Smart Ways to Invest $1,000 in Australia
If you’ve got $1,000 spare in your bank account, you might be wondering how you can invest it and turn it into a much bigger sum. Well, the good news is that there are several ways you can do this.
While they won’t turn you into the next Warren Buffett overnight, there is no doubt that investing a grand wisely is a brilliant way to build financial habits, learn by doing, and kickstart long-term wealth.
From shares and side hustles to gold and crypto, here are eight smart, low-barrier ways to invest your $1,000 in Australia.
1. Start With Micro-Investing Apps
One of the simplest ways to start investing without needing to know all the market lingo is through micro-investing apps. Platforms like Raiz and Spaceship allow you to invest your spare change automatically. For example, if you buy a coffee for $4.50, the app rounds it up to $5 and invests the 50 cents.
With low fees and a user-friendly interface, these apps are ideal for first-timers. They also teach you the value of consistency, because investing small amounts regularly adds up over time thanks to compound interest.
2. Explore Cryptocurrency
You might not be aware of this, but according to data from the Independent Reserve Cryptocurrency Index (IRCI), some 32.5% of Australian adults own or have owned cryptocurrency. This translates to roughly 6.3 million people across the country.
With $1,000, you could consider investing in major coins like Bitcoin or Ethereum. However, if you intend to do this, it's essential to choose a secure and reliable provider.
Independent Reserve, Australia’s Trusted Crypto Wallet, is one such option. It offers a highly respected platform that boasts robust security features and is known for being regulatory compliant.
It is worth noting that cryptocurrency can be quite difficult to understand. So, if you do want to invest in it, take the time to educate yourself about it first.
3. Buy Australian Shares or ETFs
You don’t need thousands to start investing in the ASX200. In fact, platforms like CommSec Pocket, Pearler, and Sharesies let you start with as little as $5.
That said, with $1,000, you can build a starter portfolio of exchange-traded funds (ETFs) or individual Aussie shares.
ETFs are great because they give you instant diversification. It's a bit like buying a little piece of 200 companies in one go, which provides you with reduced risk while still getting exposure to long-term market growth.
4. Invest in Yourself
Sometimes, the best return isn’t from a stock or a commodity. It is actually from your own skills. Therefore, with your $1,000, you could pay for an online course, certification, or a short workshop that boosts your earning potential in the long term.
Some of the options available to you include digital marketing, coding, graphic design, copywriting or even a small business course. To find them, check out websites like Udemy, LinkedIn Learning, and General Assembly, which have loads of affordable options.
If you’re aiming for a promotion, want to switch careers, or intend to launch a startup, this kind of investment can be a very savvy move.
5. Try Peer-to-Peer Lending
Platforms like Plenti offer a way to lend your money to individuals or small businesses and earn interest in return. Essentially, you’re acting like the bank, but with greater flexibility.
It is worth noting that peer-to-peer lending carries more risk than a traditional term deposit. However, the returns can also be higher. For this reason, it is important to always read the terms and conditions and spread your $1,000 across multiple borrowers to help you manage risk.
6. Use a High-Interest Savings or Offset Account
If you’re saving for a home or want to keep your $1,000 low-risk, consider parking it in a high-interest savings account or a mortgage offset account. These accounts offer interest on your savings while still giving you quick access to your cash.
Most banks in Australia offer an interest rate of between 4% and 4.5%, while some digital banks even offer bonus interest if you meet certain criteria. This could involve making regular deposits or few or no withdrawals.
Overall, it is not an especially flashy strategy. Rather, it's very safe. However, it does reap good benefits, especially over time.
7. Start a Side Hustle or Business
If you want to make your money work harder, why not use that $1,000 as seed money for a small business website or passion project?
There are several options available to you, including launching an Etsy shop that sells prints or handmade goods, running a website that dropships or promotes affiliate marketing links, or even promoting your freelance services as a writer, tutor or designer.
A well-thought-out and executed side hustle can eventually turn that initial $1000 investment into a consistent stream of income, or even a full-time gig if you play your cards right.
8. Precious Metals
If you fancy investing your $1000 in something a little bit different, why not explore the option of investing in gold or silver?
This can be done physically (gold coins or bars) or digitally through platforms like Rush Gold, which lets you buy fractional amounts of gold.
Precious metals are often seen as a good commodity to invest in as a hedge against inflation and market crashes. Granted, it's not the most liquid investment, but it can provide you with peace of mind during economic uncertainty.
Here is some information on how the price of gold has changed over the years.
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