For many, the key focus of financial success is active income. After all, we pay for things by working jobs and, hopefully, earning more money over time by being promoted or finding higher-paying jobs that compensate us more for our skill level and the value we offer. But while having a job gives us greater financial stability, it isn’t the main stepping stone to building wealth.

In order to grow our money, we have to actively invest it. This gives us passive income both over the short-term and down the road, making our money work for us. But when it comes to investing, which investment vehicles are the best to put your money into, and how are you supposed to get started?

No matter where you are in your financial journey, let’s take at how to invest $10,000 dollars that can help you achieve the financial stability and growth that you’re looking for!

Best Ways to Invest $10,000

1. Use Your Money to Pay Off Any Debt You Owe

With a nice sum of money in your bank account and a desire to get the ball rolling on growing your wealth, it can be easy to overlook some of the most essential things to take care of when it comes to managing your money more intelligently.

One of the most important things to do when you have enough money to invest is to pay off any lingering debt that you have accumulated up to this point. When debt is allowed to grow, especially when interest is involved, it can impact your credit, your mental health, and your life. Unfortunately, investing is rarely the solution as it leaves you with that debt that counteracts any potential money you are making in various investment opportunities.

Whether you have student loans, mortgage or car loans, payday loans, or any other debts that you’ve yet to completely pay off or are behind on, make sure that you begin to start chipping away at these so that you are caught up or ahead of your financial responsibilities. This way, you no longer have to worry about these items hanging over your head.

2. Consider Investing Your Money Into an Interest-Bearing Bank Account First

Being smart with your money is the key to growing your wealth over time. Although it can be easy to want to invest your money into a high-risk opportunity that may or may not yield great returns, it’s best to start with lower-risk opportunities that will guarantee growth and help you jumpstart your investment journey.

One excellent way to get started is by putting your money into an interest-bearing bank account that will allow your money to appreciate over time. Set aside some time to look for high-yield savings accounts that can truly help you get the most out of your savings effort and make it so that your $10,000 is still available in the event that you need to dip into these savings.

While a savings account may not seem like the most exciting way to invest your money, it helps you grow your money while mitigating the risk of loss that often accompanies other forms of investments. This is especially important if this excess $10,000 could make or break your finances should an emergency crop up in the future.

3. Invest in You or Your Children’s Future

When you’re younger, saving for retirement isn’t typically something that you think about. However, it’s something that we all should be investing in as soon as possible! If you have $10,000 to put somewhere, you could drop it into the 401(k) that you have with your employer or open up a Roth IRA where you can begin investing money yourself.

Of course, it doesn’t have to stop at your future. If you have children who you want to ensure are covered in the future, you may want to consider making investments into their future by taking actions like purchasing a life insurance policy, opening up a savings account for them, or even turning to helpful investment apps like Acorns to start saving money here and there on top of your initial investment.

No matter where you currently are in your financial journey, now is always the perfect time to begin investing in your future and ensuring your financial security later on in life.

4. Take Your Savings Up a Notch With a Certificate of Deposit (CD)

Certificates of deposit, catchily named CDs, are investment opportunities offered by banks that can help you access higher interest rates than those you may find when trying to open up an interest-bearing savings account.

Why? CDs are tools used by banks that incentivize you to save. Then, once you’ve invested your money into these products, the bank can use the funds you’ve invested to lend to others and engage in other financial activities (But don’t worry, you will see your money when you want it back.)

What’s important to know about CDs, however, is that you’ll only earn the full amount laid out by the term of your CD if you invest your money into the CD and leave it alone until the term ends. If you choose to withdraw your money early, you can end up losing some of your interest as well as your principal.

While this is a great investment for those who want a safe investment that offers greater returns than the average bank account (even higher rates for CDs on online banks), it’s important to remember that this only an investment you can benefit from if you’re willing to leave your cash untouched for the full term. Otherwise, you may find the other suggestions on this list a better fit for your needs.

5. Turn to Money Market Funds for a More Diverse Portfolio and Access to Your Cash

As we covered in the previous section, the biggest problem with certain investment tools like CDs is that you can’t access your cash at any point. This can be a major disadvantage for some people who may want to pull out their money and put it in another investment should they find something better for their cash. Fortunately, there are safe investment opportunities like money market funds that will help you access your cash when you need it.

Money market funds are comprised of a wide variety of safe investments like CDs, Banker’s Acceptances, short-term bonds, repurchase agreements, and other low-risk investment instruments that give you the ability to invest and grow your wealth in a somewhat safer manner than, say, mutual funds. Additionally, you can pull out your money at any point in time.

Money market funds don’t often carry as much risk as other alternatives, but it’s important to look around at various options, see what you can expect your returns would be, and determine whether or not it’s worth it for you. Sometimes, safe doesn’t always equate to profitable!

6. Check Out Preferred Stocks

Stocks receive the bulk of attention when it comes to investing. For those reading this guide, you may be pulled towards dividend-paying stocks. But what if there was something safer that would pay out a consistent amount over time? These types of investment opportunities are known as preferred stocks.

Preferred stocks offer you the ability to invest in a company and receive consistent dividend payments, even if the stock market starts underperforming and other types of stocks start paying less than their typical returns. This gives you access to more reliable investment income over time.

However, preferred stocks are not without their risks. Should a company start losing profitability, they could not pay you out at all, and any money they do pay out would go to bondholders, not those holding preferred stocks. Although the likelihood isn’t high that this would happen, it’s something to consider if you’ve found yourself drawn to preferred stocks while doing research on preferred stocks.

7. Invest in an ETF, Index Fund, or Mutual Fund

The stock market offers a host of potential investment opportunities. However, not everyone may be confident enough to learn about the market, do the research, and buy individual stocks that they will have to trade later on. Fortunately, if you’re not comfortable with this process, you don’t have to. Instead, look to solutions like exchange-traded funds (ETF), index funds, and mutual funds.

What Is an ETF?: ETFs are a portfolio of various stock picks that are traded in shares and allow you to diversify your investment portfolio with ease.

What Is an Index Fund?: An index fund comes with more structure, often following a financial index like the S&P 500 to help you invest in the most successful aspects of that index while still giving you the opportunity to diversify your portfolio. 

What Is a Mutual Fund?: A mutual fund is designed to help you invest your money in a pool of securities like stocks and bonds, giving you wider coverage for your portfolio.

If you’re not yet ready to invest in individual securities, consider instruments like an ETF, index fund, mutual fund.

8. See If You Can Make Crypto Work for You

Crypto often gets a bad rap from most investors, but the reality is that it is not always so cut and dry. What is crypto? Crypto, or cryptocurrency, is a digital asset that is either designed to function in a similar manner to an actual currency or to offer some type of support or benefit for users of the cryptocurrency (generally providing value to the blockchain).

The first crypto which has become a household name and recently reached $20,000, Bitcoin, is probably one example of crypto that you’ve heard of. However, there are a wide variety of cryptocurrency options, with more coming out every day. Why are they a potential investment? This is largely due to their volatility, for which price swings can offer large profits if you invest when the cryptocurrency is at a lower price and sell it once the market experiences a boost. You can also mitigate overall risk by exchanging some of your assets for stablecoins, which maintain the same price over time rather than fluctuating with the market.

If this is something that you might be interested in, you can easily get started by creating an account at an exchange like Coinbase. Coinbase provides you with a wide variety of assets to invest in and hold, opportunities to earn free crypto, and interest rates for popular stablecoins and other assets. Who knows? This may become your favorite investing opportunity out of all of these recommendations!

9. Break Away From Traditional Stock Investors and Do It Yourself

Most people feel more comfortable investing their money into ETFs, index funds, and mutual funds. But while these instruments may offer more of the security you’re looking for when investing in the stock market or in similar securities, they don’t’ give you the ability to truly go all-in on your favorite stocks and increase your potential for profitability. This leaves you with another alternative: investing in individual stocks.

It’s important to note that making individual investments in stocks requires a great deal of knowledge of the stock market as well as the individual stocks you plan on purchasing, which means that you’ll want to do your research before you begin putting your money into any stock, regardless of the reputation for the company behind it.

Some of the best platforms to use to purchase stocks are online brokerages like TD Ameritrade and Etrade. Once you have all the knowledge you need to help you make smart investments and a brokerage account to make investing possible, all you have to do is begin picking out your stocks!

10. Use Your Analytical Skills to Make Money With Stock Options

Stock options (not to be confused with futures, which operate in a similar manner) are investments but could be best referred to as betting instruments. Rather than buying a stock outright, stock options give you the ability to say that you will purchase or sell a stock at a later date. However, at the time that you enter this contract, you are speculating as to whether or not the price will rise and fall by the end of the specified date. Play your cards right, and you can end up being able to make money on your speculation.

This investment can be more of a gamble, but if you have a strong grasp of how the stock market works, are closely following your chosen asset and know how to analyze the market to make predictions, and don’t mind betting on assets, this could be something that would be a right fit for your investment money.

11. Purchase Digital Real Estate to Sell at a Later Date

Property has value. Whether it’s a vacant lot or a finished home, we invest in property because it gives us someplace to live or allows us to make money by renting it or selling it to others. But while physical property is well-known as one great way to invest your money, fewer think about digital real estate and the opportunity to make money there as well.

Think of websites as if they were land. In order for someone to start a website of their own, they need a domain name. One way you can invest your money is by purchasing domain names that are most likely to be needed by businesses in the future. Then, all you have to do is set your price, sit on those names (or actively market your inventory), and wait for prospective buyers to approach you to purchase their desired domain name from you.

Of course, domain name flipping can be risky, so one other way to invest your money in digital real estate is to flip websites instead. Flipping a website is more like flipping a home. This means finding an existing website (or building your own) that needs work, taking the necessary steps to fix it up so it brings in consistent traffic and revenue, and selling it to someone who wants to take it over.

If you have digital marketing and web design experience and like tackling projects like these, this may be one great way for you to invest your money instead of going the traditional stock route.

12. Look Into Activities Like Day Trading or Forex

Some people invest as a way to make more money over time. Others, however, actually invest as their day-to-day job, making money through the stock market. If this is more appealing to you (and you have the opportunity to do it part-time or full-time), you could consider becoming a day trader!

Day traders make their money by closely watching markets and making money over time through small trades. As you can imagine this requires much more patience and a watchful eye, but there are plenty of people who can attest to the money they’ve made through this strategy. Another form of trading that has gathered a following is Forex trading. Forex traders make their money by trading currencies on the foreign exchange, earning by making trades as currencies fluctuate.

If either of these appeal to you, do your due diligence to learn how to separate yourself from traders who’ve lost their investments doing these activities and make money engaging in these markets.

13. Consider Investing Further Into Your Current Investments

Some of us may already have investments in our possession without knowing it. For example, major investments you may have already made in the past include purchasing a vehicle or a home. These items, despite being necessities to us, can easily be turned into money-earning opportunities with a few minor tweaks here and there.

If you have extra space on your property, whether it’s on the property itself or in your home, you could invest your money to develop a backyard home or renovate your indoor space to offer an extra place for temporary renters through Airbnb or even on a monthly lease basis. If you plan on selling your property in the future, making an investment to make renovation and improve your home’s value is another great way to spend your money.

This train of thought can extend to other belongings like your car. If you’re in need of a new vehicle, taking the time to fix up the old one so that you can increase its value and make it more valuable to potential buyers can increase the amount of money you make, which will make your future car purchase more affordable.

Remember, chances are that you already have something of value that you can invest further into to make more money. Consider this when looking for ways to spend your $10,000!

14. Invest Time and Money Into Products That Help You Develop a Passive Income Stream

Most investments offer passive income, but rarely are they ones that we put work into. But while hard work is often needed to establish passive income streams, once they’re developed, it’s only a matter of marketing them and allowing the money to continue flowing in. If you’re interested in creating passive income streams to support your main income, how can you get started?

Some excellent passive income ideas that almost anyone can set up for themselves include:

• Writing and self-publishing your own e-books
• Creating online courses on your favorite topics
• Making graphic design artwork for a print-on-demand website
• Creating printables like calendars or journals
• Making your own applications
• Launching a blog
• Starting a vlog
• Selling music or videos

Although many of these ideas are highly creative and rely on you developing a strong reputation as a creator, this can be a great way for some individuals to create something of their own and make recurring income as a result of their efforts. You may even want to turn these passive income products into offerings for a full-time business of your very own.

15. Research Viatical Settlements for Potential Profitability

Although this is a rather morbid recommendation, it is certainly one that may be a viable investment opportunity. One way that people make money is through something known as viatical settlements.

Viatical settlements occur when a third-party purchases a life insurance policy from someone who has a terminal illness or another life-threatening issue. The third-party will then pay a lump sum for their insurance policy that is less than the payout value. Speculating on the time of passing, investors can then make money by cashing out at the end of the life insurance term. Of course, this type of investment comes with its risks, such as not knowing when someone is going to pass and having to maintain the policy throughout the remainder of their lives.

While this type of investment is not for everyone, it is a lesser spoken of investment that may not be for everyone, it can be a way to make money if you’re seeking investment ideas that don’t tend to be as visible as others on this list.

16. Put Your Money Into Alternative Investments for Potentially Greater Returns

Traditional investments represent a large number of the investment categories that we have discussed in the above sections. Beyond that, however, lies alternative investments that often come with higher-risk but can potentially lead to greater returns if your money is invested wisely.

Alternative investments fall outside of traditional investment vehicles like stocks and bonds, with some of these investment types including collectibles like artwork and physical assets like gold or timber. A more comprehensive list of alternative investments include:

• Private equity/debt
• Hedge funds
• Livestock or other animals
• Farmland
• Tax liens
• Rights to water, airspace, fishing, or minerals
• Coins
• Stamps
• Cars
• Franchises
• And so on…

Some of these are more stable than others, but the volatility that can accompany some alternative assets is where the potential to make fast money lies.

If you have $10,000 that you’re willing to experiment with and want to potentially make more money than you would with some of the other assets, consider turning to alternative investments as a way to do so!

17. Use the Money to Start Your Own Business or Side Hustle

The term “investing” can mean a wide variety of things. For most, this word means putting your money into a financial tool that serves to grow it over time. But when it comes to investing, this isn’t the only option you have. One way to put your money to better use is to invest it in your own business or side hustle.

Given the high price of living and the stagnant state of today’s economy as a result of the pandemic, many people may need extra income to help them afford basic necessities and beyond. Using your $10,000 to help you develop another income stream would not only allow you to grow your income but to significantly increase it over time, especially if you find a business idea that is highly scalable and one you can excel at.

As we covered in our recent piece on 50 home-based business ideas, there are plenty of easy businesses that you can set up to start making additional income (or even full-time income if it grows substantially). Some ideas you can start with include:

• Starting a dropshipping business
• Becoming a business consultant
• Offering freelancing services like graphic design or content creation
• Starting a daycare business
• Offering photography or videography services
• Finding an in-demand food business to start like catering or baking
• Starting a coaching business or offering fitness and nutritional instruction

With the right idea, perseverance, and a drive to succeed, that $10,000 can grow into multiple figures per year with the right work ethic!

18. Consider Investing in Yourself and Your Future

Personal and professional investments can be just as valuable as monetary investments, if not more so. However, when considering investing in yourself, it can be hard to find some starting points that would offer you the returns you’re looking for. Fortunately, we can break this down to help you identify some areas of your life that may benefit from an investment. This could include:

• Education: Going back to college or getting a more advanced degree may improve your career and help you earn more money in your current position.
• Professional Skills: Look for online courses or certifications that help you focus on a certain skill you need to cultivate so that you can improve your value as a working professional.
• Personal Needs: Is there something in your life you need that you have yet to purchase for yourself because you may have not had the money? Consider these personal needs and what will ultimately help you lead a better quality of life.

Although these types of investments may not produce upfront returns, investing in yourself is an excellent way to improve your personal life and set yourself up for success in other areas as well. If you’re tight on cash, here is a list of Free Online Courses with Certificates.

19. Turn Your Money Into Passive Income by Investing in Real Estate

Real estate is an alternative investment category, but we’ve decided to include it in a separate section as the number of investment opportunities available offer you a wide variety of ways to grow your money in this industry.

Real estate investments give you the ability to grow your wealth both in the short-term and the long-term. If you want to see gains relatively quickly, one of the best ways to make a profit is by investing in properties, making renovations that will appeal to local homeowners, and flipping them for more than you purchased them. Granted, this can be a bit more costly than the budget limit in this article, but it’s worth looking into for those who are interested in real estate.

Another way you can make money through real estate is by purchasing properties that you can then rent out to families and individuals. Although you will need to think about the upfront investments, legal demands, and the cost of maintaining your property, this is an investment idea that can provide you with continual income as long as you own and rent your property out.

If you’re looking into more traditional investment routes, you may want to consider turning to a Real Estate Investment Trust (REIT), where you can invest in property without taking on the full risk of owning the property itself.

For those who are more well-versed in real estate, this could be an excellent way to spend your money.

20. Try Your Hand at Peer-to-Peer Lending

Peer-to-peer lending is a type of loan opportunity that cuts out banks and allows lenders to provide loans directly to borrowers. This comes with a number of advantages for those who want to loan money to these individuals, such as greater returns (which is often associated with the credit scores of those who typically use peer-to-peer lending platforms), ease of use, and the ability to take on multiple different lenders at a time to help mitigate risk and vary your overall investment.

As you can imagine, this type of investment often comes with some disadvantages as well. Lenders aren’t guaranteed their payments back from borrowers, and there are often ample hoops to jump through if you want to become a lender to these types of individuals. These are some of the risks you will want to consider long before you sign up with a platform and begin offering your capital to others.

Make sure to do your research on peer-to-peer lending to ensure that you understand how it works, what the returns or losses may be, and whether or not you’re eligible to lend your money out before you turn to this type of investment opportunity.

Put Your Money to Use

Spending money can be fun, but finding a way to make it grow can be even better. If you have $10,000 dollars or more to invest, use the 20 excellent ideas listed above to find a way to turn your cash into repeating profit over time!