How To Invest £1000 – 11 Ideas To Make Your Money Work For You
This post contains affiliate links; please read our Disclosure for more information.I remember when I had £1,000 to invest, it felt like a huge milestone.
So I understand the feeling of accomplishment when you’re in this position.
Congrats to you for having this much available to invest.
Today we’ll look at 11 great ways to invest £1,000 and make your money work for you.
Table of Contents
Why Invest Your Money?
In short, investing is putting your money into something that makes you more money.
The trouble is, many people lack patience.
This is how many fall into get-rich-quick schemes.
My thoughts: get rich quick, get broke just as quick.
Investing in anything requires time and patience to see genuine returns.
The best way to avoid this is to answer this: why are you investing?
Knowing this means you’ll pick the option that fits your purpose.
For instance, if you want more income you’d start a side hustle or advance your career.
However, if you’re aiming to build long term wealth you’d invest in the stock market or property.
How To Invest £1,000 – 11 Ideas To Make Your Money Work For You
I’ve split these 11 ways to invest £1,000 in two buckets.
These buckets are based on Return On Investment (ROI).
The first bucket has areas you can invest in for future ROI.
The second bucket has areas you can invest in for immediate ROI.
This way you can look into the right areas based on what your goals are.
I’m going to assume that you have some form of emergency fund in place.
I’ll also assume that you can afford to invest this £1,000 without affecting your living expenses.
How To Invest £1000 For Future Returns
The first 6 ways to invest £1000 are suitable for the long term horizon.
Your ROI will take a bit more time to materialise and could be years later.
I’m starting with the long term investments because that’s what most people should do.
Invest for your long term future.
Plus, all of these options are largely about financial gains.
Let’s be honest, that’s one of the main reasons to invest your money.
1. Invest In The Stock Market
If you’re investing to build wealth in the long term, the stock market is a great option.
The ROI is two-fold.
The company may pay you a portion of their profits since you own a “share” of the company.
And the value of your shares may increase as the company grows.
There are various strategies to invest in the stock market but I’ll talk about two.
You can invest in individual shares from specific companies.
I’d personally spread my £1000 with a handful of companies instead of one.
This method requires knowledge to know how to pick shares.
Hence my preference for the second strategy: index funds and ETF’s.
A fund is a collection of shares that you put money into.
Meaning you don’t need to know how to pick individual shares.
Hence many consider this strategy as passive investing.
Under normal circ*mstances, the ROI of stock market investing will take years to materialise.
We invest through Trading212 and Vanguard using stocks and shares ISAs.
2. Invest In Property (Sort of)
Admittedly you can’t invest in a rental property with £1000.
However, you can invest in Real Estate Investment Trusts (REITs).
REITs are property investment companies that own real estates such as apartments, hotels and warehouses.
You can invest in these companies through REITs and indirectly invest in property.
One advantage is REITs must pay 90% of their income to their investors.
On the flip side, you don’t own the physical asset but that may be appealing to you.
As with the stock market, ROI on REITs can take time to materialise.
You can also use a Stocks & Shares ISA for these too.
3. Invest In A Start-Up (Crowdfunding)
These days there are so many private companies looking for investors.
Instead of going to Dragons Den, they’re looking to the public.
This entails investing in companies you think have the potential to grow.
The main risk with these early-stage companies is they may simply fail or not grow much.
But the potential is that it could succeed and be lucrative for you.
Again, I’d personally spread my £1000 in various pots rather than one.
It could take years to generate returns hence the need for a long term view.
The popular crowdfunding platforms are Seedrs, CrowdCube and Crowdfunder.
4. Invest In Peer To Peer Lending
Peer-to-peer lending (P2P) companies allow people with money to lend to borrowers.
You effectively become the lender through this platform, cutting banks out of the equation.
Therefore, the loan rates charged to the borrower come to your pocket.
The P2P companies do credit checks, repayment chasing and handle the admin of it all.
To clarify, this is not like a savings account.
You are lending money so there’s a chance the borrower could default but the P2P companies aim to reduce this risk.
Your ROI will be realised once the full amount you lend is repaid with interest, which could take years.
The longest-standing P2P platform is Zopa which offers ~5% return.
5. Invest Towards Debt Freedom
If you’re still on the borrower side of the debt equation, pursue debt freedom.
Paying off your debts is a form of investing although it may not feel like it.
Remember, we invest for financial gain.
Debt takes away money from your pocket, especially consumer debt.
Paying off debts puts more money in your pocket in the long run.
This may even include making overpayments to your loans and mortgages.
The ROI on debt freedom is more money in your budget.
But more importantly, peace of mind.
6. Invest In Your Retirement Through Pensions
Not many are aware that their pensions are investments.
With most pensions, a portion of your pay plus your employer’s contribution gets paid into it monthly.
You can also invest in a personal pension using a Self-Invested Pension Plan (SIPP).
This money is usually invested in a diversified fund.
You can hold index funds, REITS plus more in your pension.
The difference is, there are specific benefits to pensions as opposed to general investing.
However, this money is untouchable until you’re 55 as it is meant for retirement.
The ROI will be appreciated when you’re not reliant on the government pension – should it still exist.
You can also open a SIPP with most investment platforms such as Vanguard, Fidelity and FreeTrade.
How To Invest £1000 For Immediate Returns
The next 5 ways to invest £1,000 are suitable if you’re looking for immediate gains.
I’m sorry to burst your bubble but ‘immediate’ doesn’t mean instant.
In this case, I mean in the short term.
With any investment, you have to give it time for the investment to bring back returns.
With these options, you may get returns in under 2-3 years.
In the case of investing, that’s short term enough.
7. Invest In Your Career
Your career is probably your main income source.
You can invest to boost your career through professional development.
This can be done by getting a professional qualification.
Or you can pay for a CV writing and interview skills service.
As a result you could get a more lucrative job.
This means more disposable income, which eventually means more money to invest.
That’s the ROI.
It has the potential to be immediate because you could get a higher paying job within months.
8. Invest In A Side Hustle
I’ve said this before, having multiple sources of income is no longer a luxury.
At least for most people with an average income.
So, consider putting some money into starting a side hustle.
This could be flipping trainers, teaching English online or Copywriting.
Or start a YouTube channel, sell personalised cakes, or have a mobile car valet business.
These may require some upfront investment to get started or to learn.
You could get ROI in under a year if you make it work.
9. Invest In A Mastermind
First of all, if I had £1000 I wouldn’t put all of it in a Mastermind.
Only a portion of it. Let me explain.
A mastermind is a group of people who share the same vision and mission.
The idea is that people in the group help each other achieve that vision.
This concept was formally introduced by Napoleon Hill in Think And Grow Rich.
You can find masterminds for anything – property, investing, entrepreneurship, fitness etc.
You could get new ideas, learn new skills and make new connections.
Such as a mentor or an accountability partner to support you on the journey.
I say this because I’m part of a mastermind. Well, it’s much more than a mastermind.
It’s called the Financial Joy Academy.
I’m connected with people with the same mission: to achieve Financial Independence.
I pay much less than £1000. Only a small portion.
But the ROI is certainly worth it.
10. Invest In Your Personal Development
I’m sure you’ve heard of Warren Buffett.
Guess what he calls the best investment he’s ever made in his life – investing in himself.
To quote him, he says “if you invest in yourself, no one can take it away from you”.
He emphasises that if you learn how to communicate you’d increase your value by 50%.
There are 5 areas of personal development you could consider:
- Mental: Build a book nook or a mediation corner to meditate in the mornings.
- Social: Learn public speaking or a new language.
- Emotional: Start journaling or speak to a professional counsellor.
- Physical: Go to the gym or get a better quality bed for better sleep.
The ROI on investing in yourself may not always be financial.
It may be more self-confidence, more knowledge or better life skills.
But you can use these to your advantage for financial gain.
I know someone who learnt a new language to apply for higher-paying jobs in another country.
11. Invest In Your Home
You can upgrade the elements of your home with £1,000.
Well, you certainly can’t revamp your whole kitchen but you have options.
There are two reasons why you should invest £1000 into your home.
Either the upgrades could improve the quality of your home, improving your wellbeing.
Or, you add value to your home to increase it’s worth.
For £1,000 you can fix cosmetic repairs such as repainting or fixing the kitchen units.
You can also get new windows and a better looking front door.
You could build a home gym or a dedicated home office space.
Remember, the ROI is a better home environment and/or increasing the value of your home.
How To Invest £1,000 Summary
In summary, the 11 ideas on how to invest £1000 are:
- Invest In The Stock Market
- Invest In Property
- Invest In A Start-Up
- Invest In Peer-To-Peer Lending
- Invest In Debt Freedom
- Invest In Retirement (Pensions)
- Invest In Your Career
- Invest In A Side Hustle
- Invest In A Mastermind
- Invest In Personal Development
- Invest In Your Home
You may invest in one or a combination of these.
Just ensure your investing decisions fit your why.
Take Action
How would you invest £1000?
Pick your option(s) and stick with it. There’s no wrong or right.
Share this to others if you found value in it and feel others should too.
Let us know how you’re getting along by getting in touch with us, we’d love to hear from you.
Knowledge is powerless without action
So take action, and take care
Thando
