How to Invest 10k – 9 Best Ways

While keeping your money in a traditional savings account might generate interest, nothing compares to investing the money for potentially huge returns on investment. There’s no justification for not investing your money in stocks, cryptocurrency, and real estate if you intend to grow as a savvy investor.

You can try many investment ideas with as little as 10K to get decent returns at the end of the investment tenure. If you have the money handy, sit back and read through some of the best ways to invest a $10,000 capital in 2022.

Should You Invest Your 10K?

Given the number of things you can do with $10,000, people might think investing it isn’t worthwhile. Why invest your 10k when you can keep it in savings or a retirement account for future use?

Granted, putting the money in a savings account helps ensure that you have enough to cover costs like rents, utilities  or acquiring expensive items. However, doing that won’t give you returns on your money or help you build sustainable wealth over time. Investing the money is the only sure way to good returns. 

While there’s no doubt that investing can be pretty risky, it’s imperative to know that these risks are the sacrifices of the juicy end products of a successful investment. Also, investment schemes like index funds or REITs (Real Estate Investment Trusts) enables you to invest your money without actively managing the property. These investment avenues make it easier and less risky.

Is 10K a Good Investment Amount?

Generally, 10K is decent if you invest in the right places. You can diversify the investment into different mediums with different strategies for more successful investment returns. 

Such an amount would be a decent fit for long-term investments, but you can also look at some of your short-term options.

Top Ways to Invest 10k

With 10k, you have lots of investment options that can fetch you good money in the long run. You can put your money in the stock market and invest in real estate. You can start flipping homes too or other affordable real estate money-making opportunities. 

While we won’t crown any of the options above as the best way to invest 10k, we’ve curated a list of other best mediums to invest your $10,000 for maximum profit. They include:

1. Invest in Real Estate

When you’re investing up to 10k, real estate comes as a natural part of your investment options. There’s been a flurry about real estate investing, but the major limiting factor to real estate is capital. The good news is,, having  $10,000 is a good place to start. 

If you’re on the lookout for how to invest in real estate with 10K, the following are some real estate investment opportunities to consider if you have a $10,000 capital:

• REITs

A Real Estate Investment Trust (REIT) is a company that owns, operates, or finances income-generating real estate. You can buy stocks for this type of company which will allow you to generate profit from your investment as well! 

A major advantage of opting for this investment scheme is that it requires less effort than other real estate investments. With great potential for passive income, it’s one of the best ways to invest 10K in real estate.

• Real Estate Syndications

Syndication is an investment idea perfect for beginners.  It’s a type of fundspool where many investors put their money together (mostly capital) to purchase property that might be too expensive if they tried buying it individually.

A syndicator, rather than the individual investors, is responsible for managing the investment property. This syndicator is accountable for setting up the investment, sourcing investors, finding a property, collecting mutual funds, and distributing investment returns.

Real estate syndications are similar to real estate investment trusts, but structural differences exist. While syndication entails a group of individuals with similar investment goals, REIT is a managed company, and investors are more shareholders than partners.

• Invest in a Below Value Rental Property

An innovative way to invest 10,000 in real estate is to get a low-value rental property. Simply source for a house that costs less than $100,000 and use the money as the down payment for the property. After making the down payment, you can use the property for anything that generates a sure ROI.

• Turn Your Space Into an Airbnb

Turning your space into an Airbnb might be a perfect idea if you want to control your investment. All you need to get started is a free space in your home, an attic, room, or basement.

Take some of your funds and beautify the space to make it attractive to prospective tenants. If possible, buy new furniture and accessories to enhance its beauty and bring it to rental standards. Go to Airbnb and sign up, hire a professional photographer to take quality pictures of your home, and upload them to your account. Create an attractive description alongside the images.

Completing this process will put the property on the market for bookings, and you can generate decent rental income. The good thing about this investment type is that you can rent out bigger spaces if they are available. Consider reading and understanding the regulations guiding owning Airbnb rentals in your area to avoid legal issues.

2. Put the Money in High Yield Savings Accounts

If you’re unsure of what to do with 10K, putting your money in a high yield savings account is a smart way to invest your cash. Leaving money in a high yield savings account with decent interest rates, can get you returns without involving yourself in any active real estate investment.

All you need to kick-start this investment medium is to open an online savings account and deposit the money. Depending on the financial institution, you’re subject to different interest rates, and a bank that offers a 2% Annual Percentage Yield is pretty decent.

While a high yield savings account has a low risk, it also drives less ROI than investing your money in real estate. In this “no risk, no reward” isn’t a mere saying.

3. Mutual Funds and Exchange Traded Funds

A mutual fund is a program that involves pooling resources from different investors to invest in securities like bonds, stocks, or short-term bonds. The combined holdings of a mutual fund are called a portfolio, and a portfolio manager is responsible for managing the investment.

Getting started in mutual funds requires you to invest the minimum investment amount, usually around $3,000. Portfolio managers might charge load fees, which can be from one to three percent of your investment. While there’s a chance that you’ll gain by investing in a single mutual fund, your 10k capital allows for more than that.

On the other hand, exchange-traded funds are index-based, implying that they’re built to track a particular index. Getting started with ETFs is pretty simple because there’s no minimum investment amount, unlike mutual funds. The low trading fees let you  save more money on your investments.

4. Open a Self-Directed Brokerage Account

A self-directed brokerage account lets you manage your investments. The account mainly allows you to trade stocks and bonds, but you can also use it for REITs, ETFs, or mutual funds. Signing up with a brokerage isn’t free as they’ll charge commissions for their services, usually a fair price.

Before signing up with any brokerage, check around to ensure you’re making the best decision. Since you’re responsible for choosing the best investment options  there’s always a chance that you’ll lose money if you’re not careful, hence, making your background research necessary.

5. Individual Stocks

Buying stocks is one of the most practical and profitable ways to invest 10k in a business. When you purchase stocks, you’re buying part of the business  which is  essentially the same as betting on the company’s growth.

You can purchase individual stocks from a trustworthy stock brokerage firm if you have an account with any. Investors who want a different but lucrative alternative to real estate investment should try their hands on the stock market.

Investing in the stock market offers you reduced fees as you don’t have to pay annual management fees. Commissions are only applicable when you purchase or sell your stocks.

6. Start Your Business

If you’re new to investing and still on the lookout for where to invest 10K, this could be a way to familiarize yourself with the basics. While this may not sound like your regular investment idea, it’s an excellent way to develop yourself and utilize your potential. Starting a business puts you in control of your money.

The internet has made everything more effortless than it used to be. With proper marketing and a few thousand dollars, you can generate insane ROI with a $10,000 capital. Compared to other investment mediums, creating your own business is one of the quickest ways to generate profit.

Starting a business might not be the best way to invest 10K, but it’s undoubtedly a way to get decent returns on investment within a fairly short period of time. 

7. Invest With Robo-Advisors

A Robo advisor works digitally by collecting your financial information and using them to make the best investment decisions on your behalf. If you’re looking for a way to invest 10k without dealing with the daily hassles of management, using a Robo advisor is your best bet.

A Robo advisor helps you set up and manage a business portfolio when you sign up with them. Additionally, they may provide tax breaks to help you minimize the impact of taxes on your investment. You can start investing with most Robo advisors with as little as 1K.

A critical reason for their growth in the industry is that they charge lesser fees than a human investment advisor. Furthermore, you can sign up with a robotic advisor with zero amount while human advisors request a considerable amount as their consultation fees.

With all these pros also comes the challenging part. Robo advisors are computers, so they’re  prone to mistakes. If you let the wrong one handle your investments, there’s a good chance that you’ll be losing lots of money.

8. US Treasuries

It may sound boring, but investing in US treasuries is an excellent way to store and invest your cash simultaneously. Treasuries are government debts, and they include treasury notes, treasury bills, treasury bonds, and treasury inflation-protected securities (TIPS).

9. Max Out an IRA

An independent retirement account is similar to 401K, only that your company doesn’t make matching contributions. The two types of retirement accounts include Traditional IRA and Roth IRA.

With a traditional retirement account, you get tax deductions based on your contributions in the current tax year. On the other hand, a Roth IRA lets you withdraw your money without paying any income tax. There’s no better one of the two depending on the scenario, as they may both be appropriate.

Tips for Investing 10K

It isn’t easy to crown the best way to invest 10K because of numerous fantastic investment ideas. Whether you invest money in mutual funds or real estate, here are some handy tips to help you navigate your investment journey better.

• Formulate a Plan

Investing in real estate is like a chess game, hence plan every move adequately to ensure that you don’t jeopardize things at critical moments. The key is to have a realistic goal and formulate a plan that ultimately takes you to the objective. It’s essential to decide how much you wish to invest and weigh your risk tolerance at this stage.

Furthermore, it’s essential to stick to your plan; many investors tend to derail from their initial plan due to the trends that they see in the market. Doing that will make you try to catch on to mere facades, making you lose money in the long run. However, don’t rule out making necessary positive modifications to your investments.

If you’re stuck in the middle of a significant decision, you can get valuable investment advice from other investors, necessitating the importance of networking. To simplify the investment process without actively managing all of your investments, you can buy into an investment scheme that doesn’t require hands-on management.

• Diversify your Investments

Regardless of where you eventually invested your 10k, it’d help not to put all your eggs in one basket. Any problem with that sector spells doom to your investment when you invest in one sector. However, with diversification, you can rest assured that all your assets can’t come crashing down at once.

• Reinvest

When you profit from an investment, always think of a way to reinvest to earn even more profits. Reinvesting the gains from your investment will increase your returns in the long term, even if you lose in some of your investments.

• Reassess Your Investments

While it’s essential to reinvest, don’t always reinvest blindly, especially when you’ve lost from a particular investment. It’s also crucial to review your investment decisions for loopholes that might be causing their downfall. 

When you notice some mistakes,  be extra careful not to repeat them, and you’ll always boast of a profitable investment portfolio.

Conclusion

No one’s perfect, so a constant yearning for knowledge is one quality every investor needs to improve on their investing journey. One of the best ways to gain indispensable knowledge that will keep you in total control of your investment is experience.

Alternatively, you can invest your money in a scheme that doesn’t require excessive knowledge or experience. Hopefully, you’ve learned all you need to know on how to invest 10K to get huge profits, regardless of your background or knowledge level.

As the article recommends, real estate is one of the most profitable ways to invest $10,000. If you’ve decided to walk the path, Ardor Homes Massachusetts is always available to lend you a hand. With a trusted team of agents ready to broker your home purchase or sale, working with us is a great way to ensure the security of your investment.

Steph Wilkinson

In her 25-year career, Steph Wilkinson has been involved in the acquisition, marketing and sales of over $3 Billion dollars of residential real estate. A number of years ago, Steph transitioned into Brokerage Leadership for National real estate brands and tech start-ups. She has served as a Business Strategist for real estate agents and brokerages alike and is also a real estate coach and trainer. In her new role with the Iconic Team, Steph will be responsible for the growth of the team and will be working with all of our agents to increase their productivity and bottom line.