In fact, legendary investor Warren Buffett suggests that most investors would do best by buying and holding an S&P 500 fund and adding to the position regularly. At the top of the list is buying an index fund based on the Standard & Poor’s 500 index, a collection of around 500 of America’s most successful companies. The index has returned an average of about 10 percent over time, letting you double your money in just over seven years, on average. If you’re looking to build your fortune, investing can be one of the best places to do it.
The 401(k) Match
It’s important to note that while these strategies have historically shown potential for significant returns, all investments carry risk, and past performance doesn’t guarantee future results. NerdWallet, Inc. is an independent publisher and comparison service, not an investment advisor. Its articles, interactive tools and other content are provided to you for free, as self-help tools and for informational purposes only. NerdWallet does not and cannot guarantee the accuracy or applicability of any information in regard to your individual circumstances. Examples are hypothetical, and we encourage you to seek personalized advice from qualified professionals regarding specific investment issues. Our estimates are based on past market performance, and past performance is not a guarantee of future performance.
Invest In Dividend-Paying Stocks & ETFs
NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments. If you need access to your money in less than a few years, then you don’t want to tie it up in a major investment like a stock, which could be down a lot just when you need the money. Instead, go with a super-safe option such as a high-yield savings account. These accounts are offering some of the highest returns in years, and it’s easy to may mining cryptocurrency damage my gpu find the country’s top yields. To use this strategy, you don’t simply put money into an account as you would with other strategies here. As an added bonus, however, you can also take advantage of the Saver’s Credit here.
All investments involve some risk, but money market accounts, CDs, and Treasury securities are fairly safe. But these investments offer lower returns than mutual funds or ETFs. This is the biggest disadvantage of buying stocks—the market can be volatile and there’s always the potential to lose money. But stocks have the potential for high returns, especially if you adopt a buy-and-hold strategy and only purchase stocks you plan to keep for a long time. CDs are relatively safe and you’ll earn a guaranteed return on your investment. They’re a great option if you’re trying to reach a savings goal, like saving up for a down payment on a house.
You won’t even have to worry about having enough money to buy full shares of each stock if you opt for one of the best brokers for fractional shares. And you should check out the best brokerage bonuses for new money, because you may be able to get a little extra something. There are so many ways to invest 1,000 dollars and double it, triple it, or 10X it! Hopefully this post gave you some new ideas to try you hadn’t thought of before. If you aren’t taking advantage of your employer 401(k) match, chances are you aren’t optimizing your portfolio for retirement either. If that’s the case, I highly recommend getting a free 401(k) analysis with Blooom.
So it’s possible, depending on your income, to generate a 100 percent return with no risk at all. If you’re wondering how to invest $1,000, putting your money in a retirement account offers one of the highest potential returns. You can opt for a workplace retirement account or open an IRA on your own with an online broker.
Start a Savings Account for a Rainy Day
Zero-coupon bonds may sound complicated for the uninitiated, but they’re simple to understand. You buy a bond at a discount off its eventual value at maturity instead of a bond that rewards you with a regular interest payment. Even the least adventurous investor knows that there comes a time when you must buy, not because everyone is getting in on a good thing, but because everyone is getting out. Our writers and editors used an in-house natural language generation platform to assist with portions of this article, allowing them to focus on adding information that is uniquely helpful.
Robo-advisors are robot-powered — or, less fun and sci-fi-sounding but more accurate, computer-powered — investment managers. ETFs trade on an exchange like stocks, which means the minimum investment is a share price. Beyond the fact that it’s a minimum you can meet, the benefit is that with $1,000, you can put together many ETFs to build a diversified portfolio. The best robo-advisors also provide calculators and other tools to help you understand how fast your money can grow, and they offer solid cash management accounts with a ton of features. Most accounts let you get started with no money, and it takes just a few minutes to open one. If you earn above these levels you may still qualify for credits of 10 or 20 percent, depending on your income.
An investment that can double your money in a year or two is undoubtedly more exciting than one that may do so in 20 years. The issue is that an exciting, high-growth investment will almost certainly be far more volatile than a staid and traditionally stable financial product. This increased volatility or risk is the price an investor pays for the allure of higher returns.
- That statement isn’t too far from the truth, but it’s the kernel of the most traditional way of doubling your money.
- This means your returns are likely to be much more lumpy each year than the averages.
- Business wins that would be footnotes for giant companies can power explosive stock gains for smaller players.
- After all, a single $1,000 investment that doubled every year would be worth over $1 trillion dollars after just 30 years.
Banking
Hence, a classic 60/40 portfolio (60% equities, 40% bonds) would have returned about 8.6% annually. A 60/40 portfolio should double in roughly nine years and quadruple in approximately 18 based on the Rule of 72 (which is covered in greater detail below). Start by researching different index funds and considering the company size, market capitalization, and sector you want to focus on.
Presently, she is the senior investing editor at Bankrate, leading the team’s coverage of all things investments and retirement. Prior to this, Mercedes served as a senior editor at NextAdvisor. If you’re thinking about buying your first rental property, check out Roofstock. They are the only platform I know of that focuses exclusively on providing cash flowing rental properties to investors. You may not think you can get started investing in real estate with only $1,000. And while you probably won’t be able to buy a house with that amount of money, there are a lot of ways to make money in real estate without a huge upfront investment.
Over the long run, the stock market has provided annualized average returns somewhere in the neighborhood of 9% to 10%. This is a key reason such a large part of investing success comes from starting early. It’s a great pick for new investors because it offers immediate diversification — meaning reduced risk — and you’ll own some of the world’s best companies.
This is also very straightforward; there are plenty of companies and ETFs that pay quarterly or annual dividends, so you have plenty of choice. And, chances are you can start trading for free through your bank or through a commission-free online broker like M1. Of course, you have to figure out what to manufacture and sell, and it can take time to find your first buyers as you grow your brand. But the income potential is immense while start-up costs are low. For example, companies like Arrived let you invest in individual income-generating rental properties starting with only $100.
Then you can stick around and use the plan’s tax benefits to grow your retirement savings. Even with interest rates higher than past years, it’s hard to use a bank account to make a significant amount of money. In order for investors to double, or even triple their money, they’ll often have to take on some risk for that potential reward.
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