The BEST ways to invest your first $1000

What's up you guys? It's Graham here. So this has got to be one of my most requested videos, especially for people that are just starting out or don't have a lot of money saved up. That is how to invest your first $1,000.

This amount, when you're just starting off, should be able to give you a great head start and build a great foundation for you to start making a lot more money. So here's my take on it, and here's what I would do with your first thousand dollars.

Let me first preface it by saying it really depends on what you want to do and what your situation is. If you're the type of person who really wants to start a business, my advice for you is gonna be a little bit different than someone who just wants to invest passively and then forget about it like they never even had it. So I'm gonna try to cover as many of those situations in this video as I can.

Even though I'm gonna give you my recommendations of what I would do, honestly, it comes down to personal preference and you need to do whatever you feel comfortable with. So my first and biggest piece of advice for everybody watching is to invest that first thousand dollars in yourself. I think that's gonna give you the highest ROI compared to anything else you can do.

Investing in you, and guys, I get it. I know everybody says that, but that's the truth. You're gonna get a much higher ROI spending that thousand dollars learning something, improving your skills, getting a new credential, than investing in almost anywhere else besides like speculating on like cryptocurrency or something like that. So personally, I would use this thousand dollars and spend it on learning something you really want to do.

Now, I'm not talking about buying a $997 course that's expiring in five minutes; you better click the link below and sign up before it's gone forever. I'm not talking about that at all! I'm talking about investing in maybe some books, talking about investing it in maybe a seminar, maybe some courses, maybe an extra step you can take, maybe learn how to code. Whatever it is that you do, it should be something that is gonna directly impact your career long-term.

Use this thousand dollars to expand your knowledge on whatever industry you want to see yourself in. Investing in yourself is a good idea no matter how much money you make. Even if you have a hundred thousand to invest, you should still always and continually invest in yourself, and I do the same thing myself.

By the way, it doesn't need to be something really expensive. It could be a $20 book; it could be a $20 class. Shooting could be watching videos online. There's so much information out there for completely free that I don't recommend spending a ton of money if you don't have to, especially if you have an internet connection. Pretty much everything is online already, so just take advantage of it.

You can also become a real estate agent for much less than a thousand dollars if that's something you can see yourself doing, or there are plenty of other classes and courses you can take to get licensed in different industries.

My second piece of advice is for anybody that wants to start a business. I would use that thousand dollars towards starting the business that you want to do. If that means buying a new laptop, buy the new laptop. If that means getting coding classes, get coding classes. If you want to make a website, make the website. If you want to wholesale real estate, use that thousand dollars towards advertising. Do you want to start an app? Use that thousand dollars to begin building that app.

So first, figure out what you want to do and what business you want to be in, and then figure out how to stretch that thousand dollars as far as you can to make that business a reality. Even if you fail miserably and your business goes up in flames and you lose the thousand dollars in a few weeks, I promise you, losing that thousand dollars will be the best experience money could ever buy.

That loss right there is going to be worth way more than any college class or any life experience you can ever get. That thousand dollars you lose starting a business is gonna save you a lot of money in the future because it guarantees you're never gonna make those same mistakes ever again.

My third piece of advice is for someone who wants something extremely passive, who basically just wants to invest the money, forget like it was ever even there, and then move on. If this is the case, I would highly recommend a low-fee index fund—often what Vanguard has. They have quite a few funds with $4,000 minimums that should give you a good foundation for investing long-term.

Now, while this isn't gonna make you like millions of dollars by investing a thousand dollars, historically they’ve returned between 7 and 9 percent per year. So you can expect on a thousand dollars, historically speaking, you're gonna make between 70 dollars and 90 dollars per year after inflation for pretty much doing absolutely nothing.

For a lot of these index funds, it's basically just buying it, forgetting about it, and moving on to do something else, and then thinking about it again. Also, with these funds, you can get a lot of diversification by owning a very small amount of a much bigger picture. So I highly recommend these.

By doing this, you’re gonna learn a lot about index fund investing, passive income, learning the economy, and just the markets in general. So I highly recommend this.

My fourth piece of advice is for someone who wants to learn the stock market and doesn't mind making riskier investments. With this thousand dollars, you can start trading individual stocks, and I promise you, you are gonna learn so much by trading individual stocks with a thousand dollars. I guarantee it.

This is actually what I started doing at like 15 years old. I had saved up two thousand dollars from working part-time over summers and different days after school, and I had my dad set up an account for me on Scottrade. That was probably one of the most eye-opening experiences for me because you learn how to read like candlestick charts, learn swing trading, learn different chart techniques, learn about the company in general, read up on the price-to-earnings ratio, read up on everything to deal with a company and their stock and their price.

I mean, it’s pretty involved, and when you're in it firsthand, you actually have money in it—it becomes so much more real. The thing is, yes, you can pay per trade, but when you actually get emotional about a stock—and when you're actually invested in it firsthand—you deal with yourself getting in your mind, thinking a stock is gonna go up when it’s going down. You learn how to sell, learn how to cut your losses, learn how to stop your profits, and maybe don’t get too greedy.

There's so much that goes into buying and selling stocks, and it's a great learning experience. Chances are, you're probably gonna lose that money, but I think the experience you gain from that is definitely gonna be worth it. Now, the downside here—the big downside here—is that commissions will eat you alive when you're only investing a thousand dollars.

Even if you invest the full thousand dollars and you make ten percent, which means you made a hundred dollars on that trade, usually your commissions are gonna be maybe five dollars for the buy and five dollars for the sell. Like seven dollars to buy, seven dollars to sell—so that's like ten to fourteen percent of your money gone just by trading fees. Even if you lose money, you're still gonna have to pay the trading fees.

So keep in mind that every time you buy and sell, your commissions on those trades are gonna be much more significant than if you're trading like $10,000 or $100,000. But like I said, all of this is really just a good learning experience and will serve as a solid foundation for you to make bigger, larger trades in the future.

You can also do the same thing with cryptocurrencies, and you know I have no idea how that market is. I don't trade cryptocurrencies, but I can't deny the fact that I see a lot of people trading it and making some money. If that's something you want to look into, even though it might be a little more risky—that's something you want to do, look into it.

I guarantee my trading cryptocurrencies, whatever you're doing with this, it's just a good learning experience. You shouldn't expect to make millions off your first thousand dollars. You should expect that with this thousand dollars you just get the best learning experience possible.

Like I said, the whole purpose of this first thousand dollars is really to jumpstart your experience and your knowledge and a foundation for you to build from. Because let's be real, a thousand dollars is not a lot of money in the bigger picture. Instead, it should be used to jumpstart you to learn how to make ten thousand dollars, which will teach you how to make a hundred thousand dollars, which is gonna teach you how to make a million dollars.

This is really just the foundation to build on—your knowledge and your experience to make even more money. It’s really not about maximizing your returns and how to make the most amount of your money from a thousand dollars; it's not about that at all. It’s about creating a learning experience.

Where losing 10% on a thousand dollars is only losing a hundred dollars—learning from that experience—so when you go and invest a hundred thousand dollars, you don't lose that 10%, which is gonna be ten thousand dollars. You're making small losses up front that really aren't gonna make a big difference in the long run, but you're learning these experiences that are gonna save you a ton of money in the future when you're playing with a lot more money.

Think about it—all the mistakes you're making on this thousand dollar level are not going to be the same mistakes that you're gonna make on your hundred thousand dollar level and on your million dollar level. You're getting a lot of these experiences out of the way right now to avoid them when you're dealing with more money.

So anyway, those are my recommendations. The first is to invest in yourself. The second is to invest in whatever business you want to start. The third is to invest passively where you forget the money was over there, and you move on. The fourth is to invest in stocks and get to learn the economy and the stock market.

I think between those, it should provide you with a pretty well-rounded knowledge and experience to begin moving on and making even more money. So anyway, you guys, I really hope this was helpful. I really hope you enjoyed this. If you haven't already, make sure to click subscribe, and also make sure to smash that notification bell so you know when I upload videos; you don’t miss out on that.

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