Friday, June 21, 2024

Investing 10k Like a Pro

What would you do if you somehow came into 10, 000? Would you invest it, blow it, go on a holiday, or enjoy a luxury shopping spree? Well, whatever your answer is, the most valuable and recommended way to spend it is to not really spend it all, but actually invest it!

If you have 10, 000 just hanging around, then it is not only time to begin investing, but also time to use it! However, not everyone has invested before, so you may have one big question. What is the best way to invest 10k?

It may surprise you to know that you will have several great options when it comes to investing and the one you choose really depends on what is best for you. It depends on your preferences, investment experience, and of course your tolerance for risk. Risk tolerance is highly important when it comes to investing as investing can be highly volatile at times.

Determining your tolerance for risk is one of the first things you should know and recognize when investing. If your risk tolerance level is high, it is a good idea to favour choosing your own investments, such as individual stocks. If that is the case, consider a real estate crowdfunding platform such as Fundrise, which will make investing in real estate a breeze.

However, if your tolerance for risks is low and you don’t have a lot or any experience in investing, you should favour more managed options. This includes ETFs (exchange-traded funds) and mutual funds. If you’d prefer not to have anything to do with your investing at all, you can always choose a fully managed option, such as a robo-advisor. This is where the industry leader Betterment can help you with its low-cost and user-friendliness.

How consistent investing can help you

It is human nature that we treat large sums of money a lot different than we treat smaller, monthly amounts of money. When it comes to larger amounts of money, people are more careful and tend to want to be more thoughtful about how they spend it. Using this information, maybe it would be a good idea to begin treating smaller sums of money in a more thoughtful way as well.

When you begin thinking of how to thoughtfully and responsibly handle your smaller amounts of money, you will be surprised about how those small amounts can turn into large amounts. Contrary to popular belief, small decisions made daily can make a huge difference to your overall wealth and personal finance.

Decide on your goal

You can start in any way you want, after all, you’re a responsible adult. However, when you decide on a goal and begin your investing journey with that goal in mind, everything changes. If you want to get the best out of your $10, 000 investment, you need to understand what end result you are hoping to achieve.

If you are leaning towards a short-term goal, it isn’t recommended to invest, instead, look at putting your money into a high yield saving account. However, if you decide that you’re in it for the long run, your investing journey is ready to begin. When you invest your money, it will have the chance to exponentially grow and expand over a longer amount of time.

Emergency Fund

If you don’t already have an emergency fund, now is the perfect time to begin, and if you do, expand it! If your emergency fund it non-existent, that is likely the first thing you should do with your $10, 000. You never know what the future holds for yourself and your family, so having an emergency fund is an essential part of your life.

An emergency fund is liquid, so should you need to draw from it at any time, you are able to. It may not be considered the greatest investment, but it would be far worse if something were to happen and you have nothing to fall back on.

Invest with Betterment

Being an industry leader, it is no surprise that one of the best ways to invest is with Betterment. Betterment is an amazing way to invest in a low-cost, reliable, and user-friendly way. There are no minimum requirements for Betterment, so it is an ideal way to get started.

With Betterment, you will also be walked through the step-by-step investment process in a comfortable and knowledgeable way. Then, when your account is set up, Betterment will rebalance it and reinvest your profits automatically.

Pay off high-interest debt

If you are after a great and guaranteed return, paying off a credit card that charges double-digit interest will do just that! This is an investment that has no risk of going down in value which makes it a reliable option. You will also be saving a small fortune on interest when you pay off your high-interest credit card.

If you want to be able to supercharge your already great investment strategy, it is a great idea to take advantage of zero interest rate balance transfers if that is an option available to you. This is an amazing way to save on interest and help you pay off your debt in a fast and efficient way.

There are plenty of great ways to begin investing, and the options are endless. By the time you have $10, 000 to spend freely, investing is your best option and an even better way to build your wealth.

Claire James
Claire James
Claire is an accounts manager at Fire Digital UK, an online publishing and content marketing company based in the North West.

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