How Should I Invest $1000

sandman87 on 07/12/2017 - 10:55

Over the past few years I've been thinking about how I can invest my money more effectively. My wife and I don't have large amounts of money to invest as we're paying our mortgage and about to send our kid to daycare. I've searched around the forums and found most people have sought advice on how to invest $10k or more. Most managed funds want a minimum of 5k to start, and bank interest rates are terrible.

What are some options for investing a relatively small ($1000) amount of money ? I'm willing to top up my initial investment down the track but am not sure where to begin. Any advice would be appreciated!

Financial

Comments

  • dcep on 07/12/2017 - 11:02
    +5

    are you ready to lose the 1000 ?

    if you're after something that returns higher than your mortgage interest rates, it'll have to be something riskier.

    • ESEMCE on 07/12/2017 - 12:41

      The only thing that might nett you better returns is Super if you qualify for the Co-Contribution.

  • Baysew on 07/12/2017 - 11:07
    +1

    Does your loan have a mortgage offset?

  • k-rokfm on 07/12/2017 - 11:12
    +10

    Bitcoin. Its only going up

    • Wystri Warrick on 07/12/2017 - 12:06
      +2

      *BUY BUY BUY!

      • Oz8argain on 07/12/2017 - 12:37
        +2

        jumped up by 3k today so far, i registered around 15K.. now its 22K and I'm still waiting for money to be transfered to btcmarkets….

        • Wystri Warrick on 07/12/2017 - 13:37

          I bought MIOTA in early July for about $0.31 it's now about $6.55 21x increase =)

        • Oz8argain on 07/12/2017 - 15:02

          @Wystri Warrick: where did you buy that

        • Wystri Warrick on 07/12/2017 - 15:17

          @Oz8argain: coinspot, thought I've been needing to move to btcmarkets for better rates as coinspot's buy and sell fee is 3%.

        • hoochiscrazy on 07/12/2017 - 16:47

          @Wystri Warrick:

          Do you think itll keep increasing? What exchange do you recommend using?

        • Wystri Warrick on 07/12/2017 - 17:56

          @hoochiscrazy: right now it's taking a huge plummet and I "expect" it to stabilise at under or around $1, thought I "expect" in a few - several months it'll be at least $10, thought looking long term I don't believe this is going to be a survivor/competitor to bitcoin.

          I haven't done much research on this coin, so always do your own research and never gamble more than your willing to lose.

          Edit: btcmarkets as it has the lowest fees.

        • PlasticSpaceman on 08/12/2017 - 07:52

          I bought about $200 worth of bitcoin on 3/12, and today - five days later - if I sold it now I'd get over $300 even after allowing for transfer fees etc. Insane. FWIW I did my sums and found that although coinbase had the highest fees, because they have a larger market the price of bitcoin was cheaper so the end result was I got more bitcoin per buck. YMMV.

  • Ryanek on 07/12/2017 - 11:14
    +9

    Invest in The Ryanek School for Kids Who Can't Read Good and Want To Do Other Stuff Good Too.

    • rompastompa on 07/12/2017 - 11:17
      +6

      Your school needs to be at least three times bigger before I consider investing.

  • rompastompa on 07/12/2017 - 11:16
    +12

    Invest $1000 in happiness.

    Take a weekend away or buy some small luxury item that you've wanted but couldn't justify spending $1k on it.

    Put it this way.. How much return are you expecting? 5%? That's $50. All comes down to risk vs reward.

    Over the past few years I've been thinking about how I can invest my money more effectively.

    I'd think more of how you can save money more effectively. That would pay off far better and much less risk.

    • Wystri Warrick on 07/12/2017 - 12:04

      I'd think more of how you can save money more effectively.

      Op is going too have to leave us, turn in his Ozbargain badge :(

      • Kangal on 07/12/2017 - 12:14
        +2

        Hookers and blow

    • HighAndDry on 07/12/2017 - 13:00
      +7

      You know what is the greatest contribution to stress? Financial insecurity.

      OP should save the money - he'll have it and be happier.

      • zonra on 07/12/2017 - 13:37
        +4

        This.
        1k for the peace of mind (essentially your emergency fund) is well worth it, especially when you don't have a lot of cash lying around.
        And OP, you don't even lose that 1k, it's still yours to spend when you need it most.

      • The tiger on 08/12/2017 - 09:08

        Hi Ob. But if OP is a non risky saver, it would bring more stress to him if he sees his savings are on ups and downs e.g. on share market.Investing in term deposit with banks gots pea nut return. I would suggest OP leaves his savings with the bank till he achieves something like $5k.

    • ESEMCE on 08/12/2017 - 09:00
      +1

      Love that definition of taking a holiday!
      Never thought of it that way before, you should sell it to an advertising agency!

  • barbarella on 07/12/2017 - 11:25
    +1

    Do you have a credit card? Do you pay the entire balance every month?

  • HighAndDry on 07/12/2017 - 11:40
    +13

    If you only have $1,000.00 in savings, that should be your emergency fund, so I'd only "invest" it in something that I can withdraw from at a moment's notice - like a savings account.

    If you have a mortgage - if there's an offset facility, the obvious destination for the money is there: You immediately "earn" the interest rate of your mortgage on that money, and you'd be hard pressed to find better returns anywhere else that's even half-way safe.

    Of course, if you have an emergency fund (generally between 6 months of outgoings and 6 months of after-tax income), you don't have an offset facility or it's already filled, then and only then consider more risky investments like bitcoin. Otherwise I wouldn't bother.

  • dasher86 on 07/12/2017 - 11:56
    +4

    Black

    • [Deactivated] on 07/12/2017 - 14:17

      0

  • pformag on 07/12/2017 - 12:11

    Investment Bonds. For long-term 10+ years

  • TheBilly on 07/12/2017 - 13:25
    +1

    Invest that $1,000 on something that will allow you to increase your disposable income and thus savings so you then have more money to invest. For example, if you are currently under employed or a single income earner, invest that $1,000 into a secondary income stream. You won't get much benefit from the $1,000 that will net a double or triple return. If that were the case you would have just as much chance at losing it. Some ideas below are:

    1. Learn photography and do events on the weekends - buy a camera.
    2. Buy lawn mowing equipment and do lawns on the weekend.
    3. Portable car wash and detailing.
    4. Weekend portable coffee station.
    • [Deactivated] on 08/12/2017 - 08:39

      Good advice , you can wait at the lights in the city and when they go red wash their windscreen ,make up a med latte exta foam and walk their dog ,
      give it a wash too, and it should be dry by the time they get back ,
      Cut his missus's grass and take some glamour shots in the meantime
      Easy money

      • Euphemistic on 08/12/2017 - 13:46

        actually you can't go and wash windscreens at red lights any more. Road Rule 236 Clause 4e.

        • [Deactivated] on 08/12/2017 - 16:03

          Well there goes that get rich quick scheme .
          Put all your busking money into Bitcoin then

  • STRAPIFY Watch Strap on 07/12/2017 - 13:44
    +2

    If you have an offset account in your mortgage, the interest you get will be circa 4.5% tax-free interest.

    Assuming a tax rate of 32.5%, in 'real' terms, this works out to be a 6.67% return. Whatever investment you make, make sure you're getting something better than a risk-free 6.67% p.a.

  • Peck on 07/12/2017 - 20:45
    +4

    Seeking Investment advice on OZB and not having knowledge of investing should make mortgage offset the ONLY choice!

  • Some Human on 08/12/2017 - 00:35
    +1

    $1000?

    Lego.

  • Empharand on 08/12/2017 - 00:38
    +2

    In my bank account.. I'll keep it safe for you, you have nothing to worry about ;)

    BSB 06 2692
    Account: 1407 5827

  • flavable on 08/12/2017 - 07:52
    +1

    To start off with 1k, just find a high interest savings account that's convenient for you and leave it there for the long term for your kid when they grow up. And top up whenever you get paid, with a manageable amount. It may not be a huge return straight away, but it builds the habit and in the meantime while money is tight you can keep on reading and building your investment knowledge :)

  • PlasticSpaceman on 08/12/2017 - 08:14

    If you have minimal spare cash, and with a young kid & mortgage I suspect that's the case, then as others have said I'd look towards putting any spare cash into the mortgage. Even if you don't have an offset account, most will allow you to access those extra payments if you need it and in the meantime it's giving a decent return when you take into account tax etc. The next option to look at is extra payments into super, but it's a lot harder (if not totally impossible) to access those extra payments if you need them (and, with three kids myself, I know that unplanned for expenses are common). Next would be shares - you can buy a few shares and slowly add to your portfolio over time. When starting with that, I'd suggest going the major businesses - banks, etc. The one after that is maybe, if you have enough equity in your house, considering using that to get an investment property - would recommend going to a financial advisor if thinking about that just to make sure it makes financial sense taking in tax impact etc. There is a risk of having a vacant rental property and having to basically pay two mortgages though.

    If you have a small amount (think coffee fund, cash put towards tatts, etc) then I'd think about getting some crypto currency. There is a good chance it will all fall in a heap and any money put towards it will disappear, but on the other hand it could do well. Save that in a tin or something and, once you hit (say) $100 use that to buy some coins. I'd suggest a 50/50 split between bitcoin and ethereum ie first purchase get $100 worth of bitcoin, then second purchase get $100 worth of etherium, etc. Do not, however, put any money towards this if you can't afford to lose it.

  • Euphemistic on 08/12/2017 - 08:14

    True, it's not a lot for 'investing'. But there is nothing wrong with just saving it. Your best bet is probably an offset account for your mortgage and keep it in ready access for when your fridge dies or something else expensive and unexpected.

    If it is all you've managed to save, then good on you and keep it up.

    Don't 'invest' in anything beyond a high interest bank account unless you'd be happy to kiss it goodbye.

  • [Deactivated] on 08/12/2017 - 08:45
    +1

    +1 for Bitcoin
    And hurry up ,
    you're losing money as you wait

  • Goldcoasterlinda on 08/12/2017 - 09:02

    I suggest you look at ACORN, designed for investing small amounts, even an offshoot for kids has recently started up. It's been recommended by some reputable Australian financial advisors. Also check out Vanguard, not sure of their min $ but i'm fairly sure its only $1-2K to start off. You can add to both as you go. Best of luck, everyone has to start somewhere. "FROM LITTLE THINGS, BIG THINGS GROW"

  • HighRiseGoat on 08/12/2017 - 09:06

    I'd go for Bitcoin. There may be a correction coming up with futures launching, would be a good time to buy in if it happens.

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