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How to Invest $10,000 The Smart Way

Would you like to invest your spare change? Then use Acorns. Acorns rounds up all of your debit and credit card purchases to the nearest dollar and invest the change.

If you manage to save $10,000, you need to make sure that money works hard for you. Whether you want to pay off debt or save for a down payment on a mortgage loan, there are plenty of smart ways to invest 10,000 dollars. One of the best way to invest 10000 dollars is to pay off your credit card debts.

Here are smart and best ways to invest 10,000 dollars.


1. Define Your Goal.

The first step in deciding the best way to invest 10000 dollars is to figure out your goals. You need to know whether you want to invest your money in high risk investments like stocks or low risk investments like bonds or savings account.

Investing in stocks can grow that $10000 significantly, but it is not without risks. You need to need to check your risk tolerance.

If you decide you want to invest in stock, check out our investing for beginners article to see if you’re ready to invest in stocks.

Click here to open an investment account with Ally Invest.

2. Pay Off Your Debt.

If you have credit card debts, use that $10,000 to pay them off. Credit cards charge a higher interest rate than other forms of credit. So it makes sense to pay them off first.

After paying off your debts, keep monitoring your credit report and credit score for any error or suspicious activities.

One way to get the best mortgage rates is to compare mortgage rates online. LendingTree is a great place to start. They offer a great comparison platform to give you the best mortgage rates.

3. Retirement Savings.

A smart investment you can make with $10000 is to open a retirement savings. If you have a retirement savings account, whether it’s a Roth IRA or traditional IRA, using your $10,000 will not only boost your savings but will also help you retire early.

That money is locked away until you retire. So you will reap a lot of benefits of compounding interests over time.

Use the Retirement Calculator to see how much money you need to save for retirement.

See: 9 Easy and Painless Ways to Save for Retirement.

Retirement Calculator: How Much Do You need to Retire.

4. Create an Emergency Fund.

One of the best way to invest 10000 dollars is to create an emergency fund.

Indeed, putting $10,000 in an emergency fund will give you some peace of mind when an emergency arises. This extra cash in your account could help if you are temporarily unemployed, if you need major repair to your home, etc.

How much money you need to save in that emergency savings depends on your monthly expenses. The rule of thumb is to have at least 3 to 6 months worth of monthly expenses in that account.

A better place to put your emergency savings is in a high interest savings account. That way you can earn a higher interest rate along the way.

See: How to Build Your Emergency Fund on a Low Income.

5. Pay Off Your Mortgage

Paying off your mortgage is one of the best way to invest 10000 dollars. $10,000 is a lot of money that can, not only significantly reduce the time you have to pay off your mortgage, but also can significantly lower your monthly interests.

See: Top Tips to Get the Best Mortgage Rates.


Work with the Right Financial Advisor

You can talk to a financial advisor who can review your finances and help you save 100k (whether you need it to pay off debt, to invest, to buy a house, or plan for retirement, saving, etc). Find one who meets your needs with SmartAsset’s free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals, get started now.

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