How to Invest Your First $1,000: Smart Strategies for Beginners

You’ve saved your money and now you want to learn how to invest $1,000. Where do you start?

If you’re new to investing, it’s likely that you may not know what to do next.

The truth is that maybe, no one in your life has taught you how to invest well, or that no one in your family has been successful with investing up until this point.

You can join our extended family of Rule #1 investors and learn from our “Uncle” Warren Buffett and "Uncle" Ben Graham, who are incredibly successful.

Investing isn’t about jumping in wherever with $1,000. It’s not about saving more to jump in with. It’s about finding something that you love and you understand to buy. Learning to invest takes a bit of time, but the rewards are well worth it.

Before you do anything with your first $1,000, it's essential to invest in yourself first—specifically in your investing education. It's not about the amount you start with, but the strategy and knowledge you bring to the table. Warren Buffett, Guy Spier, and Mohnish Pabrai have all emphasized the value of education over capital. So don’t jump in blindly—start by reading Buffett’s shareholder letters, Guy Spier’s Education of a Value Investor, and Mohnish Pabrai’s The Dhandho Investor to build a foundation of Rule #1 investing principles.

In this video I’ll cover how to invest $1,000, alternative places to invest, and small investment ideas...

How to Invest $1,000 Dollars

Remember, just as Warren Buffett says: 

“Risk comes from not knowing what you are doing.” - Warren Buffett

If you're starting with just $1,000, I suggest that your approach might be slightly more aggressive—but not reckless. Because small amounts can be replaced more easily, it allows room to take calculated risks on undervalued companies with high upside potential. As your account grows, you’ll shift into more conservative margin-of-safety investing. The strategy stays the same, but your level of caution increases as your capital increases.

Now I’d love to hear from you: “Have you held yourself back from beginning to invest because of fear? Fear of either losing money or not having enough money to make real profits?”

Did you know that the financial services industry is making millions off of letting you believe these lies?

Avoid paying your money manager huge fees by learning how to pick quality stocks and invest like the experts do. Download my 5-Step Checklist for Picking Stocks!

Investing your first $1,000 is a powerful step toward financial freedom—but only if you do it wisely. By following the Rule #1 approach and building your investing education first, you give yourself the best shot at long-term success. Whether you're working with $1,000 or $100,000, the core principles remain the same: understand the business, make sure it has a moat, trust the management, and only buy when it's on sale. Your journey to becoming a confident investor starts now—one smart move at a time.

**Editor’s Note (Updated April 2025): This article was originally published in 2016 and has been significantly updated in 2025 to reflect current examples and Rule #1 investing insights.