How much can I make investing 1000 in stocks? Find out how much money can be made from investing 1000 into the S&P 500 or growth stocks. I am not a licensed investor and this article is not investment advice. This article may contain affiliate links.
A lot of people hold off on investing in stocks because they think they don’t have enough money.
They think investing $1,000 is a waste of time because it won’t generate enough money.
But this attitude is ultimately why they end up poor. Successful investing requires patience and the right habits.
Perhaps it’s because people don’t realize how much they can make with a small amount of money.
In this article, I will break down how much money investors can make by investing even 1000 dollar into stocks.
Let’s dive in.
How Much Can I Make Investing 1000 In Stocks?
The amount investors can make investing in stocks depends on the rate of return and the time frame that the money is invested for.
The higher the return and the longer money is invested for, the more you will earn.
Historically, investors can expect to earn anywhere from 7 to 10% per year by investing in an S&P 500 index fund.
Now that we know the rate of return average investors can expect to generate, let’s get back to the question: How much can I make investing 1000 in stocks based on a 7 to 10% return per year.
The answer is $70 to $100 dollars per year (1000 * 1.07 = 1070).
Don’t Forget About Compound Interest
I’m lucky because I get excited about earning $70 to $100 per year doing nothing.
But most people don’t get excited about earning such a small sum of money. They neither have the patience nor the ability to see the long-term picture.
Frankly, it’s because the average person doesn’t understand how compound interest works.
Once you understand how compound interest works, you will never see money the same way again in your lifetime.
For instance, if you leave that same $1,000 invested at a 7% annual return for 30 years, it would be worth $7,612.26. (Source: Compound interest calculator via Get Smarter About Money)
So really, every $1,000 you can invest for 30 years is worth $7,612.26.
To jump back to the question (How much can I make investing 1000 in stocks), the answer is $6,612.26 at a 7% return for 30 years.
If you start to think of every $1,000 as $7,600 if it is invested, it will make you look at money differently.
How Can I Invest 1000 For A Quick Return?
Of course, you may not want to wait 30 years for your money to compound.
Some people want to invest $1,000 and earn a quick return.
If that’s the case, then you should invest in growth stocks instead of an index fund. However, you will have to deal with more uncertainty and volatility.
Although this way of thinking is somewhat greedy, it is possible to grow a small sum of money a lot faster if you invest in the right stock.
For example, a $1,000 investment in Tesla in August 2011 would be worth more than $148,000 today. That’s a return of nearly 15000% over the past decade.
Therefore, it’s possible to make $147,000 from a $1,000 investment if you select the right stock.
Obviously, the challenge is selecting the right stock.
Also, you might not think of a decade-long investment as a short period of time.
But in reality, a 5 to 10 year time frame is really the minimum time frame you should be investing in stocks for.
Otherwise, you are just a speculator or trader.
Is 1000 Enough For Stocks?
$1,000 is absolutely enough to start investing in stocks.
I started with a lot less and now my portfolio generates more than $1,000 per year in dividends alone.
Furthermore, the examples in this post are proof that even $100 is enough to invest in stocks.
The rise of zero-commission brokers and low fee ETFs have made investing accessible for everyone.
Now that it’s possible to buy fractional shares, you can start investing in high quality growth stocks with as little as $1.
How Much Can I Make Investing 1000 In Stocks — Final Thoughts
In summary, investors can make anywhere from $70 to $100 per year by investing in an S&P 500 index fund.
Over a 30 year time frame, a 7% return that is compounded annually will turn into more than $7,600.
So really, every $1,000 you can invest for 30 years is worth more than $7,600. In other words, you can make over $6,600 by investing $1,000 in stocks.
If that doesn’t excite you, alternative options like growth stocks will earn higher returns in a shorter amount of time.
For instance, a $1,000 investment in Tesla would have turned into more than $148,000 over the past decade.
Consequently, investors can make anywhere from $70 per year to as much as $14,700 per year by investing $1,000.
To get the latter return, you just need to find the next generational growth stock, which is no small task. But it is entirely possible.
Related Posts On Investing In Stocks
Investing With Little Money — 6 Easy Steps To Invest In Stocks When You Are Starting From Nothing
Best Growth Stocks — 4 Stocks That Could Make You Rich
Is Buying Fractional Shares Worth It? 5 Undeniable Benefits
How To Invest With $1000 (Diversification + High Returns
What Is The Minimum Amount Of Money Needed To Invest In Stocks?
I am not a licensed investment or tax adviser. All opinions are my own. This post may contain advertisements by Monumetric. This post may also contain internal links, affiliate links to BizBudding, Amazon, Bluehost, and Questrade, links to trusted external sites, and links to RTC social media accounts.
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