There you are with $1,000, wondering what do with it, and thinking everyone else in the world should have your problems. In reality, $1,000 may not be a lot of money, but after asking local financial advisors how best to invest it there were some surprisingly common opinions. Notably, these recommendations were the same—whether the amount was $1,000 or $100,000.
The expert advice came from professionals at UBS Wealth Management in Roseville, Gilbert Associates, Inc. in Folsom, and Weston & Tuttle Wealth Advisors, LLC in Cameron Park. Their suggestions all fell into two categories: what you should do first, and what you might do next. Initially, solidify the foundation of your “financial house.” To build this foundation:

• Create a rainy day fund. Build up a savings account capable of covering your income and expenses for 3-6 months. This is your emergency fund to tide you over if you suddenly find yourself out of work.
• Get out of consumer debt. Pay off high-interest credit cards that are slowly killing your ability to save.
• Max out your retirement contributions. Kick money into your 401K program at work every month, especially if your employer provides any kind of matching contribution—unless you don’t like free money! Take advantage of that employer match by contributing the maximum amount you can. If you’re already maxing your work 401K, you can start a separate Individual Retirement Account (IRA) and give the $1,000 a good home there.
• Think about college. According to a CNBC report, babies born today will pay between $40,000 and $125,000 per year in college tuition. That $1,000 can be a good start to a college-savings program. 

Once those pillars of a financial foundation are set, start looking at investments. Since investment strategies are as unique as the individuals who have them, no financial advisor worth their salt will tell you how to invest money without first talking about your goals, comfort level with risk, current economic position, etc. That said, a very generic approach to investing would allocate the money three ways:

• 40 percent for dividend paying stocks which, (hopefully) not only go up in value, but add to your income on a regular basis.
• 40 percent into something that pays interest, such as an interest-bearing bond. These are relatively low-risk options that can yield around a 4-5 percent return if you’re willing to leave the money alone for a while.   
• 20 percent into “alternative investments.” These are generally anything not correlated to Wall Street products, like real estate or oil wells—anything that adds a little spice to the portfolio but doesn’t leave too big of a welt on your finances if it gets wiped out.

The bottom line (pun intended) is to be sure you create a thoughtful financial plan. Once that’s in place, how to invest $1,000, or any windfall, can become an easy decision, and one that takes you another step closer to financial freedom.