What to Do With $1,000 Dollars (What Can and Should You Do?)

Do you have...

• Student loan debt?

• A personal loan?

• Credit card debt?

• A car loan?

• Medical debt?

....Then you shouldn't do anything with your $1,000. You should keep that money as a mini-emergency fund. For most, a mini-emergency fund should cover their expenses for approximately 2-3 weeks. If you think you need more, save up more.

Instead of putting your $1,000 into savings or spending it on something fun, you're thinking about investing. You're wondering, "How can I turn my money into more money?"

My advice on how to make money with money:

1. Stay in your lane. Stick with what you know.

2. Plan to grow your money slowly and learn along the way.

I'll use myself as an example here. Back in the day, I was a financial analyst by day, and a personal finance blogger by night. I'm a dad with two kiddos and am a husband to a one-of-a-kind beautiful wife. When I have time for fun, I go golfing. That's me in a nutshell.

Let's say someone comes up to my door, and they have a rare ruby. It's worth $5,000, but they are hard up for money and need to sell it immediately. They'll sell it to me for $1,000. Should I buy it?

Tell me this. Is it in my lane? Absolutely not.

I don't know anything about rubies! Even if I took it to the jeweller and they said it was legit, I probably still shouldn't buy it because I wouldn't know what to do with it once I had it!

What to do with an extra $1000 dollars - An example of me staying in my lane

Instead of a ruby, let's say someone wanted to sell me their personal finance blog for $1,000. It doesn't earn any money, but it has some history and a great domain name. Plus it has 10,000 visitors a month through SEO traffic.

Should I do the deal?

Absolutely!

I know all about growing a fan-base and monetizing a personal finance blog! Plus, in my day-job I evaluate business ideas all the time. I could map this up and estimate the payback time-frame quite quickly!

This $1,000 deal could easily turn into $10,000 in just one year's time. Then, I could continue to grow this income source if I wanted to, or put it on auto-pilot and just watch the earnings roll in.

What's in your lane? How can you turn money into more money?

What is it that you do? What do you know? And then what makes sense for you to invest in? Find your answers to these questions, and you could quickly start earning some serious money with your $1,000 dollars!

If you're looking to make some money with your money just for a short period of time (because you're going to use these dollars for something else in a year or two...like for a down payment on a house or something), then you'll want to invest this $1,000 in a safe place.

If you're looking to invest $1,000 for the short term, I'd recommend you put it in one of two areas:

• Checking account

• High yield savings

A checking account at a credit union can yield up to 3% interest! It's a great place to park 1000 dollars for the short term to earn an extra $300 a year for basically doing nothing.

If you don't want to go through the hassle of moving your checking account, but you still want a super safe investment, then you're really just left with various types of savings accounts or money market accounts. Their best yield right now is 0.5%. Definitely not great...but I guess it's better than 0%!

I get the question quite often, "What can you do with 1000 dollars in the stock market? What stocks would you buy if you had $1,000 dollars?"

As you probably gathered earlier in this article, I'm an index fund guy. I rarely play the individual stock picking game. It's just too difficult to pick the next winner. And, if you have just $1,000, you really don't have enough money to properly diversify your investments either.

So what stocks would I buy with 1000 dollars?

I'd put my money into VTSAX - the Vanguard Total Stock Market Index Fund. But again, I'm no investment professional. I'm just a guy that has done a fair amount of research on the topic, and this is where I landed.

If you invest $1,000 and earn 10% a year, will it really make you much money? How long does it take to make money from stocks?

At first, it's going to seem incredibly slow. But if you're into investing for the long haul (like, decades), then it's certainly worth it! Let's carry on with the question I posed a few sentences ago.

What if you invested a grand and earned 10% each year on your investment? What does that turn into over time?

• After 1 year: $1,100

• 2 years: $1,210

• 3 years: $1,331

Doesn't seem like much yet, right? But now watch it pick up steam here.

• 5 years: $1,610

• 10 years: $2,593

• 20 years: $6,727

• 30 years: $17,449

• 40 years: $45,259

• 50 years: $117,391

Did you ever think $1,000 could turn into $117,000? It can!

Sure, it takes quite a lot of time, but if you're young, that just shows you the power of investing early!

If you like real estate, but only have a thousand bucks, you don't necessarily have to wait. You can invest in REITs! But wait...what are REITs? And are REITs a good investment?

REITS are Real Estate Investment Trusts. Put simply, a REIT is a company that owns, operates, or finances income-generating real estate.

By investing in a REIT, you're investing in the company that is trying to make money in the real estate world. If you invest in a particular REIT, it can be fairly risky. It's a lot like owning a single stock. The value could wildly fluctuate up or down depending on how that single company is performing.

What I like better than one individual REIT is a REIT Index Fund. This is simply many REITs in one single investment. So, you can still get the benefit of the returns in Real Estate, but you're reducing the risk.

So...what can you do with 1000 dollars? You can invest in real estate! And, you don't have any of the tenant hassle either!

Interested in real estate investments? Check out CrowdStreet. It's an app that lets you become a partner in real estate deals. It's a solid way to invest if you're interested in picking out certain properties to invest in.

What if you like physical real estate? You want to touch and feel your investment, but you only have one thousand dollars to invest?

I would never recommend that someone try to buy a house on their own with basically no down-payment. But if you're wondering what to do with 1000 dollars and you have a love for real estate deals, then you might want to become a real estate deal maker.

What exactly is a real estate deal maker?

If you're a real estate deal maker...

• you find the deal,

• negotiate the buy price,

• write up the terms of the investment,

• and then you start to find investors in your deal.

Here's an example of a real estate deal you may put together

You're looking for what to do with your 1k, then you stumble upon it.

You find a 10-unit apartment building that's run-down, but in a great area. The asking price is $800,000. It's already a steal, but you're able to negotiate the price down to $700,000.

You figure you can get the building fixed up for $100,000 and then sell it for $1,300,000. That would be a 62% profit!

Then what do you do?

You write up the deal.

• You need 8 investors for $100,000 each (to cover the $700,000 purchase price plus the $100,000 repairs)

• Then, you write in that you'll pony up $1,000 of your own money for good faith.

• At the sale of the property, each investor will earn a share of 80% of the profits. You keep 20%.

Let's say everything goes according to plan. You sell the property for $1.3M, which means there are $500,000 in profits.

• Each investor gets $50,000 (a VERY solid return on a $100,000 investment)

• And you...you earn 20% of the profits, which means $100,000!

Hmmm, turning $1,000 into $100,000? That's a pretty good deal! Of course, not all projects work out this well, but it absolutelycanhappen!

Wondering what to do with 1000 dollars? Or how to invest $1,000 dollars in real estate? If you love doing real estate deals, then this might be a great avenue for you to explore!

There are actually quite a few ways to do this, believe it or not.

All the different methods pretty much boil down into two camps:

• Starting your own business

• And flipping stuff

Invest $1,000 dollars and double it by starting your own business

Wondering what to do with 1000 dollars if you really want to work it and make that money grow quickly?

I'd recommend starting a simple business.

• Buy a lawn mower and mow as many lawns as possible.

• Purchase a bunch of cleaning supplies and start your own house cleaning business.

• Buy some kennels and dog leashes and start a dog sitting/walking business.

• Buy car wash supplies and spread the word that you can detail cars like no other.

• Purchase a decent camera and book 5+ photography gigs.

You could start these businesses with just a couple hundred dollars and earn a thousand bucks in less than a month. BOOM! That's a quick way to earn a thousand bucks with your thousand. If you want to invest $1,000 dollars and double it, invest in your own business.

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• Take some cash to your local garage sales and retail centers. Find stuff for cheap and sell it online for 2-3 times more.

• Good with cars? Find some great deals, clean them up, and sell them for a grand more than you bought them for.

• Know about websites? Buy them, add content and attract some visitors, then sell them for an extra thousand bucks!

It's honestly not that hard to double a $1,000 investment. You just need to invest in what you know, and then work it!

Want to earn a hefty sum with your thousand bucks? How can you turn $1,000 into $5,000 in a month? Just do what I've already taught you, but ramp it up a little.

If you can flip one car in a month and earn $1,000, I bet you can flip two and earn $2,000.

Then what? You've still got another $2,000 to earn.

You could work your own business (mowing lawns, cleaning houses, writing articles, design websites, etc.) and earn another $2,000 easily. Heck, if you're good at writing, you could earn $400 or more per article!

For each of these business ideas, all it takes is some know-how with marketing yourself and your skills.

So as a recap, you just have to hustle. Use that $1,000 to buy whatever you need to earn another thousand. Then, simply do that four times in a month to turn that $1,000 dollars into $5,000 dollars.

So this is me pretending that the reader is pointing the question my way... "What would you do with 1000 dollars?" Well, for my wife and I...we've been saving for years now and we have been tremendously blessed.

So much so that a thousand bucks wouldn't really change our lives.

For us, we might do one of the bullet points below if we had an extra 1000 dollars:

• Give the money away to someone that's truly in need

• Put it in our kids' college fund

• Put it towards our new master suite that we're putting over the garage (maybe we'll get fancier sink faucets...Lol!)

• Take an extra vacation with the kiddos (before they find out we're not cool to hang out with)

• Or, we might be super lame and just put it in our savings account and forget about it (this is probably the most likely scenario, ;))

What about you? What would you do with 1000 dollars? Probably something way cooler than we would?