How to Invest £1000 – 5 Smart ways to Start Investing

What is the best way to invest £1000?

One of the building blocks of achieving financial security is learning how to get the maximum return for their money, that way for all amounts of money you receive you know where you can confidently place it.

In this post, I’m going to share with you some of my favourite ways to invest £1000 today and all of these methods can be invested by absolutely anyone – no matter the age or background.

All of these methods and vehicles for investing I have personally tried and use myself, so I know that they work and are reliable.

Why not comment below on the ones that jump out to you to try for yourself and let me know how you get on!

For my video on this topic, I was actually grateful to collaborate with another Youtuber so be sure to check out below the video on this topic so you can also see what Tiffany recommended over in the US with that same size of money to invest.

However you might receive the money, having a plan of where you would like it to go ahead of time prevents us from seeing it fly out the door as quickly as it arrived.

One process I like to suggest to others is having a good solid Money System in the background, such as my Money Stacks Method.

The Money Stacks Method is an automatic divider of your money that as soon as it comes into your household, you split it into six money pots that work towards specific areas of your life.

By dividing up your money in whatever portions it arrives to you, then allows for each of the important areas of your life to be developed further through sudden increases in income or otherwise.

Prefer to watch instead?

If you fancy watching my video on my Youtube channel all about this very topic instead, click on the below to enjoy.

Here are some more specific ways though you can invest this money.

1. Invest tax in the Stock Market using Index funds (Tax effectively)

My personal favourite way to see a grow on any amounts of money that come our way is to use the Stock Market to work towards our financial freedom, and using an Investment ISA (Individual Savings Account) in the UK is a great way to do this tax effectively.

Within the UK, we are allowed to save up to £20k currently in any flavour of ISA tax free and withdraw tax free the same.

Check out some of my other posts that are great for Investing Basics:

Investing for Beginners UK – Retire EARLY using Investment ISAs

Cash Flow Quadrant – The Basics

How to create a Budget that works – Step by Step Guide

An Investment ISA, such as using Vanguard as your Investment Platform, allows to you invest that £20k per person per year tax free but purchase Index funds, ETFs, Bonds and a huge range of other investment options.

For example, if you were able to achieve 6-8% Year on Year interest growth on your selected investment funds – within 30 years your investment would have ten times to over £10,000 without adding a single further penny to that initial investment of £1000.

Small amounts over time with the power of compound interest really do add up, when we have the will power to leave them as an investment.

You can find out much more about How to open an Investment ISA and How Investment ISAs allow you to achieve financial freedom here.

2. Pay off Consumer Debt

Another great choice for any lump sums that come our way is to use it to completely pay off any forms of consumer debt that we might have.

It might seem like an obvious place, but any time we are committed to expenses particular debt, usually someone is getting the benefit of us paying long term for those past purchases.

If you have any form of debt, the best place to start is always looking to get rid of it as quickly as possible to free up more of your household income back into the life you want to create right now.

In the past our household has paid off a total of £24,000 of consumer debt so I completely understand the pain and stress that level of financial commitment can bring to any budget.

Once we put together a plan to get out of the debt, paying it off with a much cheaper consolidated loan and then making those payments and overpaying as much as possible – the day the debt was gone was a wonderful experience.

If you are struggling in any way to pay back more than the minimum for your consumer debt, then feel free to check out my great resource of spreadsheets called AutoPilot Money System on our store.

It is a collection of spreadsheets that allow you to budget, pay off debt using the Snowball or Avalanche method, work on your financial freedom goal amounts and much more!

3. Start an Emergency or New Opportunities Fund

Similar to having huge amounts of Debt on our shoulders is the fear that something could come our way out of the blue that puts our home and lifestyle at risk.

One of the best ways to gain security and a sense of calm in those potential times is having a dedicated “Emergency” or as I like to call it “New Opportunties” Fund set up.

Most people would suggest having at least three to six months of household income saved accordingly in an instant access type of bank account, so that if the time came that our primary source of income should fall – we can use that saving pile to ensure the lights are still on and we can live safely whilst we figure out our next step forward.

The reason I also like to word this as a new Opportunity Fund is that I also hope for you that decisions and choices regarding your life also prompt the change of circumstance that might mean having that fund of 3-6 months of living expenses covered for you and your home means greater options.

My goal is always to help others achieve time and financial freedom, and thinking of new opportunties and ways of living life a little differently should always be there for everyone.

4. Start a side business

Having multiple sources of income is also a great way to secure yourself and your home from any potential changes in financial situations.

Even better is creating incomes that do not require you to exchange your time for that money, known as Passive Incomes.

When we talked about Investing in the Stock market, that eventually will become a form of passive income where we can withdraw the interest/growth each year potentially as an income allowing the investment total pot to keep topping itself up again every year.

I decided back in 2018 to create this blog and Youtube channel as a form of a side business for fun and hoping to help others with their financial education to achieve financial security.

A great opportunity for using money that comes our way out of the blue is also to consider if the time is right to start a little side project that can bring in money now or in the future, allowing us to create another source of income.

Some great suggestions for side business ideas that you can start and maintain out with your day job hours would be writing a Blog about a topic that interests you; creating a Youtube Channel; selling digital products on an Etsy Store or Ebay; selling items on Ebay around your home or that you pick up cheaper in the local shops; teaching others a language or instrument – and the list can go on and on.

5. Invest in yourself by taking an E-course or hiring a Mentor

Investing in ourselves is probably the last place we often think about when money comes our way, but often it will pay for itself in multiple ways.

E-courses are very much available everywhere via the Internet nowadays and in every single topic you can imagine.

Similar to starting your own business, if there is a topic or potential future career you would like to make happen in your life – starting that process of learning by joining a great E-course program can just be the initial investment that leads to a new life path opening up for you.

Some of the courses in the past I have taken have included Pinterest specialist courses, Digital Marketing courses, Mindset mentorship and learning to name but a few!

If online learning is not something that you find gets the most value for money for you, the considering joining a Mentor program might be the next right step.

Finding a mentor in the area of work you are currently in or wish to be in, or simple to join a group of people with similar interests and life drives as you can be a great investment.

Taking that initial investment in your own personal development is one area that cannot be overlooked, and without doubt brings so many new opportunities into our lives that we believed possible.

I’ve personally been involved in Mentor programs and host my own for similar mindset students within Money and Life Design, and I know the difference it has truly made to my own life has been fantastic.

Why not consider one of the above investments for your own life?

Not enough money left over each month or barely enough to last you post the few few weeks?

With my Tried and Tested Principles, we can change your financial life around completely in just 1 week.