7 Ways to Invest $1000
One of the biggest myths in finance is that you need large sums of capital wealth to begin investing. It’s a myth that almost every financial advisor finds themselves constantly debunking.
Whether it is you, a child or even grandchild who may be receiving a little bit of extra kitty cash this holiday season, making the right decision on what to do with it can make a big difference further down the road.
When analysing an individual’s finances, on many occasions people have a little bit of extra cash lying around somewhere – whether it is stashed under the bed, or sitting in a low-interest bearing savings account. Whilst we always recommend having a sum of savings for contingency and any unexpected expenses that life may throw at you, we have also come up with six ways you can invest your next $1,000. To see which strategy is best suited for you, and how to implement it, contact an MWL Financial Planner today.
- Pay Down Your Debt
Benefit: Save on interest
On the surface of things, this may sound contrary to investing your $1,000. But the economic advantages gained by paying off debts earlier – such as negating further interest rates or account keeping fees, could prove to be a strategic investment choice.
- Invest in Shares
Benefit: Tax effectiveness
Whilst all investments bear the risk, they do not necessarily have to be risky as our blog on the [risk/return] tradeoff discusses. Investing in stocks is a great way to grow your wealth over time, with companies listed on the ASX for all types of investors.
- Superannuation Contribution
Benefit: Government co-contribution (contact an MWL Financial Planner for more information)
Not only can voluntary superannuation contributions generate tax benefits, but it also means that you are actively investing in your future retirement fund. If you are a low or middle-income earner and make personal (after-tax) contributions to your Super Fund, the Government will also make contributions up to a maximum amount of $500.
Benefit: Tax deduction
Investing in yourself, as discussed on our blog on [good and bad debts], is always an intelligent idea. Investing in self-education may increase your employability and develop your knowledge in a current or new sphere, leading to increased earning potential. As the old saying goes, an investment in knowledge pays the best dividends.
- Term Deposit
Benefit: Financial security
Whilst a term deposit will never offer high returns, often they can provide an interest rate above what your money is receiving by sitting in a savings account. Investment in a term deposit can be a good way of investing your money, whilst you take the time to make a larger investment decision – without sacrificing a (small) economic gain in the process.
- Invest in Managed Funds
Benefit: Lower Risk and Diversification
Entering the investment game can be daunting for some. Investing in a managed or index fund, whereby a professional makes the investment decisions on your behalf, can be a good way for many to leverage the knowledge of professionals yet still reap the economic benefits. Decreased risk and a good diversified start if there are only a small amount of funds.
- Invest in Financial Advice
Benefit: Knowledge and direction
This is arguably the most important one – investing in financial advice and your financial literacy. Fundamentally, without the skills, knowledge or relevant advice, you will not be in the optimal position to make smart financial decisions. Invest in this first, and see the rewards later. Contact MWL Financial Group today.