$1000, is it enough to start making some successful investments?

[Petunia 100]

Before anyone invest anything, they should have done some learning ahead of time and then once the $1k is invested they will keep learning the reality of investing in the stock market. There are just some things that you can't learn without taking that first step. Then as they go they can keep investing more and if they bought stock, see how the dividends pay out, etc. I got the feeling that they had been saving for a while to get to the point of having that much and once they have made the initial investment, they can keep adding to it.

Just like Disney Steve, if I hadn't put small amounts into my account, I wouldn't have anything at all in it. My initial investment that I have added to as possible has grown 22.65%. That is a better return than anything else I could do especially since I am disabled and have limited strength and energy. To tell the OP that $1000 isn’t worth investing except by doing things like selling bottle of water or other small business, is sad. One of the harder things that we poorer people run into is that financial advisors don’t want us. Many mutual funds don’t want you unless you have a great deal of money and if you can get into them the additional investments are huge amounts again. So, finding ways to invest a $1000 can be tricky if you want to start investing in the stock market, but that one investment can get your foot in the door.

In the current issue of Money magazine there is an interesting article about someone that many of us know about (Shark Tank) and that is Mark Cuban, a self-made millionaire (maybe billionaire can’t remember which) and how he went from being poor to being fantastically rich. And it wasn’t by listing to naysayers that he didn’t have enough money to do certain things, like invest in the stock market.

Charles Schwab will open an IRA with $100. If you choose one of their Target Retirement Index Funds, the minimum is $0. Those are excellent funds, every bit as good as Vanguard's.

My daughter recently opened her Roth IRA (yay!!) with $120 at TD Ameritrade. (I'm not sure what the minimum is, but she opened with $120). If you stick to a specific list of ETFs, you can trade for free. And Vanguard's VTI, VEU, and BND are all on the list. That is everything you need for the 3 fund portfolio.

Betterment has no minimums. They invest your money in a pre-determined mix of etfs. They charge a fee of top of the expense ratios of the etfs, but are still quite reasonable (about .5%).

So, there are options out there. More than there used to be.

[Petunia 100]

Heh, I love this forum.

Okay, I'll take some of that discussion.

If your investments are adequately diversified, you are sufficiently knowledgeable about investing and there are little to no transaction costs, why do you need to hire an ETF or targeted date mutual fund manager to do it for you?

No one manages an index fund, so there is no one to hire. That's what passively managed means.

[Nutria]

No one manages an index fund, so there is no one to hire. That's what passively managed means.

TBH, there's no reason why a target date fund must be passively managed.

[disneysteve]

TBH, there's no reason why a target date fund must be passively managed.

Are there are any actively managed target funds? I certainly wouldn't invest in one but I'm curious to check them out and see their structure and expense ratios.

[~bs]

I think there are quite a few actively managed target date funds, with higher fees than passively managed ones of course.

Difference between target date funds and "normal" funds is that the target date funds represent a bucket of different asset class funds. The target date fund for 2050 maybe comprised of 90% stock, 10% bond. An actively managed fund means that the fund manager picks and chooses the stocks and bonds that make up the 90% and 10%. As time passes, they'll reduce the stock holdings and increase the bond.

they're good for investors that can't even be bothered with rebalancing their portfolio every once in a while, I guess. passive managed funds tend to carry their own company EFTs. Fees for the convenience of the target date fund tends to be is slighly higher than their component funds. For instance, vanguard might be:

70% Total Stock Market ETF (VTI)
20% Vanguard Total International Stock Index Fund (VXUS)
10% Vanguard Total Bond Market ETF (BND)

[Britanny_Wells]

Money magazine does a feature every year called What to do with $1,000. If you Google that, you can find the articles from prior years.

Sure, there are always ways to invest relatively small amounts. The challenge used to be diversification and fees but now with commission-free ETFs, you can actually get yourself a nicely balanced portfolio with $1,000.

I have no doubts that Google knows something about it. But I'm pretty sure that people here (experienced enough) have some much better ideas and can suggest something interesting.

[Britanny_Wells]

Yep that's how I started out 27 year ago but I had 3k to invest.

My first professional job my boss helped me get started in investing. I still remember the funds, Gabelli Asset Funds, American Century Ultra Fund and Vanguard Money Market Fund. I put a 1k in each and set up auto deposits of $25 monthly. Over time I upped my auto deposits. We also had a plan that we could buy US Savings Bond and they'd take $25 out of my pay and I'd get 1 $100 Saving Bond a month. I'm loving that now that I have 2 in college and can cash them in for their school!

Anywho, get started and keep at it. Add more when you can and you'll be surprised in 30 years what your 1,000 grows to.

Thanks for your post. It's a really good experience. You know, you even inspired me and made me feel more confident.

[Britanny_Wells]

You can start investing at any point, but with small amounts you don't have much economy of scale and commissions and fees can eat up a good percentage of your capital.

I waited until I had around $40,000 in cash saved up before I decided to jump into the stock market.

I just wonder how long did you have to wait?

[Nutria]

they're good for investors that can't even be bothered with rebalancing their portfolio every once in a while, I guess.
[snip]
70% Total Stock Market ETF (VTI)
20% Vanguard Total International Stock Index Fund (VXUS)
10% Vanguard Total Bond Market ETF (BND)

Knowing that $1,000 is the minimum buy-in for these funds in IRA accounts ($3,000 for standard, taxable accounts), stop assuming that everyone has the $10,000 required to have a 70/20/10 initial distribution.

[~bs]

Knowing that $1,000 is the minimum buy-in for these funds in IRA accounts ($3,000 for standard, taxable accounts), stop assuming that everyone has the $10,000 required to have a 70/20/10 initial distribution.

??? Did I not say:

https://www.bogleheads.org/wiki/Three-fund_portfolio

just start with the 3 fund portfolio and call it a day. dump the thousand into the equity fund, then as you have another thousand or two, buy into the other funds.

And I'm pretty sure that there is no minimum buying requirements, even through a vanguard account, and I'm more sure for a 3rd party brokerage account. For the most part, buying requirements are for mutual funds, and not EFTs, which are traded like shares of stock, and the minimum is usually 1 share. I could be mistaken, but pretty sure I listed the EFT version of the funds. Hell if you wanted to, you could trade in increments of $100 or lower, which might not make sense unless you're using no commission funds, of which I believe are on a broker by broker basis. But because of the advent of EFTs and no commission EFT funds, you can pull off a diversified portfolio even investing $1000.



How to open an IRA

Follow these steps to help you make your decisions and open your new IRA.
....................
• Get started with as little as $1,000.*
.............................

The minimum initial investment for Vanguard Target Retirement Funds and Vanguard STAR Fund is $1,000. A $3,000 minimum applies to most other Vanguard mutual funds. For ETFs (exchange-traded funds), the minimum initial investment is the price of 1 share. Details are provided in each fund's profile.

https://investor.vanguard.com/ira/how-to-open-an-ira?lang=en

[scfr]

It seems that this amount of money isn't enough for great purposes. But all starts with small steps, doesn't it? Is there a way to turn $1000 into something bigger, and then to say "yes, I've done it! This is the most intelligent and successful investment."?

Yes, the important thing is to start. But please don't be too disappointed if you never wind up saying that you made the MOST intelligent and successful investment. There's always going to be some hot stock or fund doing better than what you are invested in.

[Gailete]

It seems that this amount of money isn't enough for great purposes. But all starts with small steps, doesn't it? Is there a way to turn $1000 into something bigger, and then to say "yes, I've done it! This is the most intelligent and successful investment."?

Absolutely. I did it with less. My stock portfolio of 5 individual stocks is currenty at $5641. I invested in little portions as the money came in. I'm up $1025 or 22% from what I actually invested with one stock up 75% (and that is down a bit from where it had been a few months ago).

It seemed to take forever to get to that first $1000 invested as I didn't invest that much as one chunk but usually about $200 at a time, but from there it has been pretty steady. I invest when and what I can. I haven't taken a bit of it out (I have this thing about spending money from savings accounts). It may not seem like much to the folks with near or over a million dollars in assets, but it is money that if I hadn't invested it, would be Gone with the Wind!

The thing is you have to set your own parameters and stick with them. No, 'yippy I'm up $3 going to sell and go shopping for new clothes' or whatever. Just let it grow. I only invest in dividend paying stocks, so each year I keep getting more shares and the stocks themselves are growing in value so making money two different ways.

[clatoden99]

Invest now. Time is the most significant indicator of how large your wealth will become. Research compound interest. The sooner you begin the wealthier you will be. Period. Start now, my man. It will do you well.