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How to start investing with just $1000

Sponsored by eToro
·4-min read

Investing is no longer just for the uber-wealthy. Online trading platforms such as eToro mean individuals can now access a range of markets on different scales, so even those with limited funds can invest their money. If you’re clever, you can potentially turn a grand into a goldmine. Here’s how:

Fractional Shares

You must invest at least $500 when you’re buying Australian shares, so it can be hard to buy widely if you don’t have a lot of cash to play with. However, US stocks don’t have the same restrictions. eToro lets you invest just $50 at a time, so you can buy a variety of stocks for a low price. Even better, fractional shares allow you to buy a piece of one full share of a company or exchange traded fund. They’re an ideal way to tip your toe in the stock market if you aren’t flush with cash, because you don’t have to buy a full share in a company. Instead, you can use whatever money you have to buy a bit of a company’s stock - even if it’s only one per cent of a share. It means you can own a large variety of stocks for relatively little cash, which gives your money more potential to grow.

0% commission

The commission fees usually charged by brokers when you buy or sell an investment product, can range from a flat fee between $1 and $50, to a percentage of the total transaction value. If you’re starting with a small amount of money, fees can seriously eat into your returns. eToro offers 0% commission on transactions, meaning you can invest your full $1000, rather than start from behind.

Micro-investment app

Micro-investing allows you to regularly invest small amounts of money into an investment portfolio, which can help you earn more than putting the same amount of money in a normal savings account. Some apps use your money to buy fractional shares, others round up small purchases and invest your small change. For example, a $3.60 coffee would be rounded up to $4 and the remaining 40c would be invested. Depending on how long you use the app for, and whether you choose high or low risk funds to invest in, they can pay off – albeit slowly.

Super

Putting an extra $1000 into your super this year could bag you big returns. If you’re earning over $37,000 and invest $1000 of your pre-tax income into your super account, you’ll only be taxed 15% on that amount - which is significantly less than your usual marginal tax rate. This means that $850 of your money will be invested, rather than just $655 (or less) if you took that money home in your salary packet. Add on the years of compound interest it will make you, and that $1000 will give you some serious bang for your buck.

Diversify with cryptocurrencies and CFD trading

CFD (Contract for Difference) trading on eToro offers options which wouldn’t be available with traditional trading. It allows you to trade commodities, indices and currencies with greater flexibility, giving you access to foreign markets and leveraged trading. This means there are more places to invest your $1000 – and a higher possibility of good returns.

Cryptocurrencies are another alternative way of trading available on eToro. This is a way of trading currency and assets digitally, independent of a third-party. Cutting out the middle-man means they’re less costly, and more efficient than traditional currencies. Traders on eToro receive free access to the latest crypto market research and news, so you’re able to time your trades well, and help your $1000 go a long way.

For more information visit etoro.com/stocks.

Disclaimer:

eToro AUS Capital Pty Ltd, ABN 66 612 791 803 AFSL 491139. CFDs are highly leveraged and risky, and may not be suitable for all investors. You may lose more than your initial investment.

Stocks on US exchanges are offered through eToro Service (ARSN 637 489 466) operated by Gleneagle Asset Management Ltd ABN 29 103 162 278, AFSL 226199, and promoted by eToro Australia Pty Ltd. CAR 001281634. All other stocks are offered as derivatives and bear commission.

This information has been prepared without taking your objectives, financial situation or needs into account. You should obtain advice independently in light of your own objectives, financial situation or needs and refer to our FSG and PDS before deciding whether to trade with us.

Zero-commission does not apply to short or leveraged positions and means that no broker fee has been charged when opening or closing positions. Other fees may apply. For additional information regarding fees, visit stocks.etoro.com