Having $1,000 to invest is a milestone. Typically, it means debts have been paid off and income exceeds expenses. Here are three different ways to invest that hard-earned $1,000.
Betterment is an online financial advisor. New investors to the platform provide their age, income, and retirement status to receive a suggested portfolio determined by the platform’s proprietary technology. Betterment portfolios are invested in exchange-traded funds (ETFs). Betterment’s Digital Plan has no minimum balance and the annual fee is 0.25%.
In contrast to Betterment, M1 Finance does not advise investors on which portfolio to select. Instead, M1 Finance allows investors the option of choosing either or both of two ways to purchase securities. With one method, investors can create a custom portfolio of stocks and ETFs. The other method gives investors a selection of almost 100 “Expert Pies”, which are portfolios pre-crafted by the company’s financial specialists to meet certain goals. M1 Finance is a free service that has four account types: individual, joint, retirement, and trust. The minimum balance is $100 for taxable accounts and $500 for retirement accounts. Investors can schedule automated investing and own fractions of shares.
The United States Department of Treasury sells securities via Treasury Direct. Treasury securities are very conservative investments. TreasuryDirect’s numerous securities include:
- Electronic I Bonds earn interest for 30 years. They can be purchased for as little as $25. While I bonds earn monthly interest, investors receive the interest when they cash in the bond. I bonds have to be held at least one year to pay interest.
- Treasury Notes, also known as T-Notes, pay interest every six months until the note matures. Notes are available in terms of 2, 3, 5, 7, and 10 years. When the note matures, the investor receives the note’s face value. The minimum purchase is $100.
- The principal of Treasury Inflation-Protected Securities (TIPS) goes up in times of inflation and down during periods of deflation in accordance with the Consumer Price Index. TIPS pay interest every six months. The minimum purchase is $100. When TIPS mature, the investor receives the whichever greater of the original principal or the adjusted principal.