There are many ways to spend $10,000. You could pay off your student debt, buy a car, go on vacation, or treat yourself to a luxury watch, among others! Want our advice, though?
Trust us, you can generate exceptional wealth over time if you learn how to invest your money wisely. Heck, even a $5 daily investment could turn you into a multi-millionaire over 50 years. Imagine what you could do with $10,000!
Exciting, huh? But the tricky part is identifying the best ways to invest 10,000 dollars. After all, you might know nothing about the world of investing, feel wary of stocks and shares, and have a head full of horror stories about risky investments gone wrong!
Want some help with the decision? You’re in the right place. Keep reading to discover 6 great ways to invest $10,000.
1. Start an Emergency Fund
If you don’t already have an emergency fund, then now’s the time to start one! Think of it as saving for a rainy day. Unexpected expenses can strike at any moment, which makes it super important to have access to cash when you need it.
Now, most people wouldn’t define this isn’t an ‘investment’, per se. But think about the alternative for a second. What would happen if your car broke down, or you lost your job, or your boiler broke, and you didn’t have an emergency fund to fall back on?
Many people in this situation are forced to take out expensive short-term loans. In worst-case scenarios, sky-high interest rates and penalties for missed payments can cause those debts to spiral out of control. You could avoid that miserable fate by putting some (or all) of your $10,000 into a high-yield savings account.
2. Real Estate
Real estate’s the first thing most people think about when it comes to making a ‘sensible investment’. And for good reason! It’s a physical asset that’s well-known to deliver great returns over time.
The bad news is that, regardless of where you live in America, $10,000 is unlikely to be enough for a down payment on a house. But don’t despair! Real estate investment trusts (REITs, for short) provide a way to invest in real estate without actually owning your own property outright.
A REIT is a company that has its own portfolio of income-generating properties. You can buy (and sell) shares in the company, thereby getting a stake in their real estate while never having to engage in the typical responsibilities of property ownership.
3. Start Your Own Business
Do you have an entrepreneurial spirit and a fledgling idea that you’d love to turn into a business? Well, the $10,000 in your bank account could be enough to bring it to fruition! Using your own money to fund your start-up is a fantastic way to invest in yourself and back your vision without having to seek outside investment.
Now, the rate of new business failure is high enough to make this a riskier way to spend your money. But fortune favors the brave, right? If your start-up succeeds, then you can expect an astronomic return on your initial $10,000 investment.
4. Invest in Your Personal Development
With limited funds at your disposal, investing in your own personal development is arguably the most lucrative use of your money. The returns might not be as tangible as you’d get from something like dividend-paying stocks. Yet that doesn’t make them any less valuable!
That online course could help you land a future job with an exceptional salary. Your round-the-world trip could lead to important self-discoveries that channel you down a path of genuine happiness. The international conference you attended could help you make connections that benefit your business, or open doors to other opportunities.
…You get the idea! It doesn’t matter whether you’re buying books, courses, tickets to conferences, or sessions with a life coach. Spending your $10,000 on yourself could deliver the biggest returns of all.
5. Experiment With Alternatives
Alternative investments involve putting your money in asset classes other than cash, bonds, and stocks. Some common examples include hedge funds, venture capital, derivatives, art/antiques, and even rare bottles of wine; many people in the industry also consider real estate an alternative investment. Whatever you decide to buy, investing in alternatives is another first-rate way to invest your $10,000.
Nevertheless, there are definite pros and cons involved, so be sure to do further research. For example, these investments tend to be less liquid in nature, which means you don’t have to worry as much about excessive transaction costs. By the same token, they can be harder to both sell and assign value to in the first place.
6. Pay Down Your Debts
You could also think about paying down any debt you’ve accrued over time. Now, this might not sound like the best way to invest your money! But it serves a practical purpose:
Remember, any interest you’re paying on the debt can cancel out the returns on your investments! Repay the lenders, then, and that’ll no longer be an issue.
Using your $10,000 to repay your debts could also improve your credit score. And that, in turn, will open the door to better interest rates on future loans, thereby saving you money down the line.
Remember the Best Ways to Invest 10,000 Dollars
$10,000 is an exciting amount of money to have in your account. Rather than spending it on frivolous things, though, we recommend investing it. Why?
Because you can watch your wealth increase over time instead of dwindling! With any luck, these suggestions on the best ways to invest 10,000 dollars will help you do exactly that. Keep them in mind and you’re sure to end up in a better financial situation than the one you’re in right now.
Investing of any kind is an amazing way to make your money work for you. However, there are plenty of other methods available that have the same effect! To discover some of them, search ‘money’ on the website now.