So you want to invest your first 1000 dollars, CONGRATULATIONS!

If you are ready to invest your first 1000 dollars you are already ahead of the game. A lot of folks out there just don’t have that kind of capital ready to invest. If that applies to you don’t worry you aren’t alone. I frequently ask my friends, family, and co-workers if they invest any money and if they say no I will ask why not? I usually get the answer “well I don’t have enough money set aside”. Today I’m going to tell you how I would invest my first 1000 dollars knowing what I know today and how to pull together the money to invest if you haven’t already.

The first thing to know about investing is that it is not always easy and the risk of losing money is very real. Before investing make sure you have a basic understanding of what you are getting into. Check out my post 6 Mistakes Beginners Make Investing for a few tips before you start.

Where Do I Invest?

It is easier than ever today to get invested through online brokerage accounts. Basically, an online brokerage account gives you, the investor, the ability to deposit funds within that firm so that they can purchase and hold different equities on your behalf. Personally, I recommend using TDAmeritrade as a beginner because they have an abundance of research tools and educational content along with average commission fees and a great platform to trade on via mobile devices and computers. Click the TDAmeritrade hyperlink to get set up with a brokerage account when you are done reading!

Take Small Steps At The Beginning

There are tons of different investing strategies and what you invest in ultimately will come down to your investment goals. Whether you are seeking aggressive growth from your investments or you want to focus on protecting your capital I recommend being conservative with your investments when first starting out for two reasons,

I want you to have an awesome experience investing in the stock market. Unfortunately, some people jump into the market too aggressively without fully understanding what they are doing, take a big loss early on, then abandon all hope of investing because it left a bad taste in their mouth.

You have a lot to learn about the stock market. Getting your feet a little wet is better than diving head first into the market so you don’t make a poor decision without even knowing it.

Making Your First Purchase

Start by finding a blue-chip stock that you are familiar with or a company you really understand. Blue-chip stocks are well-established companies that have been operating for several years, names you might recognize would be stocks like Amazon, Apple, IBM, Nike, etc. Do your research on some of these blue chip stocks so you know what they are all about and then pick one you want to invest in. Once you have found the stock you would like to invest in purchase roughly 500 dollars of that stock. It doesn’t matter if you buy 50 shares of a $10 stock or 5 shares of a $100 dollar stock the end result is the same. Once you have made that investment observes what happens to it on a daily basis. Track the price, read the news and financial reports, and without a doubt, you will begin learning a lot of new things. The other half of your initial 1000 dollars should stay put during this time.

After watching your first investment for a little while and as you learn the ropes, you will undoubtedly come across a second investment you like even more than your first one. This is what you saved the other half of your initial 1000 dollars for. Now you have two options,

If you still think your first investment was a good one hold onto it and place your remaining 500 dollars into that second investment you found.

As your knowledge about the market expands and you find that you don’t really like your first investment that much, you can sell it and add to that second investment or continue to do your research and discover other great buys.

Keep on, Keepin’ on

As you continue to track your new investments be sure to set up some sort of auto deposit into your brokerage account every month. Even if you don’t have a lot of additional money at the end of every month you can always find a little bit here and there. Just invest what you can afford whether its 50 dollars a month or 1000 dollars a month. As your cash balance builds up inside your account continue assessing your current investments and selecting new ones as you see fit. That statement may seem a little ambiguous but I promise you as time goes on you will learn an incredible amount through your own research and analysis and everything will start to make sense.

What if I have nothing to invest right now?

Remember the auto depositing we just talked about? That can be a great way to save some income to invest. Set up an auto-deposit into your brokerage account of whatever you can afford each month and pay it at the beginning of the month so you always commit to it. Pay into it each month and after a little while viola! You will have the capital you needed to start investing. For some people the thought of adding another monthly “bill” can be a hard pill to swallow, it was for me when I first started as well but ultimately it comes down to one thing. What are your priorities? If you can go out to lunch and dinner 3 times a week or buy a 5 dollar coffee every morning then you should have room in your budget to invest in your future.

Making your first investment is an exciting experience and the perfect time to start investing will always be right now! Let me know what you think by leaving a comment below or click on the “contact” tab at the top of the page to email me any questions and as always thanks for reading and have a great day!