Smart Strategies for Investing $10,000

89

Remember the first time you wrote a check for $100? Mine was to pay for my cell phone back in 1997. It never dawned on me to invest that $100 – I just wanted my phone! How about you? Did it cross your mind to invest your first $1,000 check? Or your first $10,000 check? My first $10,000 check went to paying off my student loans, and that was the best decision I ever made. Picking an investment for $10K isn’t always straightforward, so I’m here to help!

If you’re after short-term investments, we’ve got ideas for those. And if you have more to invest, check out the best ways to invest $20K!

Here’s a look at some options:

1. High-Yield Savings Account or CDs: For a safe bet, put your money in high-yield CDs or a high-interest savings account, like CIT Bank’s Savings Builder Account offering up to 4.05% APY with a $100 minimum deposit. Another good option is Save Better, which currently pays 5.51% without a minimum deposit. These accounts offer FDIC insurance up to $250,000 and come with the flexibility and security of dealing with an established bank.

2. Auto-Pilot Investing: Want a hands-off approach? Try robo-advisors like M1 Finance or Betterment. M1 Finance offers commission-free investing in stocks and ETFs and lets you create your own auto investments. Betterment manages everything for you, including investment selection and tax-loss harvesting, at reasonable fees.

3. Real Estate: With $10K, you can invest in Real Estate Investment Trusts (REITs) instead of purchasing property outright. REITs offer high liquidity, diversification, high income from dividends, and tax advantages. Platforms like Fundrise let you start with as little as $500 and invest in a diversified real estate portfolio.

4. Buy Bitcoin: Interested in cryptocurrency? Now might be a good time to dip your toes in Bitcoin, especially if you’ve been waiting for the right moment. Use a crypto exchange like Coinbase to start your investment.

5. DIY Stock Market: If you’ve got a knack for stock trading, consider opening an online discount brokerage account with companies like E*Trade or TD Ameritrade. They provide all the tools and educational resources to help you become a savvy investor.

6. Your Home: Home values have surged in recent years. Investing in a remodel or adding square footage can significantly increase your home’s value if you’re looking to sell or refinance.

7. Inflation Hedge: With concerns about inflation, consider investing in Series I Savings Bonds, issued by the US Treasury, which offer protection from inflation. You can purchase these bonds directly from Treasurydirect.gov.

8. Coaching Programs: Invest in yourself by signing up for coaching programs to enhance your skills or knowledge, especially if you’re starting a new venture.

9. Getting a Designation: Earning a professional designation can boost your career. Find out which certifications are valuable in your field and pursue them.

10. Going Back to School: If your career feels stagnant, $10K can cover much of the cost of an associate degree at a community college, offering a chance to retool your career.

11. Online Courses: If a full-time return to school isn’t feasible, online courses can help you transition into a new career or business.

12. Starting Your Own Business: Use your $10K to start a business, leveraging your skills and knowledge to earn more. The internet makes it possible to start a business with minimal upfront costs.

13. Starting a Blog: A blog can be a great way to share your interests and knowledge, potentially turning into a profitable side business.

14. Launching a Podcast: Similar to a blog but in audio format, podcasts can be monetized through listener donations or advertising sponsors.

15. Resell Products on Amazon FBA: If you find great bargains, Amazon FBA lets you easily sell products without handling shipping logistics.

16. Your Old Hobby: Sports Cards: Dust off those old sports cards. The market has surged, and some collectibles are fetching high prices.

17. Pay Off Debt: The safest investment is paying off high-interest debt, effectively earning you a return equal to the interest rate on the debt, like 19.99% on a credit card balance.

The Bottom Line – Investing $10,000

While $10K might not seem like a lot, it’s enough to grow significantly with the right investments. You can diversify into several of these options and see substantial growth.

FAQ’s on Investing $10,000

How should I invest $10K in 2023?
You could consider buying stocks, bonds, mutual funds, ETFs, or real estate, or saving in a high-yield account. Consult with a financial advisor for personalized advice.

Is $10K enough to start investing?
Yes, $10K can be a substantial start for investing in mutual funds, stocks, real estate, or ETFs. Always seek advice from a financial advisor before investing.

How much interest will I earn on $10K?
Your earnings depend on the type of investment. Savings bonds at 4% yield less than a dividend stock portfolio averaging 11%, but stocks come with higher risk.

How to Invest $10,000: Step-by-step Guide

1. Determine Your Investing Goals: Understand what you aim to achieve.
2. Identify Your Risk Tolerance: Know how much risk you can handle.
3. Choose Your Investments: Decide based on your goals and comfort level.
4. Create a Diversified Portfolio: Spread your money across various asset types.
5. Consider Dollar-cost Averaging: Invest fixed amounts regularly to avoid market timing risks.
6. Be Patient: Stick to your plan despite market fluctuations.
7. Review Your Portfolio: Monitor regularly with a long-term perspective.

Take your time and make informed decisions to achieve your financial goals.