To start an investment right, an investor should not only be searching for a way to maintain and grow their amount but also to stave off inflation and potential losses. If you want to invest 10K and need good investment ideas, there are several you can try. While all investments carry risk, taking calculated risks over time can increase your initial investment amount to double, triple, or beyond.
Here are some investment ideas for 10K that work.
Idea #1: Cover Your Basic Needs First
Before throwing money at the stock market or anywhere else, ensure you have savings to cover 3-6 months’ worth of essentials and that all high-interest debt has been cleared. This is smart money and investment planning.
Idea #2: Don’t Do a Regular Savings Account
Savings accounts work in some cases, but for the most part, banks offer paltry interest rates that struggle to beat the rising cost of living and inflation overall. The value of your money will erode over time if you simply make a deposit into a savings account and forget about it.
Idea #3: Invest In Mortgages
Real estate is smart, but 10K will not buy you a house. The next best thing is to invest in mortgages. Mortgages as an investment vehicle use funds pooled from many private investors to lend out as private mortgages, allowing you to collect interest on what is borrowed.
Investing in mortgages can be done across residential properties, commercial or industrial buildings, and on land containing natural resources. Returns are strong. The buy-in is low. There is nothing to monitor or manage, either. It’s a simple choice.
Idea #4: Start Funding a Retirement Account
If you have neglected to save for retirement or are behind in your retirement savings goals, 10K can generate a lot of interest over the long term while helping you earn yourself a nice retirement decades from now. Consider speaking to a financial advisor about the best retirement account for you.
Idea #5: Overpay Your Mortgage
While you can’t buy a home for 10K, if you already have a mortgage, consider investing 10K. By overpaying your mortgage this way, you can save hundreds, if not thousands, in interest over the long term. You pay off this key investment asset faster and maximize your money.
Idea #6: Invest In Individual Stocks
If you want to delve into the stock market and invest in individual stocks, there is a lot of opportunity here to make money but also a lot of risk. Should you go the route of stock market investing, it will take research and time.
Commit to a minimum of five years in the stock market to ride out market downturns, accrue returns on your investment, and let returns compound. The longer your money stays, the better, assuming you’ve invested in the right places.
Idea #7: Exclusively Target Dividend Stocks
Dividend stocks offer shares you can purchase that will issue you income as dividends, usually in cash and often quarterly. It allows you to earn passive income while maintaining an investment that hopefully accumulates value slowly over time.
For individuals seeking to save their 10K for retirement, dividend stocks are highly valuable, though, as with any type of individual stocks, there are good and bad picks. Search out this type of investment from companies with a decent track record that promises steady dividends.
Idea #8: Invest In Mutual Funds, ETFs, And Index Funds
Mutual funds, exchange-traded funds, and index funds are collections of individual stocks sold as a single investment asset. Investing in an ETF or mutual fund instantly diversifies your investment over a potentially long list of commodities, stocks, bonds, and assets.
This reduces risk and does not require active management to yield a return, although this assumes you have researched and put your money in strong-performing mutual funds, ETFs, or index funds.
Idea #9: Invest In Bonds – Corporate and Government
Bonds offer long-term growth potential with varying risk profiles. Bonds can be purchased through a bank, credit union, or online exchange. While there are government bonds issued and insured by the Canadian government, there are also corporate bonds which companies use to raise capital quickly while, in turn, repaying their investors with the equivalent of quarterly, bi-annual, or annual dividends. Bonds are less volatile than stocks, offer excellent liquidity, and can help you diversify your investment assets.
Idea #10: Invest In Commodities
Commodities encompass many investment assets, from coffee and cocoa to oil, natural gas, and precious metals like gold and silver. Though highly volatile, investing in commodities, stocks, and bonds does not guide their prices. They’re an excellent instrument to battle against inflation and expose you to various industries.