Asked on 09 Sep 2019
I'm a student looking to make some passive income.
It depends on your risk appetite and time horizon. It also depends on your liquidity needs.
If you really want passive income, bank savings and bond funds are available. But the returns are relatively low.
Frankly, you will be better off in a globally diversified portfolio if you can afford to invest without the need for liquidity for the next 1 - 3 years.
A little contrary to other other responses here, but this is what I like to advocate:
Form a conviction in a stock, and make a small position in it.
It will not make you rich, but it will:
Accelerate your learning curve - because you are putting skin in the game, you are likely to learn all you can about the stock, even though it's your first time.
Because now you have dipped your toes in, the material you read (be it books/annual reports/analyst reports) will be more relevant. You will look for certain data points.
You will also learn the emotional aspect of investing. Monitor how you reach when the stock dips/rises. How often do you check on the price? What is your own investment timeline? All these observations about yourself will help you learn.
Hope this helps, and hope you get started on your investing journey!
Top Contributor (Jan)
My recommendation is to wait.
A 10% return on $1k is just 100 bucks. That's not even a $10/mth return. And it's something you can earn in a few hours on a Saturday.
And to try and achieve a 10% return means exposing your capital to some risk.
I'd much rather you use that $1k to go for a course and pick up a skill someone would pay for. Like digital marketing, or coding, or video editing. You can easily make a $100/hr with some of these skills.
You can invest in dividend-paying stocks or REITs if you understand how stocks and REITS works and how to value it.
Otherwise, you can use $1000 to learn from others who are successful in making passive income.
You are not going to make any serious passive income with 1000 dollars.
However, you should still get started with investing. Reason being once you have 'skin in the game', it would put in the right mindset. You can start to train yourself to think like an investor. More importantly, when there is a market downturn, you see how you yourself would react and adjust accordingly.
You can't exactly do the above if you do not get started.
Consider robo advisory. It is 'good' for beginners since you would require more of a hands-on approach.
On a side note, I am starting a financial blog. Do check it out.