Top 10 Best Ways to Invest 10k in 2024

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Are you looking for how to invest 10k? You are on the right track. Many successful investors — including Warren Buffet, recommend investments as an excellent way to grow your finances.

It is ideal to start investing with little cash, especially if you are new to the world of investing. However, the more the capital, the more the options. You do not need to bother much about what to do with 10k, as a range of investment options are available.

A single best way to invest 10k does not exist. There are many platforms to invest 10k. But, only a few are adequate to ensure your returns.

You may choose your investments like individual stocks and options trading if you have experience and tolerate risks. However, professionally managed options like Exchange Traded Funds (ETFs) and mutual funds are recommended if you are a beginner.

In this article, we will dive into the juicy details of the best investment options for how to invest $10000 and some helpful tips to invest like a pro.

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Top 7 Conservative Ideas to Invest $10,000

Conservative investments are characterized by their low risk of capital loss. With these options, you can take less risk and learn about investing in the long run. Here are 7 best conservative ways to invest 10k:

1. Index-Based ETFs and Mutual Funds

As one of the most wealthy and successful investors, Warren Buffet suggests choosing individual stocks may not favor everybody, especially beginners. In 2013, Warren Buffet recommended an ETF portfolio with two low-cost index funds. With this portfolio, you can learn about long-term investment faster and benefit in the long run while preserving your capital.

An Index fund is a collection of investments that reflect the actions of other market indices. You are less likely to lose your capital because indices are diversified and low-risk. As a result, many investors recommend index funds as a stable way to begin investing.

On average, indices increase in value over the years (close to 10% a year). Although the returns from an index fund may be relatively low, it is best for beginners.

An index fund is a kind of ETF or mutual fund because they allow you to invest in various assets. Also, index funds offer excellent liquidity, especially the leading ones. Examples of these funds include the S&P 500 is, a popular index (recommended by Buffet), Fidelity Zero Large Cap Index, Dow Jones Industrial, Invesco QQQ Trust ETF, and Wilshire 5000 Total Market Index.

👍 Pros

Less costly and low risk.

Index funds allow your investment to diversify through various markets.

You do not need to be skilled in investing before attempting. This makes index funds perfect for starters.

👎 Cons

There is a limit to your short-term profit as you invest very little in each stock.

2. Get Rid of Debt at High Rates

When you have extra cash, you may be faced with a dilemma on whether you should get rid of your debt or invest it. Debts at high rates (especially on a credit card) should be taken care of as soon as possible. Especially when your investment returns rates are not as high as your debt rates.

Unpaid debts increase with time, so it would be wise to get rid of them. If your debt rates are lower than your investment returns, it may make sense to invest, then pay it off later. However, investments can be unstable, so you will not get steady returns.

So, If you have enough extra cash, you can choose to get rid of your debt and invest. If not, focus on getting rid of your debts with high rates.

3. Robo Advisors

Robo advisors are digital platforms that help you make investment decisions. They use computer algorithms and your investment information to plan your investments. Using an online questionnaire, robo advisors get data such as degree of risk aversion, investment goals, financial status, and desired investment return.

If you are new to investing, robo advisors can aid to build and managing your investment portfolio. Also, they offer services like retirement planning, cutting liabilities, tax optimization, and rebalancing your portfolio.

Robo advisors are automated and require little to no human management, reducing the risk of bias. Also, robo advisors are easy-to-use and low cost compared to traditional advisors.

👍 Pros

Ease of accessibility

Low cost

No emotional investing

Excellent investment plan

Automatic portfolio rebalancing

👎 Cons

Rare human interaction

Limited personalization

Learn about 12 Best Robo-Advisors

4. Research ETF market closely

An exchange-traded fund (ETF) combines mutual funds and conventional stocks features. Like a mutual or index fund, an ETF is a collective investment fund that is professionally managed to bring diversified returns to the investor. However, unlike mutual funds, ETFs can be traded like stocks in the stock exchange market, and their price is affected by demand and supply.

ETF is one good way for a beginner to invest because it is more liquid and less costly than mutual funds. Still, before you venture into investing $10000 on ETFs, consider seeking financial advice or researching the ETF market. This will help you to know when to trade.

In addition to ETF and index funds, other funds can help you invest in gold, real estate, and stocks. These include money market fund, stock fund, open-end fund, e.t.c.

5. Roth IRA Account

One good long-term investment option is to open an IRA account. An IRA account is essential, especially if you do not have a 401(k) retirement plan.

An IRA account helps you save part of your earnings while enjoying tax advantages. This way, you can start saving for retirement in the coming years. Roth IRA is the most preferred type of IRA for investors because it allows you to pay tax now and withdraw your savings tax-free.

On the other hand, a traditional IRA requires you to pay tax on your withdrawals much later. Taxation tends to increase as the years go by; thus, opening a Roth IRA account would make more sense. You can open a Roth IRA account in a bank, brokerage company, or online broker.

As an investor, you can decide to invest financial securities like stocks, ETFs, mutual funds, and bonds in your Roth IRA account. Returns from these investments can accumulate with time till you reach the age of withdrawing your contribution.

👍 Pros

Withdrawals in later years are tax-free

No mandatory withdrawals at a certain age.

Contributions do not require a maximum age limit.

👎 Cons

Low maximum contribution ( contribution limit is $6000 as of 2023 and 2023).

You have to set up and manage a Roth IRA account yourself

Your contributions are taxed

6. Individual Stocks

For a beginner, deciding to invest in individual stocks can be a huge, intimidating step. But, with some level of preparation and the right investment strategies, you can proceed. Before buying stocks of a company, it is crucial to study its market and performance well. By doing this, you can make wise decisions and have higher returns.

Investing in individual stocks is buying a company's shares of ownership. When the company's performance improves, then your shares become more valuable. As a beginner, you can start investing in the stock market by first putting money in an investment account. You can then use this money to invest in stock mutual funds. With time and some brokerage accounts, you can buy shares in your desired company.

7. Bonds

As you gain experience as an investor, including stocks and bonds in your portfolio can increase its diversification. Bonds help reduce potential risks of your portfolio and provide steady income, while stocks may raise your capital.

A bond is a debt or loan obtained from the bond lender by the bond issuer. Companies and government corporations sell their bonds to investors with interest payments.

Bond investing is a relatively safe investment and offers you a predictable stream of income in the long run. But, the bond market is not as transparent as the stock market, and some brokers may extort you.

How to Invest $10,000- Another 3 Ideas

Conservative investments are low-risk but take time to accumulate. To get your profits faster, you may consider venturing into volatile investments. But these alternatives can be high-risk.

1. Copy Trading

Copy trading is ideal for novices as you can copy moves of seasoned investors. Copy trading is favorable for only long-term stocks or funds.

Even as a beginner, you need to have some knowledge on how to trade. This will help you take wiser steps in investing. Copy trading is high-risk because you may lose your capital if the investor you are copying incurs a loss. On the flip side, you may make profits along with the investor.

👍 Pros

Gives you the confidence to invest with limited knowledge of the market

Saves your time

Offers you the opportunity to learn from the best investors

Maximize profits if the investment is successful

👎 Cons

Loss —even by experienced investors—is inevitable.

You may have to pay a commission to the investor you are copying

Whether automated or manual copy trading, You must have 24/7 access to the exchange.

2. High-Return Funds

Funds with high volatility may promise high returns but have high risks. So it would be wiser to go for investments that give the best value for risk—even with low returns.

Exchange-Traded Funds were made for low-cost investment with long-term returns. However, Ark Invest, championed by Cathy Wood, is famous for doubling selected ETFs in the recent year. Some of these ETFs include:

Autonomous Technology & Robotics

ARK Autonomous Technology & Robotics ETF has assets of about $4 billion and is the smallest ETF in the ARK project. Still, it could magnify the $10,000 investment last year into $23,060.

Fintech Innovation

ARK Fintech Innovation ETF is also a small ETF utilized by ARK Investwith roughly $4.5 billion in assets under management. Investors who provided $10,000 into ARK Fintech a year ago now have shares worth $23,410.

ARK Innovation

ARK Innovation ETF is the biggest ARK Invest ETF with roughly $27 billion in assets. Since 2020, Ark Innovation ETF has risen by more than $10 million. Also, investors with $10,000 capital have earned up to $26,000 by the end of the year.

3. Options Trading

An option is a contract that grants you the right to buy or sell a given underlying asset at a predetermined price and fixed period. This asset may be stock, security, commodity, ETF, or index.

You're not obliged to buy or sell the stock when this date comes; instead, you have the option to let the contract expire.

To purchase an options contract, you will pay a premium. Then, you will watch the future prices within the period so that when it is profitable, you can either buy or sell your options. Alternatively, you can decide to let the option contract expire, losing only the premium money.

As a beginner, you can understand options as placing bets on the stock market. Although this type of trading can give you a consistent income, you may lose all your capital.

👍 Pros

Helps you take control of more shares than buying individual stocks

Options offer a magnified return

Gives you time to observe prices

You're not obliged to buy it sell, so you're protected from downside risk

👎 Cons

You can lose all your investment in a short while.

It can get complicated and confusing for you as a beginner. Hence, it may not be suitable.

4 Tips to Invest $10k

1. Portfolio Diversification

Portfolio diversification is important because it can help you recover losses and create a balance in your investment. A diversified portfolio exceeds partaking in different types of investments. You can also invest in different sectors and industries.

2. Asset allocation

Allocating your assets strategically helps you minimize your risk exposure. In general, stocks and bonds are the two basic types of investments. While bonds are low-risk with lower returns, stocks are unstable with high returns. Divide your money between stocks and bonds to balance it out.

3. Understand the financial markets and factors that influence it

As a beginner, understanding the dynamics of the financial market and the factors influencing it is crucial. Financial markets include the stock exchange, bond markets, foreign exchange, interbank markets, and money markets.

Like any other market, financial markets are impacted by demand and supply. External factors influencing these markets include interest rates, tax, and inflation.

4. Rebalance your portfolio at selected periods

Always do a check and rebalance of various assets in your portfolio. Your investment goals should form the basis of your balancing. This evaluation will help you track your investment progress so far. Also, you can assess your financial lifestyle and make sound financial decisions. You may seek a financial advisor to help you do portfolio rebalancing.

How to Invest $10,000 Right Now?

1. Define your goals

The first step on how to invest 10k is to determine your investment goals. For example, you may invest because you want financial independence, retirement, or buying a home. Whether a long or short-term goal, you should decide how you want to achieve them.

Having the end of the goal in mind will help you know the kind of returns to expect. With clear goals, you will make wiser choices on when and where to invest.

2. Determine the amount for investment

There is no precise amount that is required for you to invest. Nevertheless, the more the capital, the more the returns. The amount you decide to invest should be feasible enough to bring tangible returns later. Experts suggest from 10% to 30 % of income should be sufficient for investing.

3. Open an Investment Account

A brokerage account is an investment account you open with a broker. This account function like conventional banks and have benefits for the investor. Creating a brokerage account is one good way to invest 10k because it gives you access to financial markets and other investments. You can transfer money, buy and sell stocks, bonds, and mutual funds. Also, brokerage accounts issue a low commission and are more flexible than retirement accounts. Below is a comparison table of the current biggest brokers:

Broker Best For Minimum Investment Amount Investment Assets IRA Account Robo Advisory

eToro

Copy Trading, Free Stocks Investing

$0

US Stocks, ETFs, Cryptocurrencies, Forex

NO

NO

Start Investing

eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk.

Interactive Brokers

Robo Advisor, IRA account

$0

Stocks, Options, Bonds, Cryptocurrencies, Forex

Yes

Yes

Start Investing

Your capital is at risk.
Via Interactive Brokers' secure website.

eOptions

Options Trading

$500

Stocks, Options

Yes

NO

Start Investing

Your capital is at risk.
Via eOption's secure website.

Coinbase

Cryptocurrencies

$10

Cryptocurrencies

NO

NO

Start Investing

Your capital is at risk.

1. eToro

Open an Account
eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk.

eToro is an investment platform that allows users to trade currencies, commodities, funds, crypto assets, bonds, and stocks. It was founded in 2007 and is widely used in the United States. One unique feature of eToro is that users can utilize copy trading.

2. Interactive Brokers

Open an Account
Your capital is at risk.
Via Interactive Brokers' secure website.

Interactive Brokers is a US brokerage firm founded in 1993. It has an advanced trading platform that aims to provide broad market access improved trade execution at low costs. However, it may be difficult for beginners to use.

3. eOptions

Open an Account
Your capital is at risk.
Via eOption's secure website.

eOptions is an online platform where you can trade securities like stocks, funds, and options and targets low-cost options trading. It was founded in 2007.

4. Coinbase

Open an Account
Your capital is at risk.

Coinbase is a cryptocurrency trading platform that offers a wide variety of tradable cryptocurrencies. Although it is easy to use by beginners, it has high and confusing transaction fees.

Summary

Before beginning your investing journey, you should have a clear financial goal. By doing this, you can decide on the kind of investment to engage in and returns to expect. Opt for conservative investing such as index funds, ETFs, and robo advisors as a beginner. This is because they are more stable and can protect your capital while you learn.

If you can tolerate risks, you can consider choosing high-risk alternatives like copy trading and options trading. These investment options are volatile but tend to bring high returns.

FAQs

What is the smartest way to invest 10k?

The first step you need to take investing is to build your emergency savings find. There are more than enough best ways to invest 10k. Setting up a business and opening a high-yield account are smart choices for a starter. Also, it would be best if you created an investment plan that will suit your financial goals.

How can I get rich with 10k?

Getting rich with 10k needs patience, consistency, and strategy. You will need to be financially intelligent and understand the market to make intelligent choices.

Is 10k a lot to have saved?

Of course. 10k is sufficient to have saved and even begin investing. Nevertheless, learn about the different kinds of investments before you proceed.

What business can you start with 10k?

There are many business ideas that you can set up with 10k. You can start an online business import/export business with even less than $10000.

Team that worked on the article

Oleg Tkachenko
Author and expert at Traders Union

Oleg Tkachenko is an economist-analyst and a risk manager with a practical experience of working in financial institutions for over seven years. Oleg specializes in the analysis of commodities, Forex, stock markets and non-standard investment markets (cryptocurrency, hypes, peer-to-peer lending). He holds a Master’s Degree from the Ukrainian Academy of Banking of the National Bank of Ukraine, Kharkiv Banking Institute. Oleg became an author for Traders Union in 2018; in 2020 he joined the TU’s team of financial experts.

At Traders Union, Oleg is involved in expanded reviews of brokerage companies, and in monitoring the relevancy of the information provided in them. He analyzes trading strategies and indicators, and prepares educational articles on the topic of finance. In addition, Oleg carries out expert research in the Forex and stock markets, and also binary options and cryptocurrency markets. In particular, he checks brokerage companies, studies their performance and growth, tests new services offered by brokers, software and the level of customer support.

Oleg’s motto: Information is a force that opens boundless opportunities, but requires relevancy!

Olga Shendetskaya
Author and editor at Traders Union

Olga Shendetskaya has been a part of the Traders Union team as an author, editor and proofreader since 2017. Since 2020, Shendetskaya has been the assistant chief editor of the website of Traders Union, an international association of traders. She has over 10 years of experience of working with economic and financial texts. In the period of 2017-2020, Olga has worked as a journalist and editor of laftNews news agency, economic and financial news sections. At the moment, Olga is a part of the team of top industry experts involved in creation of educational articles in finance and investment, overseeing their writing and publication on the Traders Union website.

Olga has extensive experience in writing and editing articles about the specifics of working in the Forex market, cryptocurrency market, stock exchanges and also in the segment of financial investment in general. This level of expertise allows Olga to create unique and comprehensive articles, describing complex investment mechanisms in a simple and accessible way for traders of any level.

Olga’s motto: Do well and you’ll be well!

Mirjan Hipolito
Cryptocurrency and stock expert

Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets. Her specialties are daily market news, price predictions, and Initial Coin Offerings (ICO). Mirjan is a cryptocurrency and stock trader. This deep understanding of the finance sector allows her to create informative and engaging content that helps readers easily navigate the complexities of the crypto world.