The best ways to invest $10,000

If you’ve got $10,000, then we have the smartest and most popular ideas on how to invest this sum in the most lucrative way in 2019

The best ways to invest $10,000

The best ways to invest $10,000. Source: shutterstock.com

Just imagine you’ve got $10,000 and you’ve paid off your mortgage, so you have no special plans for this sum. There are a lot of options at this point. You can opt for shopping, buy a second-hand car, or just invest it. The latter option is a wise choice. Yes, you win some you lose some, and this rule applies to this situation. However, if you have a solid strategy, you can accomplish your investing process in the most lucrative way.

The more you have, the higher your chances are to build up the capital. Anyway, if you have less than $10,000, we have a solid guide on how to invest a small sum ($100 and more).

Preparation process

Here’s what you have to understand before starting to invest: do you have a debt? If you need to fix your situation, this is how you can do it:

  • Fix a debt situation
The best ways to invest $10,000

Here’s what you have to understand before starting to invest: do you have a debt? Source: shutterstock.com

Normally, paying debts is not a thing that is associated with investing. Nevertheless, it can become a part of the strategy. If you start investing with debt (especially when you are a newbie), it can become tricky.

In other words, if your investments have a high rate of return, then it is reasonable to start investing with a debt. Otherwise, you’ll keep losing money.

Investment options

Let’s consider you are ready to invest.

The first thing you should remember is that investing is always about risks. You have to understand the risks, and be ready for them. There are different types of risk. We’ll not list them all, but you have to acknowledge some of them.

Market risk is the major one. The worst thing about it is that you can’t affect it, hence you have no control over it. You should also consider a business risk. It depends on a particular company you’ve invested in. The next one is a liquidity risk (it’s all in the name). Political risk is not the most influential one, but it has to be considered as well. The investment market, as well as large corporations, can be closely connected with political events and decisions.

1. Invest in Stocks

The best ways to invest $10,000

You can use an E*TRADE brokerage account. Source: shutterstock.com

Since we are living in the 21st century, there is no need for us to use the help of stockbrokers and other old-school services. Trading stocks requires just an internet connection and a desire to sort out the investment market. You can use an E*TRADE brokerage account, for example. Just make sure there is a user-friendly interface, so you can understand everything you see, and you can really feel it.

Go through all the options. Check all the companies and stay informed of all the latest news and updates related to the investment market if you want to accomplish your investment plan right. Yes, you heard it right – THE PLAN. If you wonder why you need this, then we’ll tell you. You unconditionally need the plan to make it right. You’ll also need to determine which sum you are ready to invest in a particular company. Furthermore, it is important to work out the acceptable threshold sum that you can afford to lose. This sum will not affect your financial situation.

When you have a handle on investing in stocks, create a plan. Set the amount you want to invest. Also, know the threshold for the amount you can lose.

2. Mutual Funds

Here we have a little different situation. Such things as mutual funds or ETF offer diversification. Thus, you can invest in a particular company, and your funds will be diversified between stocks/bonds, or other investment options.

3. Bonds

If you purchase a bond, it means you buy a debt. Basically, investing in bonds is similar to investing in stocks.

The best ways to invest $10,000

Bonds are more predictable than stocks. Source: shutterstock.com

However, bonds are more predictable than stocks.

There are three major types of bonds:

  • Corporate, which are offered by corporations looking to raise capital
  • Municipal, which are issued by towns, cities and states to fund public projects
  • Treasury, or T-bonds, which can be purchased directly from the U.S. government

Anyway, you should remember that investing in bonds is also a risky option. We mean you can never guess. For instance, when interest rates rise, bond prices fall. Thus, if you sell bonds before they are high enough in value, you can lose money (if they cost less than the initial price).

4. Robo Advisor

Basically, we are talking about automated advisors. This software will work for you once you set it up.

The best ways to invest $10,000

It is easy to manage your account when you use a robo advisor. Source: shutterstock.com

Besides, it is easy to manage your account when you use a robo advisor. You’ll also be able to use the help of financial experts.

5. Peer-to-peer (P2P) lending

This option is good when it comes to situations where you don’t opt for dealing with a financial institution. In this case, you play the role of a lender. In other words, a P2P platform connects you with borrowers from the entire globe.

So, in a nutshell, P2P is about a high rate of return and lower risks. Normally, you have to pay an origination/closing fees to use a P2P platform (some of the services have also an annual fee).

If you are interested in this option, then you should know that Lending Club and Prosper are the most popular P2P platforms to date.

SEE ALSO: Top 5 ways you can invest in esports

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