If you have a small amount of money and don’t know where to spend it, the best solution is to invest
. If you approach the issue correctly, you can acquire a good additional source of income. There are several options for investing capital, and the choice depends on the amount of investment.
No one will tell you the truth about where it is better to invest a thousand, three or five thousand dollars.
This is such a funny moment. Are you thinking about where to invest your $1000?
, you ask, and they tell you dozens of options from your head, but there are practically no real stories.
Yes, this is true, if someone knows where they can invest a small amount of money, such a person will not tell everyone about it. Firstly, it must be a financial secret
, and secondly, there is always a risk and if a loss occurs, it will not be pleasant when everyone knows about your failures.
Plan investments to reduce risk
Careful planning and detailed calculations will help reduce the risks present in any type of investment. First, decide on the following points:
- Do you have special knowledge and skills that allow you to manage investment instruments yourself;
- Are you ready to devote time to working with investments? Perhaps passive investing will be a priority;
- what kind of income do you want to receive by investing money, are you willing to take risks to increase profits;
- in what period of time you want to cash out dividends.
Remember, any investment involves risks, and the higher they are, the greater the likely return. Further plans should be built on this pattern, taking into account your own knowledge in this area.
If you are new to investing, it is better to provide funds for trust management to specialists. You will make a profit without taking an active part in the distribution of assets or conclusion of transactions. The main thing is to choose a reliable management organization that has been operating on the market for a long time, is characterized by high solvency, and has positive feedback from investors. Help in making a decision:
- ratings of companies working in the direction you are interested in. They are compiled by qualified specialists, taking into account many important aspects, so the rating tables turn out to be quite informative;
- history of the organization's activities. If a company hides this information, you should not trust it;
- accurate information. Companies that operate honestly and are focused on long-term activities will not hide the amount of income from investors and the volume of payments made. Of course, this information may be false, so you should not be guided only by this point;
- guarantees. If the company operates autonomously, the risk will be quite high. It is an order of magnitude lower for companies controlled by the state or cooperating with independent organizations.
These points should always be taken into account, even if you are wondering where to invest $100 . The amount is quite small, but in any case you don’t want to lose it.
Let's look at the main investment options to choose the best one.
Eurobonds
Purchase of Eurobonds of Russian companies denominated in dollars.
The yield is about 4-6% per annum. Payments occur 2 times a year. This money can be immediately used at your discretion: spent or reinvested.
You can buy Eurobonds on the stock exchange. Through an intermediary - a broker. To do this, you will need to open a brokerage account. Deposit money and... actually buy Eurobonds.
What will we get by buying bonds?
Fixed yield for the entire period of circulation of the bond. That is, if you buy Gazprom Eurobonds with a maturity date in 10 years, you will receive coupon income for a decade.
A distinctive feature of Eurobonds (like all bonds) from deposits is the preservation of accrued (but not paid) interest upon early sale of securities.
We can invest in Eurobonds for literally a week. And you are guaranteed to receive your percentage of profit in the form of accumulated coupon income (ACI), in proportion to the annual yield.
I recommend: How Eurobonds work - in simple words
For example, we bought Sberbank Eurobonds with an annual yield of 6%. If you held it for 1 month and sold it, you will receive 0.5% on top of the cost. In a month +1% and so on.
Yes, even in one day some imperceptible (but it is there) share in the price of the bond will drop. In our case, 6% / 365 days or 0.016%.
And now the disadvantages and pitfalls.
The cost of Eurobonds starts from 1 thousand dollars (but there are few of them). There are papers worth 10 thousand dollars. But most go for $100-200 thousand.
The price of a bond is not a fixed value. Although Eurobonds resemble bank deposits (open a deposit, a year later you take all the money in full + interest), there is a significant difference.
This is the market price of the bond.
It can change over time: increase or decrease. You will receive coupon income consistently. But if at one point you want to sell Eurobonds, you may be surprised to find that the paper you bought a year ago no longer costs 1 thousand dollars, but $950 (although it may be the other way around, it will rise in price to $1050).
Why is this happening?
A bond has 2 prices - nominal and real.
Let's say a company has released 15-year securities on the market with a yield of 10% per annum. The face value of the bond is 1 thousand dollars.
If you buy them, you will receive 10% per year or 100 bucks for fifteen years. And after 15 years, you will get back the original thousand invested.
Now imagine after 2 years, another person, let’s call him Vasya, also wanted to buy such bonds. Vasya turns to you with a request to sell them to him.
You think: why should I sell them? They bring me 10% profit per year. Despite the fact that banks only give 2%.
Then Vasya offers you not 1 thousand, but one hundred thousand for them. Then one thousand two hundred. In the end, you negotiated for $1,300. This will be the market price of the bond.
Over two years you received 200 bucks in coupon money. Plus immediately + $300 on top. In total, for the thousand dollars invested, we earned 50% profit in 2 years. Not bad.
Why does Vasya need this? Even taking into account the higher price of the bond, its annual yield will be about 8%. Which is also very good. And the annual income will remain unchanged. Still the same 100 dollars a year.
The only negative is that at the end of the 15-year circulation period of the paper, Vasya will receive only 1 thousand rubles (instead of the 1,300 given to you). Over the period of ownership (13 years) he will receive $1,300 in interest. And the net result will be $1,000 or 78% profit.
Only in the market the price changes constantly. Various “Vasyas” always appear, selling and buying securities.
Another existing problem with buying individual securities is the risks. The risk that the issuer (the company that issued the bond) may not pay its debts.
You can partially reduce possible negative consequences by choosing the most reliable securities. Plus, if possible, diversify your portfolio by purchasing Eurobonds from different companies. But in this case, the amount of investment (taking into account the high cost of bonds) increases multiple times.
We invest in PAMM accounts
Choose a PAMM account carefully
Investments in PAMM accounts have become a very popular tool today for those who have free capital and want to make money. They have several significant advantages:
- passive income. The investor does not have to independently manage assets to make a profit;
- quick payback - such investments are classified as short-term and medium-term, depending on the conditions of a particular transaction;
- high profitability. The level of income is an order of magnitude higher than in other investment methods;
- the ability to diversify risks by distributing capital between several accounts.
Now let's look at the topic in more detail. PAMM accounts are opened by traders working in the Forex market in order to attract additional assets to be able to conclude larger transactions. To do this, they use third-party specialized platforms, for example, Alpari. Private investors choose suitable PAMM accounts and invest their own money. The profit received from Forex trading, minus the manager's commission, is divided among all investors in proportion to the size of their investments.
The risks in this case depend more on the trader’s policy and the transactions concluded. Otherwise, investors receive the following guarantees:
- When opening a PAMM account, each trader initially deposits a certain amount of funds. This ensures that he manages his assets responsibly;
- Due to the fact that a PAMM account is opened on a third-party platform, the manager cannot cash out the incoming money and will use it exclusively for trading on the Forex market.
Almost anyone can invest in this direction. The amount of income is directly related to the volume of assets provided for management. Therefore, this option is relevant for investors wondering where to invest $1000, and for owners of smaller amounts.
Cryptocurrency
Bitcoins have revolutionized the digital currency market. The lucky ones who bought them for pennies at one time can now relax and enjoy life without working.
You can invest 10,000 rubles in the purchase of part of Bitcoin or altcoins today. Selling them at the very start - 2-3 months after acquisition - is unprofitable. Digital currency market experts recommend that buyers wait 3-4 years for the rate to rise and provide profit to holders of electronic coins.
There are other investment options: buying groups on social networks, Telegram channels, creating and promoting your own brand. Most of them require the constant presence and control of the owner, which also needs to be taken into account. If you let a startup take its course, there is a chance of ruining it.
We invest money in mutual funds
The return on investment is comparable to the amount of investment.
Mutual funds are an excellent solution for those who want to make short-term or medium-term investments and are not prepared for significant risks. The activities of such organizations are controlled by state authorized bodies. This gives investors security guarantees.
The work of mutual funds is also based on the trust management of funds, which investors provide to qualified specialists for concluding profitable transactions. The total income after deducting the manager's commission is distributed among investors in proportion to their contributions, determined by the number of special registered securities - shares.
The profitability of mutual funds directly depends on their specialization and priority investment instruments. For example, companies that invest money in bonds, precious metals or land cannot boast of high profitability of transactions; instead, the risks here are lower than when collaborating with mutual funds investing in stocks, Forex and other unstable sectors, which, if successful, bring significant income.
Important! Depending on the choice of organization, you can receive 100% or more per annum. These are excellent profitability indicators, indicating good prospects.
When planning an investment, it should be noted that investors do not need to have any special knowledge, therefore such investments are available to absolutely everyone.
The threshold for entering mutual investment funds is 1000 rubles, so this option is also suitable for those who are thinking about where to invest $100 . The only thing that will differ is the amount of income, which is defined as a percentage of the invested amount.
Where to invest 10,000 rubles to earn money - bookmakers and sports
If a novice investor understands any sport, has an “extra” 10,000 rubles and does not know where to invest it, then he can make a profitable bet. But you don’t need to be seduced by a high coefficient, since it is set mainly for obviously losing teams or players.
Some tips for those who want to invest money by taking it to a bookmaker:
- If betting on sports for an investor is not a temporary hobby, but a serious occupation, then several hours a day must be devoted to training. It is necessary to regularly review the line, analyze matches, analyze victories and defeats. It is also recommended to read relevant literature and borrow experience from successful investors.
- Control over emotions . It has long been known that a person is capable of many rash actions when driven by emotions. You should be equally calm about both victories and defeats. After all, losses are an integral part of any investment program.
- The right bookmaker . Experienced players recommend having accounts in several online bookmakers at once. You should first read reviews and talk to clients of a particular organization.
- Determining the size of the bank . For example, in the first month it is expected to invest from 10,000 on bets. In a few months, this amount may increase tenfold, or it may “burn out.” You should never invest your last money, even if it is an easy investment that you don’t really mind losing.
- Gradual increase in bank . You should not act impulsively and increase your bet several times at lightning speed after the first victory. The bank should increase first once a month, then once every three months, and so on.
Every experienced investor in this area has his own strategy of action, which allows him to invest wisely and win substantial sums from time to time.
Unallocated metal accounts and other ways to invest in precious metals
Types of metal accounts
Despite the fact that you can invest in several types of precious metals: gold, silver, platinum, many choose the first option. It is characterized by accessibility to a wide range of investors, predictability and stability. Gold prices continue to rise, which cannot be said about silver; not everyone can afford to invest in platinum due to the high cost of the metal.
The best way to invest in gold is to open an impersonal metal account. It has several characteristic features that you should be aware of:
- By opening OMS, you do not receive the purchased bullion in your hands. Their characteristics are specified in the contract. This makes it possible to exclude the inclusion of the cost of manufacturing the ingot in its price, which would otherwise lead to a decrease in the profitability of the investment;
- the agreement is drawn up quite quickly, the investor is required to have a minimum package of documents: passport and tax identification number;
- the income received as a result is not subject to personal income tax;
- Finding a good deal on this service is easy.
We see that opening a compulsory insurance policy is more justified than purchasing a gold bar and then storing it in a rented safe deposit box. Also, when receiving funds, there are no third-party commissions that reduce the profitability of investing.
Another way to invest in gold is to buy bullion coins. They need to be stored until the price of the precious metal noticeably rises in order to be sold on favorable terms. Investments in collectible coins are considered more justified. They also have artistic value, which allows them to earn more.
Bank deposits
Deposits are the first thing that comes to mind for most potential investors. To open them and invest free funds, you don’t even need to visit a bank branch - mobile banking is expanding and improving every month.
In the future, the depositor will be able to remotely monitor deposit accruals and withdraw interest on a credit card. Income is proportional to the amount of the deposit and the duration of the contract. On average, banks offer from 5 to 12% per annum.
Risks exist and they are well known. This is economic instability, which entails the bankruptcy of financial institutions, and inflation, which depreciates the national currency.
Binary options
This tool will be interesting for those who are thinking about where to invest $100 or a larger amount. We are talking about transactions that involve the need to predict the price movement of a certain asset, for example, a currency. If a trader makes a correct forecast, he receives a profit, the value of which reaches 85%. If the forecast is incorrect, a person loses the money for which he bought a specific contract.
Working with binary options yourself is risky if you do not have special knowledge and experience. It is better to entrust your own assets to a professional trader by concluding a partnership agreement with him. The size of the manager’s remuneration, the amount and procedure for paying dividends to the investor must be specified here.
The main thing in this case is to correctly identify a reliable and promising trader. To make the right decision, you need to carefully study the features of the manager’s strategy, the history of his activities in this area, and the percentage of profitable and failed transactions.
Stock
In our case, shares of American companies denominated in dollars.
Where can I buy?
Or through Russian brokers providing access to US stock markets. Or directly through American brokers.
In the second case, the minimum entry amount will be 10 thousand dollars or more.
Purchases are available through domestic brokers, but you will have to take into account very high commissions (literally multiples of the usual level of expenses for transactions with Russian securities).
Expected potential return……unknown. You can get several tens of percent profit per year. And vice versa. Lose the Nth amount as a result of a decrease in quotes.
The main problem is the correct choice of papers. And for this you need to have at least basic knowledge in fundamental analysis. So that it does not happen that after purchasing a stock that has been growing for several years, its value begins to decline.
But even knowledge and careful selection of papers do not guarantee a positive result.
The problem can be partially solved by diversification, that is, the simultaneous purchase of several shares of different companies. The loss from the fall of one or two securities will be compensated by the growth of others.
The minimum investment period should be 5-8 years. This, of course, does not mean that if you buy shares for 2-3 years, you will not earn anything. But it is important to understand that in such short periods, due to high volatility, there is a high risk of prices falling.
In the longer term, you can count on 8-10% annual returns.
Summarize
When deciding where to invest $1,000 , you'll have a fairly large number of options to choose from. We examined the most justified ideas for this situation. Choose an investment method that suits you in terms of income and risk. You have a considerable sum at your disposal, and if you invest it well, you can earn good money.
Important! All investment methods discussed involve risk. To reduce it, work with several tools. For example, capital can be divided into 4 parts and invested in a mutual fund, 2 PAMM accounts and one binary options trader.
Useful tips for a new investor
- Carefully study a specific investment proposal. Try not to fall under pressure from third parties who force you to act right now and right here, otherwise it will be too late. This may be exactly the case from the fairy tale about Pinocchio, and you will probably lose your, albeit not a lot, money.
- Don't give away the last one . You shouldn’t take your last 10,000 to the bank or somewhere else and be left without a livelihood. You should always have a stash.
- Don't take out loans to invest . This is a completely short-sighted policy. Of course, if we are not talking about business loans, where the probability of “winning” is high. But in this case, we are considering small investment amounts starting from 10,000 rubles. If “the business doesn’t work out,” then you will still owe this money, and even with interest.
- Look for different options that allow you to invest amounts of money of any size, and develop your own strategy
Do not hesitate to ask about everything that interests you in a particular investment project, because you are investing your money and want to know that it will end up “in good hands.” If you decide to start your investment journey with small steps, then an investment of 10 thousand rubles is the optimal start. If you are successful, you will increase your capital, and if you fail, you will not grieve for long and gain valuable life experience.
