

Just so you guys know a little bit more

about the Roth IRA here, for 2019,

you're allowed to contribute up to $6 000 per year.

If you fall within the income limitations

which are quite high,

most people are within those limits.

If you're over those limits,

you just look at something called a backdoor Roth IRA.

Or a IRA conversion.

And if you're 50 or older,

you can fund it with $7 000 per year,

in a bit of a catch up period.

So, let's say, for example,

you went out there, you opened up a Roth IRA

and you took $1 000 and you put it into an S&P 500 ETF

exchange-traded fund.

So, essentially, what you've done

is you've take that $1 000

and bought a very small piece

of the 500 largest publicly-traded US companies,

a.k.a the S&P 500.

And if you look at investing advice

from some of the greatest investors out there,

that is essentially what Warren Buffett recommends,

is putting your money into a low-fee,

S&P 500 index fund and just letting it sit there

and build over time.

So the average return from the stock market

over the last 100 years or so, is around 10%.

And then we have inflation, which is around 2%,

giving us an anticipated or realistic return of 8%.

Now, you're not gonna earn that every single year,

but if you look over a long period of time,

that's the average return you could expect.

So, let's say for example,

you took that $1 000

and you put it into a Roth IRA S&P 500 ETF,

from age 20 to age 65.

You put $1 000 in there once and then you forgot about it,

never touched it and just let it grow.

Well, based on that 8% compounded return,

you would have a balance at age 65 of $31 920.45,

which is a heck of a return on just $1 000.

So if you were to do this in a taxable account,

you would have a tax bill, in most cases,

depending on your earnings,

of about 20% of the earnings from that money.

So you're looking at a tax bill here of around $6 000.

So, yeah you have $31 000 in your account here

after you've invested,

but now you're giving $6 000 back in taxes.

This is your taxable account

and this is your Roth IRA account.

If you put that money in a Roth IRA

and you were tax-sheltered,

your tax bill is $0.

So that is the power of the Roth IRA.

It's honestly one of the best wealth-building tools

out there available to people.

And again, even if you put that money in there,

your contributions can come out any time, penalty-free,

you just can't touch the earnings.

If you touch the earnings,

that's when you'd get a penalty and have to pay taxes.

So it's not like your money is untouchable,

you just don't wanna take out the earnings,

you would only take out the contributions.

So, if you guys do decide that you wanna open a Roth IRA,

in my opinion, the best option out there is M1 finance.

They offer literally 100% free Roth IRAs

and retirement accounts,

with a minimum balance of just $500.

And then you can literally go right in there

and, you know, invest your money into stocks,

into bonds, into ETFs, all kinds of different options.

So if you guys wanna check out this free Roth IRA,

that is going to be linked up down in the description below.

Okay, now, option number six for investing $1 000

is again, one that people are probably gonna say,

oh, this is not what I wanna hear

but it's something that you guys need to hear.

And in most cases,

one of the best investments that you can make with $1 000

is simply paying off some existing debt that you have.

And so, this kinda, again,

ties in with that whole emergency fund

we talked about early on.

Where you wanna take that money,

put it in emergency fund

to avoid the need for the use of credit cards

for short-term buyings or random, unexpected expenses.

But a lot of people out there have credit card debt.

We know the average credit card interest rate is 19,24%

and average returns from investments out there,

depending on what you're investing in,

range from eight to 12%.

So if you had $1 000 in credit card debt

and then you also had $1 000 invested,

odds are you're paying more in interest

than you're actually earning

as a return from that investment.

So, just to show you guys an example of this,

let's say you put $1 000 into the stock market

and earned that 10% return.

Well, you've now earned $100 on your $1 000 investment.

Now on the other hand,

let's say you also carry a $1 000 balance

on your credit card

at 19.24% interest.

Well, you also paid $192.40 of interest

throughout that one year.

So the net or the profitability of this

is actually a loss of 92.40.

So, despite the fact that you earned $100 return

from the stock market,

you paid $192.40 to the credit card company

and still had a loss of 92.40.

So if you're out there and you have, you know,

credit card debt, high-interest debt, unsecured debt,

typically it's anything with a interest rate of 10% or more,

paying that off is honestly one of the best options you have

when it comes to investing your $1 000.

I know it sounds kind of backwards

to take that money and put it into your debt,

but to be honest with you guys,

getting to that debt-free line

or a point where you don't have any high interest debt

is often times one of the best investments

that you can make.

And then number seven here, the last on my list.

Again, one of my favorites, is any kind of self-education.

Now this could be something like going online

and taking a course.

This could be taking somebody out for dinner,

this could be attending a seminar.

Whatever you guys wanna call it.

But this is simply taking that money

and investing it into your skills,

which should ultimately allow you to make more money.

And one of my favorite ways to demonstrate this

is let's say you're making a salary of $40 000 per year

at the job that you have now.

Well, let's say you're able

to invest that $1 000 in yourself.

Maybe you go online and you take some courses

on how to spruce up your resume

and then you get a slightly better job,

just for example's sake.

Let's say you're able to increase your earnings by just 1%,

which is not a lot of money at all.

Let's say you invest that $1 000 in yourself

and by investing in your skills,

you've basically increased your earning potential by 1%.

Which is just $400 per year.

If you were to calculate that 1% increase of just $400,

well, over 40 years, you know,

that is a return of $16 000 on a $1 000 investment,

which is a fantastic return.

And odds are, if you do invest in your skills

and you become more valuable to the market place,

well, then you're gonna get more than a 1% increase in pay.

And to be honest with you guys,

the number of opportunities now to learn skills online

through, you know sites like Udemy

or even just taking online courses and learning new skills,

you could easily do things

to increase your earnings potential by even 10% or 20%,

without very much effort,

other than just learning a new skill

that is more valuable to the market place.

And the other thing I would recommend too,

if you're looking to learn skills from people,

or just learn from people

who are doing something you're doing.

You know, literally, just go up to them,

say hey, let me buy you lunch, let me buy you dinner

or let me pay you for an hour of your time.

I wanted to become a real estate investor

in my local areas,

so that's basically what I did,

I went around and I'd met real estate investors

and I said, you know, let me buy you lunch,

let me pay you for an hour of your time.

And most of them, you know,

they just let me buy 'em a coffee

or buy 'em lunch and pick their brain.

And that's not gonna cost you $1 000

but the information I was able to gain from them,

I had such a greater return

than the cost of that lunch

or even if I were to give them

$250 for an hour of their time.

The ROI from that investment is going to be higher

than just about anything else out there.

But anyways guys, that's gonna wrap up this video.

These are my seven favorite ways to invest $1 000.

Let me know in the comments section down below,

how did you invest your first 1 000.

If you've already invested,

I would love to hear what you guys think

and where you began investing.

And like I said, if you are new to investing

and you wanna learn more about the basics,

check out that completely free investing course.

Top link in the description below

or it's freeinvestmentcourse.com.

If you guys are new to the channel,

don't forget to subscribe

and hit that bell for notifications.

And I hope to see you in the next video.

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