If you have $1000, what would you invest?
By scheng1
@scheng1 (24649)
Singapore
January 8, 2011 7:12am CST
A reader in Triond asked me about investing with $1000.
His intention is to use the $1000 (Canadian currency) to change into US Dollars. He wanted to know how I feel about it.
My reply is as follows:
"Hi, you have asked about trading Canadian dollars for USD.
Personally I do not think it is wise. The US government is diluting the value of USD by printing more money. That means the value of USD is unlikely to increase.
This is much like dividing a cake into 50 parts instead of 10 parts. Each slice is smaller when you cut into 50 parts.
In my opinion, silver investment is much better. Since you are in Canada, you might like to consider Maple Leaf coins or Silver bullion. However, check the international price of silver before buying."
What do you think? What would you invest if you have a thousand dollars on hand right now?
1 person likes this
14 responses
@afreen1234 (122)
• India
8 Jan 11
i would have invested in stock market to multiply it as i've good knowledge of stock market.
@scheng1 (24649)
• Singapore
8 Jan 11
Hi Afreen1234, I agree that stock market is a good choice.
Even if a person does not have much knowledge about stock picking, he can always invest in index fund.
The best thing about stock market is that many companies are giving dividends a few times a year.
The dividends and future capital gains are good for those who are knowledgeable.
@scheng1 (24649)
• Singapore
8 Jan 11
Hi Afreen, I agree that stock market is one of the best form of investment.
However, a person has to study accounting and corporate finance to understand the investment terms.
The most basic is to know that EPS stands for earnings per share, and how the ratio can affect the share price.
@afreen1234 (122)
• India
8 Jan 11
yes, of course. we should study the stock market first. i find stock market as the best source of income
@scheng1 (24649)
• Singapore
9 Jan 11
Hi Lazette, that is a very good idea.
i did not even know that you can open a little shop in Facebook.
I think you can get a very good returns if you invest a thousand dollar for the business expense.
What do you intend to sell online? How do you ship the products to your customers?
@scheng1 (24649)
• Singapore
9 Jan 11
Hi Lazette, I like your business concept.
I think if you learn to make little earrings or other accessories, you can even increase your profitability of the online business.
Too bad I have no appreciation for arts and crafts at all. I do not use perfume, accessories or even make up.
I guess I am good in writing articles, so I will stick to it.
@lazette (216)
• Philippines
9 Jan 11
For one thing, I'd like to focus first on selling stuff to people within my country. As for products, I'm actually planning to import some apparel or some accessories and stuff (and possibly some anime/cosplay-related items), bring them over here and sell them via Facebook under my current currency, and add in a reasonable profit in the final price.
And little Facebook shops are all the rave these days. Just make it like a normal human's profile page, but instead, well, turn it into a shop, post pictures of products in the Photos tab, and do transactions via PMs and pay thru bank deposits or even PayPal, like my friend does.
@lingli_78 (12822)
• Australia
9 Jan 11
i don't have any job at the moment and desperately looking for one... so if i have $1000, i won't invest on anything but keep it first for my survival... i need $ to pay for my daily expenses and bills... and i never dare to take any risk anyway... if i invest and i lost my money, i will be very upset... take care and have a nice day...
@scheng1 (24649)
• Singapore
9 Jan 11
Hi Lingli, survival is definitely important.
Even if you have a job, you might even use the $1000 to pay off the credit card debt first or the mortgage.
I hope you have success in your job search or online earnings. It is important to have different sources of income.
@scheng1 (24649)
• Singapore
9 Jan 11
Hi Brew2x, starting a small business is a good choice, given the small amount of money.
I do not think putting the money in bank is a good idea, since the value of money usually dilutes due to inflation.
You may even consider buying a house for rental if you have a bit more money. $1000 is hardly enough to pay for the downpayment of the house. If you have more money for downpayment, the monthly rental is enough to cover the mortgage.
@scheng1 (24649)
• Singapore
19 Jan 11
Hi Brew2x, I think we can learn a lot from those wise elders.
Most of the older generation in my country did not receive education when they were young.
They were very poor, yet they knew the value of investing in rental properties. Many of them lived in a small apartment, and kept on buying big house or big apartment for rental.
They belonged to the "biscuit tin generation" since they used to keep money in biscuit tins, instead of trusting a bank.
They lived as though they were poor, and yet they had properties with market value of millions of dollars.
@tiffnkeat (1673)
• Singapore
8 Jan 11
Hey fellow SG, invest in yourself. I don't know what your financial condition is, but in whatever investment you want to consider, consider too you need the knowledge to ensure it is with eyes open. Split your investment dollar to a. go for training and b. whichever option you have decided.
If you have a job, ever consider how to use the $1000 to improve yourself either image-wise or knowledge-wise? Cheers!
@scheng1 (24649)
• Singapore
8 Jan 11
haha Tiffnkeat, invest in you?
Let me see, what is the internal rate of return for investing in you? Maybe when you have finalized the balance sheet, the income statement and the owner's equity statement, I will take a look and consider.
Actually I think our national library is the best place to source for investment knowledge.
After that, it boils down to practical knowledge.
You know what is the investment mistake that still causes heartache for me? It is Genting share. I sold it when it was $1.18.
My heart is still very sore.
@tiffnkeat (1673)
• Singapore
8 Jan 11
On a lighter note, you can invest in me....lol...or one of the Lotters. Just kidding.
@HuGui897823521 (8)
• China
9 Jan 11
For I am a student now,I would buy some books which I like but can't borrow from library.
@scheng1 (24649)
• Singapore
9 Jan 11
Hi HuGui, that is a very wise use of the thousand dollars.
You can sell the books to other students after you have finished reading them. In this way, you can buy many books with the thousand dollars and the money from selling away the used books.
I used to spend a lot of money on books too. The problem is in storage of the books, since i stay in a very small apartment.
@jhartana (1084)
• Australia
8 Jan 11
If I were that reader I think I would avoid forex trading because the risk is too high. No one able to predict how the economy would look like in future so I avoid forex at all costs. I would keep that money in my bank account and start accumulating interests.
@scheng1 (24649)
• Singapore
9 Jan 11
Hi Jhartana, I definitely avoid forex trading and I do think that to buy US dollar now is very stupid.
i do not mind open a bank account for fixed deposit in Renminbi, and earn the interest for a year or two.
After a year or two, I can convert the sum back to local currency, and earn the interest plus currency appreciation. Renminbi is the only currency I believe will appreciate after a year or two.
I definitely have no faith in US dollar.
Actually $1000 is not a big sum of money. If I have debt with high interest, I will use it to pay off the debt first.
@owlwings (43910)
• Cambridge, England
8 Jan 11
Buying US dollars might not be too bad about now. They are fairly low in terms of other currency at the moment and you might make a dollar or two in six months or a year. I think, however, that there are far better things one could do with $1000 CAD.
Buying silver or gold is one option, buying a small portfolio of stocks is another but both of these things do need some expertise and knowledge of the market (and I, personally, don't have that). I'd be prepared to risk part of the $1000 if I could be convinced that someone with knowledge would invest it for me (and I'd be prepared to pay a commission for that, of course).
Personally, I would use the money to invest in something I know about (which happens to be books and antiques). If one is lucky, has an 'eye' for such things and is aware of which markets to buy in and which to sell in, this can be a solid business with a good return.
@scheng1 (24649)
• Singapore
8 Jan 11
Hi Owlwings, there is no doubt that the value of the dollar is very low compared to other currencies of the world.
The question is whether the USD will appreciate against other currencies.
Judging from the current situation, I doubt so. The US government is not creating jobs or even protecting jobs.
The US government is not able to cut down on massive debt.
I think the only reason for anyone to buy US dollars is for travelling or sending their kids to colleges.
As an investment tool, I very much doubt so.
Actually investing in gold and silver is quite simple. There is only one price for gold and silver internationally.
You can search for gold spot price or silver spot price to view the daily price change. The gold bars and silver bars are usually selling at a certain percentage over the spot rate.
@cutepenguin (6431)
• Canada
8 Jan 11
I wouldn't invest in foreign currencies, because I think you lose money in fees along the way. So even if the exchange rate should allow you to make money, it doesn't always work that way.
I would probably just try to save a bit more and then invest in mutual funds.
@scheng1 (24649)
• Singapore
9 Jan 11
Hi Cutepenguin, I would not want to invest in foreign currencies too, especially US dollar.
I might consider to invest in Renminbi if I have spare cash. The easiest way is to open a Renminbi saving account, and earn interest on the amount.
That is useful if I do not need the money for a year or two.
Even then, I agree it is risky, since I do not know how the China government will react.
I think index fund is better than mutual fund. Index fund does not hire fund manager, and the expense is very low. After deducting the necessary expense, index fund always outperform mutual fund.
@dragon54u (31634)
• United States
8 Jan 11
As a citizen of the U.S. I would say you are wise to avoid the dollar. Our politicians will keep diluting the dollar to keep the people happy who are receiving free aid. They promised to cut expenses and begin paying off the debt but they won't. They will probably raise our debt ceiling even though they have vowed to freeze it--spending more money means they win more votes and can stay in office. That means the dollar will continue to devalue.
I wish I could say you are wrong but you are very astute!
@scheng1 (24649)
• Singapore
8 Jan 11
Hi Dragon54u, I think the whole wide world is wondering what is the government of United States doing.
How can a great country with such resources and talents owe so much money, and still not able to pay its debt?
The government has failed in many ways. It is not able to teach the children to read and write well, and students fare badly when compete in international examinations. It is not able to teach the people to eat healthy.
It is not able to pretend jobs from moving out of the country. It has failed to pay debt and sustain the value of the currency.
I wonder what is the use of those folks except to make noises at China and other countries.
@rosdimy (3926)
• Malaysia
8 Jan 11
Personally I feel that forex trading is too risky. The political scenario of any country can change, thus affecting the real value of its currency.
If I have money to invest I would choose gold or silver. At the very least they are tangible objects, and can be used to purchase something else. Money tied up in forex, as I understand it, is not easily accessible. I see forex as being volatile. A collapse of the ruling government, or at least its financial establishment, can lead to great losses to an investor.
@scheng1 (24649)
• Singapore
8 Jan 11
Hi Rosdimy, I agree that forex trading is very risky, since the governments can tighten or loosen the monetary policy.
I think it is very stupid of anyone to buy USD at the moment. I do not see how the USD can appreciate against other currencies of the world in the foreseeable future.
I agree that gold or silver is a better choice.
However, with just $1000, even a 1 oz gold bar is out of reach. Silver is affordable for most of us at the moment.
@yugasini (12893)
• Secunderabad, India
8 Jan 11
hi scheng,
how are you i am fine no mail or response from you,my advice is investment in either gold or silver is better than the dollars,but at present silver investment is good,the silver price may increase more in coming days,but i have money to invest i will invest in silver than any other thing,have a nice day
@scheng1 (24649)
• Singapore
8 Jan 11
Hi Yugasini, you will have a lot of money in the future, since you are working hard to write articles.
The earnings from article writing is very small in the beginning.
Once you have a few hundred articles, you will see the earnings increase even though you stop writing.
I just used part of my savings, and online earnings to buy a few silver bars. I intend to keep them for a long time.
@scheng1 (24649)
• Singapore
8 Jan 11
Hi Maezee, investing is risky if a person does not have much knowledge about the investment tool.
I think it is impossible for anyone to learn everything about investment. However, it is possible to learn just one or two investment vehicles.
For most of us, buying a house is a major decision. Since we can spend the time and money to learn about buying house, we can also buy it for investment purpose. However, $1000 is not that much money for any serious investment. It is wise to use it to pay off debt.
@scheng1 (24649)
• Singapore
8 Jan 11
Hi Ekoytyas, I doubt $1000 is enough to pay a gold bar.
Even the smallest gold bar, the 1 oz size gold bar, cost more than $1500. The current gold spot price is about $1,400.
The physical gold bar sells at a percentage higher than the gold price.
That is why I suggest buying the coins. At least the coins are selling at a cheaper rate.
Even the silver bars are selling at much lower price than the physical gold bar.
