How To Invest $1,000 Easily

With the world of investing, the more money you have, the more opportunities are available to you. These days, those who are trying to start their own investments can begin investing without having to worry about fees or minimum entries. However, those methods of investing are fairly limited.

When you have a larger sum, like $1,000, you have a lot more opportunities that can help you make your money grow faster. People who have that extra cash would be wise to invest it. Where, though, you should invest that cash?

Those who are not sure which investment route they should get might want to learn how to invest $1,000 in a variety of different ways. Check out these different investment options you can do with $1,000 right now.

Here's how to invest $1,000 the old-fashioned way: put your money into the stock market. On average, stocks appreciate in value by a rate of 7 percent per year. This means that you could easily see an extra $144 after two years of this initial investment—and that's not a bad return.

Admittedly, figuring out which stocks to buy isn't always easy, but actually putting the money down to get some stocks is. If you have a stock you've been wanting to buy, all you really need to do is download a stock trading app on your phone and make the transaction happen.

Rather than choose individual stocks, diversify your portfolio with ETFs.

If you want to know how to invest $1,000 in over 10,000 shares, you need to learn about ETFs. Exchange Trade Funds, or ETFs, allow buyers to diversify their portfolios with a number of shares from several different companies in a single publicly traded fund.

ETFs work by having investors buy slices of shares, all tied together in a single unit. This gives you a safer, more diverse portfolio—even if you're only investing in one ETF.

Put it into a high-yield savings account.

Stocks and other similar business-related investments can give some people a little anxiety. If you can't figure out how to invest $1,000 in stocks without feeling really uneasy, you might want to consider keeping it in a savings account.

High-yield savings accounts are specialized bank accounts that give unusually high interest rates. Some will have interest rates as high as 2 percent. These accounts offer guaranteed returns in the form of interest, and are super safe ways to get a little bit more return on your money.

That being said, this isn't one of the best investing strategies out there, if you're looking for good returns. However, it's a good choice if you are really hesitant about stocks or similar options.

Pay down high-interest debt.

Believe it or not, sometimes the best way to figure out how to invest $1,000 is to figure out whether you should invest or pay down debt. Surprisingly, paying down debt can actually be a more worthwhile investment than a stock.

The best example of how this can be true can be seen with credit card debt. A lot of credit cards will have as much as 29 percent interest compounded to your total annually. For people who are making minimum payments or have to pay down debt fast, that's bad news.

The thing about this investment is that the return you get comes in the form of savings. If you end up paying off $1,000 of debt that's being held at a 20 percent annual interest rate, that can potentially save you as much as $1,500 in a five-year span. Saving that much money will have virtually the same effect on your finances as getting an extra $1,500 during that time.

A $1,500 return on an investment of $1,000 is huge. And, as such, you might be wise to invest in your debt reduction.

Most people, when investing, don't really think about retirement. After all, we typically want our money to be available to us fairly soon—and retirement accounts really don't do that.

However, if you want to learn how to invest $1,000 that can later turn into a year's income by the time you retire, consider getting a Roth IRA. This is a specialty retirement vehicle that allows your money to grow in a way that reduces taxes and maximizes the money usability.

Everyone, realistically, should have a Roth IRA. Getting a good app that makes opening a Roth IRA easy, like Finhabits, can be an easy way to go about this.

Invest in your own business.

If you're the type of person to have an entrepreneurial streak, then maybe you shouldn't be learning how to invest $1,000 in stocks. If you've been feeling like it's time to start your own company, you might be better off investing in your own business—or just investing in equipment that could help you get your freelancing life off the ground.

Even if it's something as simple as a business license or getting a new computer for graphic design, choosing to invest in your own business can be one of the best things you can do for yourself. In many cases, that $1,000 can turn into $10,000 worth of business. You simply can't get those returns anywhere else.

One of the hardest aspects about investing is trying to come up with an investment strategy for you. That's why people hire investment advisors, and now, that's a role that has been automated.

Robo-advisors are apps that help you manage your investments, automate them, and even do the strategizing part for you. Apps like Betterment figure out how to invest $1,000 for you—and lets you rest at ease.

Typical robo-advisors show you what you should expect from your investments, can help you save on taxes, and even gives you access to tools to help you better plan out your personal finances. This cuts down on the time you need to do due diligence and will help you maximize your returns.

Consider putting in a bond.

Bonds are government or company-backed investment vehicles that add value as they mature. These bonds are considered to be fixed-income, primarily because the terms of the bond have already been promise to you.

With bonds, you get a lot more reliability, but returns tend to be lower than stocks. That being said, they can be a great way to make sure you have a little more money at the end of the day.

P2P lending, also known as peer-to-peer lending, lets you be the bank. Using a crowdfunding platform like Prosper or LendingClub, P2P lenders give their money to borrowers who are looking for a loan. The borrowers then pay you back for the loan, with interest.

P2P lenders get agreed-upon interest rates as their return on investment. This means that you can typically figure out how much you can expect to receive. These platforms also allow you to spread out $1,000 among a wide range of different loans.

Overall, most people who do P2P lending will see anywhere from 6 to 9 percent ROI per year.

Put it into an index fund.

Index funds are a favorite method of investment among finance experts who regularly tell millionaires how to invest $1,000 dollars or more. Index funds are mutual funds or ETFs that have the majority of their stock selections based on certain stock indexes—such as the S&P 500 or NASDAQ.

This investment route tends to match the market very closely because they have to include the stocks that the indexes are composed of. However, a lot of the best S&P 500 index funds have returns as high as 12 percent a year. So, this might be a good route to beat the market.

Donate it to a 503(c) organization.

What if you don't necessarily want to invest your money in you, but would rather be interested in learning how to invest $1,000 in your community? Believe it or not, you can still get a huge personal finance payoff if you choose this investment route too.

If you choose to donate your funds to a charity that has been vetted and accredited as a 503(c) charity by the IRS, you can write it off as a tax contribution.