Invest with $1000 or less

No matter what your income you should always invest some of your money. It doesn't take a millionaire to invest; you just have to choose to invest. To know how to invest you have to decide what you need your investment money for. If you need it in the future and can't afford to lose it you will want to look into a low risk investment. If you can afford to lose some of it, but want to see a higher return on your investment you can look into an investment with higher risk. Here are a few options you can do to invest with $1000 or less.

First of all, before you start investing some of your money you should make sure you have some sort of emergency fund saved up. You never know when something could happen, so you need to make sure you have some liquid cash available. If you don't already have a savings built up you can open a money market account. You will gain more interest than a savings account and you don't have to risk losing your money. Go to your bank and ask about what their current rates are on their money market accounts. You can typically start an account with a small deposit. If you don't like what your bank has to offer go online and look into opening an orange account. The orange money market accounts usually have the best rates.

Once you have your emergency fund set up you can now look at a couple of investment ideas.

If you want a low risk investment and you don't want to touch your money for a bit try out a CD. With a CD you can set aside some money and gain a small return from the interest earned. They only issue with a CD is that you have to wait for the CD to mature to gain the full interest amount. You don't have instant access to you money like a savings or money market account. CD's typically can be set for 3, 6, 12, months or longer. Say you set up a CD with an interest rate of 3% for 12 months you would gain about $30 from interest. This type of investment is great for someone who is looking for almost zero risk with a small return on your investment.

If you are looking for an investment with more risk and a greater possibility of a greater return, look into stock investments. The best way to start is to open an account through a discount broker. There are many discount brokers like, scottrade, thinkorswim, ameritrade, and tradeking, that you can get started with low fees and commissions. To open an account with any of these discount brokers is fast and easy. Once your account is set up you need to decide how you want to invest. If you don't have a lot of time and want to hold onto your investment for a while you can buy blue chip stocks that are near their 52-week low, but aren't in danger of going bankrupt. Maybe their sales have been bad the past year, but they are starting to make positive gains again. It will be up to you to do the research to see what factors made the company's stock lose value and if it is worth buying it at a discount. Also, if you want to sit on a stock without jumping in and out of the market too much you can look into small-cap stocks that have been making slow, but steady gains over the last year or two. Look for a company that you can invest in and hold for 6 months to a year and check up on it from time to time, then sell once you have made your gains. The key here is to buy low and sell high.

If you have some more time on your hands and you are looking for a little more risk and reward then look into investing in penny stocks or active day changers. Investing in penny stocks can be very risky, but very rewarding at the same time. If you are going to take this investment approach you have to be ready to lose some of your money. One way to lower the risk is spread out your investments into different types of stocks and industries, you don't want to put all your money into one thing. Stocks in this category generally don't have slow steady gains. These stocks are usually more volatile and can dramatically fluctuate in price daily. If you play these stocks right you can make a good chuck of money in no time.

One of the best ways to minimize risk besides diversifying is to educate yourself. The more you educate yourself the less likely you are to fail. If you gain understanding of what you are doing you will make things less risky. Watch business news headlines, buy a couple books off amazon.com and read more on this blog to get educated with investments.