Do you remember the first time you wrote a check for $100?
The first $100 check I wrote was for my cell phone waaayyy back in 1997. Whoa….that brings back memories. At that point, it hadn’t even occurred to me to invest the 100 dollars – I was just happy to have my cell phone!
What about your first $100 check? Or your first $1,000 check? I bet you weren’t wondering how to invest $1,000 dollars then, were you? Even better, your first $10,000 check?
The first time I wrote a check for $10,000 was to pay off my student loan debt. That was, by far, the best check I ever wrote! For me the choice was clear, but where to put an extra $10k isn’t always an easy decision. I’m here to help!
By far the quickest and easiest way to set up a diversified portfolio of stocks with $10,000 is through Robinhood – our top investing pick.
Here are 15 great ideas on how to smartly invest $10,000.
Top 15 Best Ways to Invest $10k in 2021
- High Yield Savings or CD
- Auto-Pilot Investing
- Peer to Peer Lending
- Real Estate
- DIY Stock Market
- Motif Investing
- Coaching Program
- Professional Designation/Certification
- Go Back to School
- Online Courses
- Start a Business
- Start a Blog
- Launch a Podcast
- Resell Products on Amazon FBA
- Pay Off Debt
1. Invest in a High Yielding Savings Account or CDs
If you want to be completely safe, you can invest the money in high-yielding CDs or a high-interest savings account. These days the best rates are coming from online banks.
For example, CIT Bank offers its Savings Builder Account. You can open an account with a minimum of $100, and secure an APY of up to 0.95%.
Online banks have all of the advantages of traditional banks, including a debit card and ATM access.
Your deposits are covered by FDIC insurance up to $250,000. And you have all of the benefits of dealing with a reputable bank because that’s exactly what these online banks are.
2. Auto-Pilot Investing
If you want to put your money into a virtual autopilot situation, a robo-advisor may be exactly what you’re looking for.
M1 Finance is a brokerage where you can invest in stock and ETFs for no fees. This gives them the largest number of no-fee stocks and ETFs of any brokerage online.
What puts them in the Robo-Advisor category is that they have pre-made and managed portfolios where you can invest your money, still with no fees, automatically. You can also create your own auto investments, making M1 Finance one of the more versatile ways to auto-invest.
What is Betterment? It’s an online investment management platform, often referred to as a robo advisor, because everything is handled automatically for you. Investment selection, asset allocation, rebalancing, tax loss harvesting – it’s all done for you, and at very reasonable fees.
For example, the annual management fees just 0.35% – or $35 – on an account up to $10,000. And it drops to 0.25% when you exceed $10,000, all the way down to 0.15% when you reach $100,000.
$10k won’t buy you much in the way of diversification with individual stocks, but it will be plenty with Betterment.
3. Peer to Peer Lending
If you prefer fixed income investments to equities, peer-to-peer lending offers an opportunity to earn interest rates that are well above average. What these sites do is bring lenders (investors) together with borrowers, to create an open lending environment that cuts out the banks, and their high rates and restrictions.
This results in what is often more flexible loan terms for borrowers, and much higher interest rates for investors than what they can get on even long-term certificates of deposit.
There are various peer-to-peer lending sites on the web already, and more seem to be coming up all the time. But the best established of the lot is Lending Club. Some people who invest on the platform are reporting double-digit interest rate returns.
There is some risk to investing on peer-to-peer sites, but if your interest rates are high enough, you’ll have the ability to cover those risks, and still come out well ahead of more traditional fixed-income investments. I spoke with Lending Club and their recommendation was to start off with at least a $2,500 investment.
Since you can invest as little as $25 in a single loan, this gives you the ability to diversify into 100 different loans and bring your risk level down greatly. Get a full explanation of how to use peer to peer investing in my Lending Club reviews for borrowers and investors.
4. Real Estate
Real estate is an excellent investment, no doubt about it. But $10,000 isn’t enough to make a down payment on the purchase of an investment property these days, not in most markets (unless your my buddy that’s mastered buying real estate with no money down). But that doesn’t mean that you can’t invest in real estate.
One way to do it through real estate investment trusts (REITs). These investments have several advantages over owning property outright, including:
- High liquidity – you can buy and sell shares in REITs much the same way you trade stocks
- Diversification – REITs represent a portfolio of commercial properties or mortgages, rather than in a single piece of property or mortgage
- High income – the dividends paid by REITs are usually well above the dividend yields on stocks, and in a different stratosphere compared to certificates of deposit
- Tax advantages – REITs don’t sell properties nearly as frequently as mutual funds sell stocks; the net result is much lower capital gains
- You don’t have to get your hands dirty – anyone who has ever owned an investment property can appreciate this advantage
There are plenty of REITs to choose from out there. The internet has made it extremely simple to get started in REITs.
One of the most popular is Fundrise. If you want to get investing in real estate, Fundrise is hands-down the easiest way to do it.
They walk you through the application process and then allow you to browse through all of the possible investments you can put your money in.
They have a $500 minimum investment, which is the smallest you’ll find. With just $500, you can get use their Starter Portfolio. With this portfolio, your money will be put into several REITs. It’s a great way to get instant diversification.
One of the key benefits of using Fundrise is the low fees. Most investors pay 0.30 to 0.50 in their invested capital in fees every year. This is a great way to invest your money without your returns being eaten by fees.
If you prefer to own property, you can consider pooling your $10,000 with one or more other investors, and buying an investment property outright.
5. DIY Stock Market
Most people seem to prefer to invest their money in mutual funds, particularly when it’s a relatively small amount of money. But if you’ve been showing real ability to make money trading stocks on your own, this might be an opportunity to take that up to the next level.
You can open an online discount brokerage account through companies like Etrade and TD Ameritrade. These platforms have all the tools that you need to become a sophisticated investor – including educational resources if you need it.
And, the low fees are a godsend when you’re trading individual stocks. If you are interested in taking the next step with an online brokerage see our list of the best online brokerage accounts for all types of investors.
6. Build Your Own Motif
Speaking of mutual funds, if you’re looking for a different kind of fund – like really different – check out an investment platform called Motif. This is a platform where investors come to create very unique funds, or motifs. You can invest in some out-of-the-box motifs, such as rising interest rates, solar energy in China, or a looming natural gas glut.
With a minimum of $250 and for a fee of $9.95, you can even build your own custom motif investment with up to 30 individual stocks, based on whatever investment niche interests you, and whatever stocks you put into it.
7. Coaching Programs
When we think of investing, we generally think of putting money into assets with the hope of getting a return on the investment. But the best investment that you can make are the kinds that you make in yourself. Anything that you can do to improve your knowledge and skills – that will either enable you to live better, or to earn more money – is a true investment.
One of the ways to do this is to put some of your money into coaching programs. This is especially valuable if you are about to take on a new venture, but don’t have much in the way of relevant experience.
If you can sign-up for a coaching program with someone who is actually doing what it is you would like to enter, it will save you a lot of time, effort, and money. As the saying goes, never try to reinvent the wheel.
There are different coaching programs covering just about any area you can think of. And while we’re on the topic, check out my Strategic Coaching program to see what it can do for you. I absolutely love it!
8. Getting a Designation
This is another example of investing in yourself. Whatever your career is, you should be looking to add any necessary designations for your field. They can raise your visibility, your credibility, and the willingness of customers and clients to do business with you.
I acquired my certification as a CFP®, or Certified Financial Planner, and it enabled me to launch an entirely new and rewarding career. Find out what certifications represent the top of your field, and invest some money getting a designation for yourself.
9. Going Back to School
If you feel that your career is stagnating, and a lot of people do these days, going back to school could be the best investment of time and money that you ever make. $10,000 won’t get you a graduate degree at a name university, but it could cover much or even most of the cost of getting an Associates degree at your local community college.
This money could present the perfect opportunity to retool into a new career and one that is a lot more relevant in today’s economy. According to the National Association of Colleges and Employers’ 2019 Job Outlook survey, US employers plan to hire over 16% more class of 2019 grads than they did 2018 grads. NACE’s data suggests that 2019 holds the most promising hiring outlook for new college grads in over 10 years.
10. Online Courses
If the idea of returning to school to get a new degree doesn’t appeal to you, or if you are at a point in your life where it’s simply too inconvenient, you should look into taking online courses. There are all kinds of courses available that can help you move into a new career or business.
11. Starting Your Own Business
This is yet another example of investing in yourself. By starting your own business, you put yourself in a position to take maximum advantage of your knowledge, skills and abilities. That increases the likelihood of your earning a high income.
Leaving my old brokerage firm and starting my own financial planning practice ranks as one of the best business decisions I’ve made. It definitely had its scary moments, but the rewards have been amazing.
Thanks to the Internet, it’s very possible to start your own business with just a few thousand dollars. Heck, I started this blog for less than $500! Choose the business that you want to go into, study how you can market the business through the Internet, then come up with a business plan. $10,000 should be more than enough to get started with. In fact, you better not start out with more than a $5,000 investment for an online business. There are plenty of ways to start a home-based business that require very little up front capital.
One more point in starting a business. When you put money into a given investment, you’re doing so with the idea that it will be worth more money in the future. But when you have a business, it can provide you with an income for the rest of your life. That’s more valuable than just about any other investment that you can make.
12. Starting a Blog
This can be a winning idea on so many levels, and you probably won’t need anywhere near $10,000 to make it happen. Choose a broad topic area – careers, technology, finance, investments, real estate, or just about anything your interested in and have at least above average knowledge – and build a blog around it.
That’s what I did with my blog. As a financial planner it’s been easy for me to tackle personal finance and financial planning related articles on an ongoing basis.
My wife had a different beginning with her blog. It started as a way to document our growing family, but after she realized she could make extra money blogging she started focusing on things that she was passionate about: motherhood, fashion, home decor and our pending adoption. I’m still in amazement at how often her home tour page has been shared on Pinterest – over 1 million times!
The idea is to create a website with valuable content that will draw visitors to it. And as it grows, you will have opportunities to monetize it through advertising, affiliate arrangements (essentially, selling other peoples products), or as a platform to sell your own products and services from.
This could be a way of building a side business, rather than taking the plunge into a full-time venture. You can do it as a sideline until you are ready to ramp it up to full-time. And you can move at whatever pace is comfortable for you. But once you get going, a blog can be an incredible source of new and exciting opportunities – as well as income.
13. Launching a Podcast
Podcasts are basically blog articles set to audio. But they have the advantage that they can also be placed on other websites for greater exposure. And just as is the case with a blog, there are ways that you can monetize podcasts.
The simplest way is to do a series of podcasts and solicit listener donations. This can work beautifully if you have a loyal following. You can also get advertising sponsors, in much the same way that you would for a blog, who would pay for a mention in your podcast, or on the site where the podcast appears.
John Lee Dumas from the top rated podcast on iTunes has made a name for himself with is podcast, Entrepreneur on Fire. John launched his podcast in 2012 and since then has made almost $3 million in revenue! The best part is that he publishes his super highly detailed income reports monthly for those that want to chart his progress. In the beginning, much of his revenue was from advertisers and since then he has offered various courses and products for those interested in monetizing their products. This man is truly on fire! 🙂
14. Resell Products on Amazon FBA
If you have a talent for finding bargains, but have never had the inclination to sell some of those bargains for profit, Amazon FBA is probably the most hassle-free way to do it.
FBA stands for Fulfillment by Amazon, and that’s exactly what they offer. You deliver the items you want to sell to Amazon, and then market them on the site. Once they have been sold – in the usual way that sales take place on Amazon – the company will handle the shipping for you. It’s one of the easiest ways to run an online business.
15. Pay Off Debt
This is the most risk-free way to invest $10,000 – or any amount of money – and it provides a virtually guaranteed rate of return.
Let’s say that you have a credit card with an outstanding balance of $10,000, that has an annual interest rate charge of 19.99%. By paying off the credit card, you will not only get rid of the debt permanently, but you will also lock in what is effectively a 19.99% return on your money.
No, it won’t mean that you’ll be collecting a 19.99% rate of interest as a cash income on your money, but it will mean that you are no longer paying it – which is virtually the same thing.
Here’s another plus: the 19.99% that you will earn on your money (by not having to pay it out every year) is income that you will not have to pay any tax on. If you were receiving 19.99% on $10,000 directly, a large chunk of the income would have to go to pay income taxes every year.
The Bottom Line
With inflation, $10,000 may not seem like a lot of money these days, but it’s plenty if you want to get into some interesting and imaginative investments.
You can use them as an opportunity to grow your nest egg into something much, much larger. It’s even enough for you get into three or four of these investment ideas, which will give you an opportunity to really grow your money.
Give a couple of these a try and see if they’ll work for you!