Money to spend - But what engine???

Hi all,

The time has come when the ol' 1200 is not enough for me. I drive a 1200 Bug (1970), stock everything at the mo. The pocket contains about a grand to get me started - what do I do?
other type of engine? modified bug engine? - I need some ideas!

I will consider going water cooled also, so any help you can give would be great. - Thanks!