So you don’t have a million dollars, that is okay, not many of us do. All you need is a little bit of savings and a desire to make more. $1000 invested properly can add up to a significant amount over time if you maximize the tools available. Going through a credit union, instead of blindly looking for the big payoff, using your savings to incrementally make more, without losing much, will help you get to your financial goals. If you are looking for the best place to put your $1000 in 2016, try one of these suggestions.
Put it into a Savings Account
A savings account may seem passe due to the low-interest rates offered over the past decade or so. One of the best reasons to keep it as a viable choice is because it is the lowest risk investment you can make. You won’t ever have to worry about losing a dime, and it will continue to accrue money as long as you don’t touch it. In addition, with all the talk of interest rate hikes, you may be getting in on something good.
Not only getting the benefit from making incremental profits over time, if the interest rates raise, the stock market may just be headed for a downturn. That avoids the prospects that you are going to lose your money in risky trades, and that you get in while the getting is good. A slow and steady earner, you can’t go wrong. You will always walk away with the original investment plus whatever else you can earn over time.
Often we lose the forest for the trees. If you are thinking about investing your money, first consider how much you owe. The best investment you can get into, that isn’t going to hold huge risk of loss, is never going to earn you more than 10%. Chances are good that any of the debt you hold is costing you well over that amount. Before you worry about saving for a rainy day, it may be prudent to pay off what you owe so that your rainy day may not be as rainy. Putting away dollars to save pennies just doesn’t make good cents, literally.
Save it for Catastrophe
Again, before you consider putting money into an investment, you may want to put a little cushion into your monthly budget. There is nothing that can blow money more than being in the red monthly. Even if it is just a little, that overflow is going to end up on your credit cards and debit amounts. Put the $1000 aside so that you have it in case you need it. That means not tying it up in an investment that could potentially have penalties for early withdrawal, or can take time for you to cash in. It is always good to have cash on hand.
Buy a CD
The rates for a CD are nowhere near record amount. The biggest advantage that you are going to find to investing in a long-term CD is that you aren’t going to lose any for sure, and it is going to be tied up and not available for withdrawal. If you are already at a point where you know you are going to need any cash, then making it inaccessible is a good idea to holding onto it. Locking up your money is an excellent way to grow it over time and not to be tempted to spend it in the wrong place on an impulse buy.
Invest in Penny Stocks
You really can’t buy much with $1000 when trading on the stock market and it can be gone in one bad trade. That is what makes penny stocks so awesome. You probably are never going to be a millionaire investing with pennies, but slow and steady wins the race. If you want to get in on the game, but not bust out while playing it, penny stocks may just the perfect compromise of risk for your level.
Put Money into an Established Stock
If you are ready to play with the big guys, you can invest in the stock market. All you have to do is look for stocks that under $10 and well established. It may not be the big payday, but you can make some money while not putting out too much risk.
You don’t have to have a million to make a million. If you take it slow and incrementally, accumulating wealth without spending more than you make, you can find yourself in the 1% before you know it.