Do you want to know how to invest 1000 dollars? but you do not know which financial investment is the most interesting for you? Should you instead turn to life insurance or stock market investing, for example? In this article, find out which are the best investments to grow your savings with 1000 dollars.
The booklet A and the sustainable development and solidarity booklet (LDDS)
Let’s start with the basics: if you do not yet have precautionary savings, building one up should be your number one priority. This is an envelope, placed on a booklet without risk of loss, which you will use. in case of a hard blow. It is recommended that its amount be equivalent to at least 3 months of your salary.
Be careful, however, not to invest all of your savings in a medium of this type. Indeed, the livret A and the LDDS are very poorly remunerative: they currently only bring in 0.75% per year, which is not enough to offset inflation. Their real return is therefore negative.
The only advantage of these two booklets is therefore to allow you to secure a certain amount of savings while enjoying great flexibility: you can withdraw your funds at any time if necessary. These strengths in particular explain they’re a great success. Indeed, 82% of French people have an A booklet.
Invest in life insurance
Now let’s move on to the other financial investment which is life insurance. In 2018, 1,700+ billion dollars were invested in life insurance contracts in the USA, UK, and french.
This success is explained in particular by the tax advantages that life insurance allows to obtain as well as by its attractive returns. It is also interesting for preparing your succession, with devices that simplify this process.
With 1000 dollars, not all contracts will necessarily be offered to you, but you will already have access to a wide choice of investments. Interesting to get started, then.
If you choose to invest in shares in your bank, you become the owner of a small portion of a local bank credit union. This investment is not listed on the stock exchange, which limits its fluctuations. The only real risk you face is the bankruptcy of the local bank or credit union. But, in reality, this is not a very big risk if you choose to invest in reputable banks, especially since local branches are often less affected in the event of a financial crisis. On the other hand, liquidity is not a great strong point of this investment: it varies a lot between different institutions.
Each year, you thus receive a remuneration which is voted in general assembly, according to the results of the banking establishment. This annual gain is legally capped, which prevents this investment from being very profitable.
To invest, you need to check with your bank.
Invest in real estate crowdfunding
To invest 1000 dollars or euros, turning to real estate crowdfunding is a very good option. You invest in real estate development or property dealer projects, in exchange for interest. Yields are high, often around 10%. This, therefore, makes it an attractive investment to grow your savings.
This investment involves risks: if the company goes bankrupt, you lose your investment. But this does not prevent real estate crowdfunding from experiencing a real boom, with the amounts collected growing sharply in recent years.
Crowdfunding in renewable energies
Another aspect of crowdfunding: renewable energies. You can invest part of your savings in projects developing this type of energy in France. For example, you can participate in the construction of solar power plants, with yields of around 5%, depending on the operations.
As real estate crowdfunding, this investment presents risks, but this does not prevent it from being very attractive in the eyes of the USA, UK French, or any other country. The amount collected is growing strongly, driven by various platforms, such as Lend polis.
Invest in SCPI
When you invest in an SCPI, you become the owner of the shares of a company that holds real estate. You then receive a share of the rents, proportional to your investment in the SCPI.
It is an interesting financial investment, offering good returns, which can reach 6% per year. However, only choose this option if you want to invest for the long term. Indeed, the subscription fees are high and the resale is not always interesting.
The ETFs are securities that replicate the course of a market index . This is a fairly easy to use tool if you want to invest in the stock market. For example, the Lyxor ETF CAC 40 tracker reproduces the price of the CAC 40. If you wanted to do the same thing without going through trackers, you would need to buy shares of each of the companies that make up the index, which requires a certain budget and a lot of organization.
On the stock market, invest in dated funds
Investing in the stock market can be complex with 1000 dollars. Indeed, if you invest directly, you may not have the means to diversify your portfolio sufficiently to protect yourself against risk. So, investing in dated funds can be a good option.
The Funds dated are SICAV, vtwnx investing in bonds, with the goal of achieving an annualized return on a given date. This performance is often of the order of 4%. The investment horizon revolves around 5 years, depending on the manager you choose.
This investment is therefore interesting, with good returns and little risk, but be careful about the issuer of the security. It is the quality of the manager that will allow you to obtain the promised performance.
If you have a company savings plan and you want to invest 1000$, it is worth taking advantage of this device to grow your savings. This is also an investment that appeals to the French. In fact, they have on average $ 12,000 in employee savings.
But unfortunately, these savings schemes are not accessible to everyone. All companies combined, only 10 million employees benefit from an employee savings plan.