Why Do We Prepare “Smartest Ways to Invest $10,000: Help You to Make More Money”?
How to find the smartest ways to invest? The answer is in this article. You’ve $10,000 and wondering what to do with that? Well, you can invest it. Yes, it’s possible. In fact, most financial advisors have investment minimums. What if you’re a newbie in the investing world? Where do you begin?
Yes, there’re options to invest as low as $10,000. And few of them are quite nifty too.
But, you should know more than just some places for investing. You must adopt some best investing practices. I’ll explain those methods along the way as well.
Barbara Corcoran, Warren Buffett and other billionaires and millionaires weren’t just lucky to become successful. They made sound investment decisions all through their career. You can learn a lot from these people and their choices.
Of course, there aren’t any guarantees. You can’t be 100% sure of becoming rich with these investments. However, we hope you can make more money, get rich and become a millionaire! Still, as per experienced people, below are five best things to do with your money.
Smartest Ways to Invest $10,000 and Make Money
Let’s take your pile of cash and learn how to invest your $10,000 in the best ways possible. We hope these smartest ways to invest can help you make more money, get rich and become a millionaire!
Smartest Way 1: Choose Your Investments Through an Online Platform
If you’re the DIY types and have investing knowledge, you should pick your investments. You can do this with the help of an online trading platform. Scottrade is one such medium.
When we reviewed Scottrade, we found it to be very user-friendly. Also, it has excellent tools for portfolio development. I’ve made accounts of Motif, TradeKing, TD Ameritrade and E-Trade as well. But, we like the customer service of Scottrade the best.
There are several other discount brokers too. So, you must spend some time researching about them. Only after thorough research should you decide the right broker for you. You may even use this guide to pick the best online platform.
Tip: If you pick your investments for your $10,000, you should try selecting ETFs. Exchange-traded funds are famous for their diversification merits and low costs.
Smartest Way 2: Lend and Earn Interest
If you wish to invest in others and get some interest, you can do peer-to-peer lending. This is a new craze these days which is both reasonable and exciting.
Peer-to-peer loaning involves lending to people via an online service. This platform brings lenders and borrowers together.
Lending Club is an example of peer-to-peer loaning service. We tried this platform and found it to be reliable and simple to use.
With Lending Club, you can automatically invest using your investment criteria. Or, you can also invest manually by searching available loans and choosing the ones that interest you. It’s your call!
Tip: like all investments, ensure choosing notes which reflect your risk tolerance. Specific notes are riskier than others. Thankfully, you get this info at Lending Club’s site.
Smartest Way 3: Use Help of a Robo-Advisor to Manage Your Money
So, you lack the skills of investing in yourself. You’re also reluctant to lend money to someone online. In such case, you may want to hire a robo-advisor.
Robo-advisors are investment firms. These companies make automated software developed to manage portfolios on different criteria. E.g., you may take a survey while signing up for this service. The study involves questions to identify your investment goals or risk tolerance.
Robo-advisors allow investment management for the masses. This is because they have an almost negligible account limit.
Plus, various robo-advisors have a smooth user interface. It helps you obtain necessary info about the investment performance and holdings.
Jon Stein, CEO of Betterment, is an excellent robo-advisor. It grew from scratch to $3 billion-dollar investment firm in less than four years. Jon says the markets mirror the success of the worldwide economy. He expects the market to improve in some time. Betterment’s software reflects this view. This is set-it-and-forget-it kind of investing.
Tip: If you’re willing to get a detailed financial plan, collaborate with a financial planner. Or, if you have a strategy in place, use a robo-advisor. It’s worth a try.
Smartest Way 4: Invest in Your Children’s Higher Education
All parents want their kids to become successful. Getting admission in a good college is one such road to success.
But, it’s not so easy. Can you tell why? Because colleges are very costly and there’s no sign of any slowdown. Mike Patton, Forbes contributor, says that college education fee has increased by 5.2% in the past two decades.
If you plan on sending your children to college and you don’t make enough money, start saving.
The 529 College Saving scheme is a good option. It has tax benefits which encourage people to save for higher studies. Such plans are state sponsored. So, do check your state’s program and see if it works for you.
$10,000 is a good start in any of such schemes. Depositing your money in these plans can get you the technical details of the account all simplified. This way you can continue investing. E.g., the fear of unknown may hold you back. Starting to save for college today will prepare you mentally to invest tomorrow.
Tip: It’s smart to start investing for your kids’ higher studies as early as possible. The timeline for college is usually short: maximum of 18 years. If you start when your kids are older, you’ve lesser time. We can’t stress more… start now. Grab all the time you can.
Smartest Way 5: Pay Your Debt
For you, this may be a surprising investment strategy. But, ponder over it…
Having debt is the opposite of investing. The difference is that holding a debt is costly while investments reap a profit.
E.g., you may expect a return of 7-8% in the stock market. Whereas, with credit cards, you may pay in double digits.
Thus, paying your debts is a good investment idea. What you’re investing into is not paying copious amounts of interest.
This is the reason why many financial advisors advise paying your non-mortgage debt before retiring. It is so important.
Plus, $10,000 may make a massive hole in your debt. But, if it’s unable to wipe it out, focus on paying your debt as early as possible.
Tip: Organize your liabilities. You can organize your debts from lowest to highest. Or you can do it at the lowest interest rate to highest rate. The former is more rational from a behavioural perspective. It will give you early wins while you’ll save the most money from the latter. If you still hold a decent credit, then take out a zero percent balance transfer credit card. This will lower your interest for 12-18 months when you pay it.
Smartest Way 6: Begin a Roth IRA
The Roth IRA is among my most preferred investment vehicles.
Why do you ask? Because you get a tax benefit on the money, you draw from the scheme during retirement. In other plans, you get a tax benefit when you deposit the money in. This means you get tax-free money. It’s a great thing for many. Another reason is you gain significant control over your money. This is an added benefit to Roth IRA in comparison to the employer-sponsored retirement plan.
Those are two main reasons for starting a Roth IRA. But, do remember the first reason you must start one: it’s critical to save for your retirement.
You’ll not get pay-checks from the employer post-retirement. No inflow of money. None at all. This is obvious. But, let it absorb for a minute. You’ll have to depend on other sources of income to spend the rest of your life comfortably.
Tip: Research some of the ideal places to open a Roth IRA. Start it today. You’ll not regret it.
Smartest Way 7: Diversification Helps
One of the biggest mistakes people make is not diversifying their money. Don’t be like these people. Be smart and diversify your money.
And yes, you can also and must diversify your $10,000. ETFs are a good option for diversification. They don’t cost much and also ensure you’re not on the single-share roller coaster.
You may be wondering, “But Jeff, it’s just $10,000. Should we not buy some shares?”
Well, you can, but you won’t be forming a strong base for your future investing decisions. Handle your money smartly even if it’s a small amount. Practice today for tomorrow.
Tip: As you create your portfolio with time, ensure rebalancing it. Because some investments in the portfolio will fall and rise in value. Don’t ever be under or over-weighed in any area. Learn everything about diversification. Stick to the best practices.
Smartest Way 8: Invest in Familiar Companies
Don’t ever invest in a business you don’t or can’t understand. This is when you are investing in the stock market. These words of wisdom are of investing legend and self-made billionaire Warren Buffett.
Choose industries and businesses you’ve some knowledge. Because risk arises from being unaware of what you’re into.
Smartest Way 9: Improve Your Wardrobe
When Barbara Corcoran, real estate queen, rented her first apartment, she got a check of $360. Want to know what she did with it? Well, she spent it all on a new coat. She says, “it was the best thing we could’ve done because we felt powerful in it.”
Corcoran, now seen on ABC’s “Shark Tank,” had something in her mind. As research tells, when people wear better clothes, they accomplish more.
Smartest Way 10: Buy a Home
Self-made millionaire David Bach suggest buying a home. The personal finance expert calls it a staircase to wealth.
In fact, if millennials don’t get a home, they’re unlikely to have any wealth in this nation. The average homeowner is 38 times richer than a person who lives on rent.
Smartest Way 11: Invest in Yourself
Grant Cardone is another self-made millionaire. He says, “the best investment is in yourself.” Doing so helped him get debt-free, and create five businesses. He earned his multi-million-dollar empire through this.
Cardone listened to self-improvement tapes and saw sales-training videos. This was his way of self-investment. But, it can be anything for different people. Be it attending a conference, or enrolling in the class.
When you invest in yourself, it’s a win-win deal. You’ll always get a return. No-one can take that from you. It’s only yours.
Smartest Way 12: Invest in Nurturing Relations
Relationships are the best and most affordable investments you can make.
Take the time to know people. Especially your peers and team and what drives them. This is very crucial as Bill Belichick, New England Patriots coach points out.
“There are many things which impact what happened on the field,” he says. Players have girlfriends and wives. Some of them have babies. And they also face personal situations. They’ve parents who may be sick. All this goes together.”
Thanks for taking the time to go through this article. You know what this means? It means you are concerned about spending your money wisely.
$10,000 may not be a lot of money. But if you start on the correct path now, you’ll reap several rewards in future.
This one small act of investing $10,000 can grow into years of interest. It will also build up your wise financial choices.
And, remember the strength of compound interest. Exponential growth in money is incredible. You must take benefit of this as early as possible.
While there’re many ways to spend your $10,000, ensure that you do it. Research investing? But don’t become crazy in evaluating all the options in the universe. Make a rational, yet appropriate selection. You don’t want to end up investing anything due to information overload.
Sow today to reap good results tomorrow.
What is your thought on these smartest ways to invest? We hope this article can help to make more money, get rich and become a millionaire! Please feel free to share your comment with us.