If You Have $1000, Here Are Your Top 3 Options!
Put it into an IRA and watch your money multiply!
This one’s my favorite option because it’s, by far, the easiest no-hassle option, with a very respectable return.
Just throw all of it into an IRA and watch it grow!
Let’s say you’re 15 years old.
And the $1,000 is money that you saved from working part time on Saturdays.
If you put that $1,000 into an IRA that tracks the total stock market (returning ~10% per year), that one-time investment will be worth a little more than $100,000 by the time you retire at age 64.
I know that’s a long ways away. But I don’t think you’d disagree that that’s a whole lot of bang for your buck for just a one-time investment of $1,000. Plus, the beauty is that you can set it and forget it. No need to hassle with managing this investment because it’s a passive investment into a vanilla fund tracking the total stock market index. Just let compounding do the work for you.
If you don’t know how to invest in an IRA, click on the link below (Investing 101).
Related: Investing 101
Pay down your credit card!
This one might be a better option if you have credit card debt.
You know how I mentioned above how compounding can take your $1,000 and potentially make it into $100,000 over a long period of time? Well, the same can happen to you in reverse, if you have credit card debt. But the interest on credit card debt is astronomically higher than the return you get in the market.
In other words, keeping a balance on your credit card is you basically harnessing the power of compound interest to work against you.
And rather than making yourself wealthy, you’re making your bank wealthy.
Now, why would you do that!?!
Start a side business and generate additional income!
I’ve mentioned this in past posts, but it’s so critical that it’s worth repeating:
You can increase what you save by improving your bottom line (decrease expenditure), but often times people tend to forget that it actually might be a lot easier to increase your savings by growing your top-line (increasing income).
Stop thinking strictly save save save, because there’s a limit to how much you can save. There’s a literal limit. If you make $30,000 a year, there is absolutely no way you can save more than $30,000 a year. There’s a cap. And I don’t know many people who can save 100% of their income anyways.
And let’s say you save a respectable 10% of your $30,000 income, that’s $3,000 per year that you’re saving. But if you grow your top-line (income), all you’ll need to do is make roughly an additional $8 a day, and that’ll translate to the same $3,000 additional savings per year. What’s easier? Or better yet, why not do both so you can super-charge your savings and investments?
In today’s day, it doesn’t take a whole lot to make an additional $8 per day, $10 per day, or even an extra $20 per day. You can easily start an internet-based business out of your home, for far less than $1,000. That’s how easy it is to start a business in today’s digital internet age.
Related: Side Hustle Your Way to Freedom
Are you doing any of these currently? Which one’s your favorite and why? Share in the comments below!