How can you invest with 1000 pounds?
Even with an amount of 1000 pounds you can achieve good results! In this article we look at how you can achieve a good return with £1000 pounds the stock exchange. If you reinvest this amount over and over again, you can build up a nice amount of money in the long term. But what are the best options?
What can you invest in with 1000 pounds?
With £1000 you have various investment possibilities! With these tips, you will ensure that you achieve the best results with your investments and trading activities!
You can also choose to buy a selection of shares with 1000 pounds. This used to be unattractive due to the high transaction costs. Nowadays, however, much more is possible: this is because brokers have greatly reduced their transaction fees. As a result, you can invest even a small amount like 1000 pounds in a nice selection of shares.
A good broker for investments of £1000 is eToro. At eToro, you do not pay set commissions, which means that you can take a good position even with a small amount of money. Use the button below to directly open an account with eToro:
Option 2: active trading with £1000
Stock market prices are constantly moving: you can respond to this by actively speculating. It is then important to keep a close eye on the latest developments. If, for example, there is negative news about the sale of a company, there is a good chance that the share’s value will fall. You can then take a short position with which you speculate on decreasing stock prices (besides buying).
A good party where you can actively trade CFD shares with 1000 pounds is Plus500. You can try out the possibilities completely free of charge & without risk with a demo. Use the button to directly open an account with Plus500:
Option 3: investing in an index fund
Another attractive option when you own 1000 pounds is to invest in an index fund. With an index fund, you invest once or periodically in a broad selection of shares. As a result, you immediately apply a good degree of risk diversification, which is ideal for the average investor. In addition, the costs are low when you invest in index funds, which is of course ideal when you invest only £1000.
I myself always recommend DEGIRO for buying and selling index funds. At DEGIRO you pay no buying and selling costs for a large selection of core funds. Use the button to directly open an account with
Option 4: pay off debts
Sometimes people are so focused on making money that they forget their debts. When you have a debt, you pay monthly interest on it. By paying off the debt, you actually achieve a nice return immediately. Especially when the interest rate on your debt is high, it is better to pay it off immediately. With an interest rate of 5%, you save £50 each year when you use a thousand pounds to pay off your debt.
Option 5: investing in raw materials
It may also be wise to invest part of the GBP 1000 in raw materials. Precious metals such as gold and silver are relatively stable in value and perform well during an economic crisis. It is even possible for some brokers to trade actively in the price of raw materials. Would you like to know more about investing in commodities? Read all about it in our article on the subject:
Option 6: cryptocurrencies
Cryptocurrencies can be very interesting for the speculator who does not mind putting (part of) the 1000 pounds into a very risky but potentially profitable security. Cryptocurrencies regularly drop and rise by tens of percents in value. If you buy the right cryptocurrency at the right time, you can achieve a substantial return.
Do you want to know more about investing in cryptocurrencies? Read our article on the subject:
Option 7: Lending £1000
You can also choose to lend out your money. You can lend out 1000 pounds to a friend at a low-interest rate. Another option is to buy a bond: with a bond, you lend money to a company or government. There are also special online platforms where you can lend money to new companies: this form of investment is also called crowdfunding. First examine the creditworthiness of the party to which you lend your money.
Option 8: investing in your pension
Research shows that many people forget to build up assets for retirement. That is a shame! When you start building up your pension at a young age, you end up with a large amount later on. Moreover, you often receive interesting tax breaks when you put money aside for your pension.
Option 9: Investing £1000 in a company
Another good option is to invest GBP 1000 in your own company. In practice, the return on your own business is unlimited. Of course, you do need a good idea: just spending 1000 pounds on any idea is not going to make you rich. Moreover, it is important to remember that entrepreneurship often costs a lot of blood, sweat and tears. This option is therefore not suitable for the investor with a limited amount of time.
Option 10: investing in education
Sometimes an investment in yourself can be the best choice. You can buy some good books on managing your finances. You can also develop a new skill that may help you make more money in the future. In fact, an investment in yourself always pays off. Even when you lose money, at least you have grown as a person!
Is it possible to invest GBP 1 000 without risk?
The only way you can practically invest £1.000 ‘without risk’ is by putting it in a savings account. The chance of losing money is practically 0, at least when you look at the absolute number on your account. In practice, however, inflation makes your money worth less and less: the prices of products rise every year while the amount in your savings account remains the same.
It is certainly advisable to keep an amount in your account for difficult times. However, it is a shame not to invest anything: in that way, you can be sure that in the long term, your assets will be worth less and less.
Is it wise to invest 1000 pounds?
It is certainly wise to invest £1000. It is precisely by starting with smaller amounts that you increase the chance of building up a large fortune in the long term. After all, you also receive a return on your return, as a result of which the amount you build up grows exponentially. In the beginning you don’t notice much of this, but in the long term your capital grows faster and faster. So, you can never start early enough.
Investing 1000 pounds per month
When you have sufficient income, it can be smart to invest GBP 1000 per month. When you have enough time, you can do your research and select strong stocks. If you have little financial knowledge, you can choose to periodically deposit a fixed amount into an ETF. In the latter case, you still benefit from stock market developments without a lot of effort.
Why is investing wise?
Saving is no longer profitable; worse still, it only costs you money these days. Savings interest no longer outweighs inflation, which makes your money worth less in the long term! By investing, you can achieve a higher return. If you get it right and get to work actively, you can even achieve excellent results. There are even people who earn a living as a daytrader and eventually stop working.
However, it is important to remember that return is a reward for risk. If you aim for a high return, you also run a higher risk. With some investments, you can even lose your entire investment!
How do you achieve a high return with 1000 pounds?
If you want to achieve a good result with a small amount of GBP 1000, you can make use of derivatives. With derivatives, you can actively trade in, for example, stocks and commodities. But how do you achieve a higher return by using them?
If you want to achieve great results with investing, and you want to put in 1000 pounds, you can use a lever. With modern CFD brokers you can use leverage of up to 1:30, but what does this actually mean? Leverage allows you to take positions with a higher value than the amount you have in your account. With 1000 pounds, you can then invest as much as 30,000 pounds.
However, it is important to use this leverage responsibly. After all, if you use your full leverage of one to thirty, every pound of increase or decrease will be thirty times as strong. An increase of one pound will result in a gain of 30 pounds while a decrease of one pound will result in a loss of 30 pounds. Therefore, be a little more cautious with the leverage in the beginning.
All this can be done via the so-called CFDs. CFD stands for Contract for Difference in which you enter into a contract and benefit from the exchange rate difference. When the price rises, the difference in the price will determine your result.
Incidentally, this new way of investing in CFDs has even more advantages:
- At the many brokers you can try out the possibilities with a free demo.
- You can bet on both rising and falling prices.
- You can invest in stocks, commodities and Forex within one account.
- You do not pay any fixed commissions in this way of investing.
Would you like to try the possibilities for free with a demo? Then find out which parties you can open a free investment demo with:
Example of an investment
The AEX is a popular instrument to trade in and with the most popular CFD brokers this is no problem. The price is at 500 points, and you expect an increase of 30 points. Because you are fairly certain of this increase you decide to use a high leverage and with your deposit of 1000 pounds you buy for 10,000 pounds of CFD contracts which equals to about 20 contracts.
When your prediction finally comes true, you will achieve a positive result of 20 times 30 pounds, which is a profit of 600 pounds or 60%. By using a stop loss you can ensure that your losses are not too high, it is certainly advisable to make use of this possibility.
Ultimately, this new way of investing is attractive to the active trader. Thanks to the presence of a lever, you can open larger positions: this is a possibility, not an obligation. In addition, you can speculate on both rising and falling prices: this allows you to respond well to the latest developments.
Please note that trading in CFDs involve risk. You may lose your entire investment.
Getting started with investing yourself
While investing seems fun, it is wise to start with a free demo account first. With different brokers, you can quickly and easily open a demo account. By practising you will learn to recognize patterns, and you will know what to pay attention to be successful.
As soon as you know enough about investing, and you know what to do, you can deposit the thousand pounds into your account. You can then start trading with real money and start achieving good results. By the way, don’t forget that your profits must outweigh your losses: if your strategy is built on this principle, you increase your chances of success!
Long-term investment with 1000 pounds
You can also choose to invest in the long term with an amount of GBP 1000. The disadvantage of investing smaller amounts in shares, for example, is that the transaction costs are often relatively high. You can prevent this by investing your money in an investment fund.
A major advantage of investing in investment funds is that you also spread the risks over different securities. This reduces the risk of losing your entire investment in one fell swoop. The most advantageous party to invest in is DEGIRO, click here for more information.
When I was 16, I secretly bought my first stock. Since that ‘proud moment’ I have been managing trading.info for over 10 years. It is my goal to educate people about financial freedom. After my studies business administration and psychology, I decided to put all my time in developing this website. Since I love to travel, I work from all over the world. Click here to read more about trading.info! Don’t hesitate to leave a comment under this article.