How to Invest With $10,000 or Less
Investing $10,000 may seem like a piece of cake, but there are many smart options these days. Decide what you want, and then make your money work for you.
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Instructions
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Set goals. If you are saving for retirement, your strategy will be different from the strategy you might use to save for a house or a car.
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Pay off high-interest debt. No matter what your goal is, limit credit-card debt as much as possible.
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Maximize your 401(k) plan contributions, assuming your employer offers one and that your goal is retirement.
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Invest in a tax-deductible Individual Retirement Account or Keogh plan, again assuming your goal is retirement.
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Put part of the money - if your goal is nearer-term than retirement - into an aggressive-growth mutual fund. The investment will help you increase your savings for a car or home.
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Put a part of the money in a money-market account, where you can earn interest but not be penalized for withdrawal.
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Consider starting a business on the side. If you can create a steady source of income, you will have something to fall back on if you lose your job; meanwhile, you can invest the earnings from the second job.
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Tips & Warnings
Diversify. Avoid putting all the money in one investment. You can spread the risk by investing in mutual funds or a variety of individual investments.
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Comments
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Aug 08, 2006
If you are interested in long-term gains, take about 10-20% of your investment and place it in an index fund. These are managed funds which do not place their stake on a few stocks, but rather the whole market. An example is an index fund that follows the growth of the S & P 500. This way, you are guaranteed to make money in the long run. Despite the fact that the market may crash, historically it has always rebounded. If you placed money in an index fund in 1900, despite the Great Depression and Black Monday (in 1987), you still would have made 7% (inflation-adjusted) per year. Indexing is a safe bet. Make sure to choose a fund with low expenses. And, most importantly, once you put your money in the fund, do not touch it. -
Nov 22, 2005
Invest 25 percent in a CD with an annual return between 6 and 7 percent. This is low risk and a low return. Invest 5 percent in government-issued bonds with a 20 year maturity life. This is low risk and low return. Invest 10 percent in a foreign markets mutual fund. Investing in foreign markets is very risky, but the return can be very appealing. I've seen returns as high as 90 percent annually. Invest 30 percent in a growth mutual fund. This is a moderate risk with a moderate return (usually around 5 to 15 percent). Invest the last 30 percent in mid or high cap stocks, through a stockbroker. With this diverse portfolio, the chances of you losing money are very low, and the chances for making money are very good.
