$10,000 is a lot of money for most people. It’s also a good amount of money for investment.
However, there is no point in injecting the money into one scheme or another just for the sake of it. After all, you want maximum returns under tolerable risks. Ultimately, investing for beginner traders, as well as seasoned professionals, can be unpredictable at best. So, the question is, what are some of the best ways to go about it?
1. Real Estate
Real estate is one of the oldest investment options and it’s popular even today. While 10k is barely enough to make a down payment on a decent property in most markets, it’s not to say that there aren’t other options.
Real Estate Investment Trusts (REITs) allow you to invest in properties even when the amount is small. This is because you are one of the many investors and earn a share of the income produced by commercial real estate that’s owned by you and them.
You also enjoy the following benefits which are unavailable when you actually buy properties:
- No need to deal with paperwork and bureaucracy
- Buying and selling of REIT shares is as simple and flexible as stocks
- Since the properties aren’t resold frequently, the capital gains are low and tax advantages high
2. Peer to Peer (P2P) Lending
Peer to Peer lending aka P2P lending is a product of new-age banking industry which allows borrowers and lenders to contact each other across websites and apps in a mutually-beneficial arrangement.
The former gets to avail flexible loans with easier repayment terms, and the latter are able to earn a lot more than traditional investment options thanks to high-interest rates that are levied on personal loans.
There are various P2P platforms where you can sign up as an investor or lender and start offering loans to individuals and small businesses across the country.
However, make sure that the platform you pick is trustworthy and has a proven track record so that you are able to get your returns on time and in full.
3. Health Savings Account (HSA)
Health Savings Accounts (HSA) are available to families and individuals who have high deductible health plans. You get health benefits and also many tax benefits such as deductible allowance for the investment made in HSA.
You can invest in an HSA so that your money rests in the account and grows without tax deductions, and you can withdraw at any point when you need to cover healthcare expenses.
4. Debt Clearance
Debt, no matter what kind, is never good for you. It only attracts interest and hurts your credit score.
So, if you have pending credit card bills, debt from a personal loan or car loan, etc. then you can use your 10k to clean the slate and become debt-free.
However, know that some banks levy a prepayment fine if you clear a loan ahead of the term’s end.
It is good to have a clear understanding of the difference between debt and equity.
5. Emergency Fund
Life is unpredictable and you can never take chances with your career or business. If for any reason, you lose either of these at a point, then it can become quite challenging to run your household and pay the bills.
Since finding a new job and rebuilding a business takes time, you need an emergency fund to tap into to survive this kind of tough period.
Setting aside $10,000 as an emergency fund might not be exactly an investment, however, it will one of the best placements for your money in the long-term.
6. Set up a Blog
You don’t have to have excellent writing skills to start a blog. If you have money, you can hire a professional to design a website, and a freelance writer or two to create the content.
With $10,000, you can create a top-quality blog in any niche and monetize it after it reaches a certain level of popularity to earn a passive income.
There are various ways to earn money from a successful blog. You can publish digital ads, get into affiliate marketing to earn commission by selling select products, become an influencer in the blogosphere, etc.
7. Certification/Upskilling Course
One of the best investments that you can ever make in life is in yourself. If you are able to extend your skillset or improve the skills that you already have through online courses and certifications, then you can take your career or business to the next level and ultimately increase your income. For instance, there is a slew of comprehensive digital marketing courses that you can apply for.
These programs are in huge demand in today’s market and can certainly help in your career. You can also look for other courses like Adobe Photoshop (if your work involves graphic design), social media marketing, website building, etc.
8. Online Store
If you have time and interest in starting your own business, then you can easily set up an online store with $10,000. You can either take help from a professional website developer or use online tools like BigCommerce, Shopify, etc. to launch a store yourself.
There are also a variety of tools for other tasks like marketing, branding, etc. that are affordable but can help your business become successful. Naturally, you also have many choices in the kind of products you want to sell- clothing, accessories, electronics, home décor pieces, etc.
9. Home Fixing
Here is something that a lot of people forget- your home is also an investment. Its value increases with time (at least in most cases) and if you decide to sell it in the future, then you can get a handsome return on the investment.
However, if the property has become old and outdated, then its value may decrease.
Spending money on your home’s makeover can easily be one of the best decisions of your life. Installing new roof, windows, doors, etc. will not only make your house more secure and beautiful but will also increase its market value which is a big plus from an investment’s point of view.
10. Small Businesses
If you have a friend or relative who is starting a new business, then you can invest your money in that through equity. If you believe in the business idea and it becomes a success after launch, then your equity can grow in value over time and provide a massive return on the investment.
So, there you have it—some of the best ways to invest $10,000 for high returns and long-term benefits. It’s true that not every option may work for you, but there will be at least one that suits your requirements. Good luck!