7 Ways to Invest $10,000

Many Americans start investing for retirement through their first full-time job. As a result, their investments grow gradually. However, $10,000 can give a helpful jolt to your portfolio, whether you started investing last week or you’re close to retirement. There is an abundance of profitable assets you can invest $10,000 in today, depending on your goals, that can all lead to growth for your portfolio and overall wealth. Here are seven common ways to invest $10,000 to help that money grow.

If you have $10,000 to invest, a financial advisor can help you create a financial plan for the future.

1. Max Out Your IRA

If you have an individual retirement account (IRA), you can deposit a portion of your $10,000 into your account. This hefty contribution will make excellent progress toward your retirement goal. Because federal regulations limit contributions to your IRA, you’ll have money left over. For instance, deposits to your account in 2025 max out at $7,000 for the year or $8,000 if you’re age 50 or older.

When maxing out your IRA, you’ll need to decide between a Traditional or Roth account. Traditional IRAs offer tax deductions now but require you to pay taxes when you withdraw in retirement. Roth IRAs, conversely, use after-tax dollars but provide tax-free growth and withdrawals in retirement. Your current income and anticipated future tax bracket should guide this decision, as each option offers distinct advantages depending on your financial situation.

Choosing this route will leave you with $2,000 to $3,000. You can invest the remainder in the options below, or you may find one of those options as a better fit for you.

2. Contribution to a 401(k)

If your employer offers a 401(k) retirement plan, you could deposit the money into this account. Specifically, it’s an excellent idea to contribute enough to your 401(k) to receive the full amount of matching funds from your employer. For instance, your job might match contributions equal to 5% of your paycheck.

Therefore, contributing this amount scores you free investment money. However, 401(k)s generally give less flexibility and control of your investments, so it’s wise to invest more of your money into other investment accounts once you max out your matching funds.

For 2025, employees could invest a maximum of $23,500 (and an additional $7,500 for those over age 50). For the first time this year, those between the ages of 60 – 63 can contribute an additional $11,250 instead of the $7,500.

3. Create a Stock Portfolio

$10,000 is an excellent amount to start investing in individual companies. For example, you could buy $1,000 of stock in 10 companies or $500 of stock in 20 companies. However, self-directed investing requires you to do your research to make informed decisions. Otherwise, taking shots in the dark isn’t likely to make your portfolio profitable.

In addition, it’s recommended to diversify your investments instead of buying $10,000 of one company’s stock. Diversifying spreads your risk among different assets, shielding you from massive losses and exposing you to well-performing assets.

4. Invest in Mutual Funds or ETFs

You can also supplement your portfolio with shares of mutual funds and exchange-traded funds (ETFs). These funds spread your dollars across a broad range of commodities, stocks, bonds and index funds. These investment tools can offer diversified exposure to an asset class with low fees because they don’t require active management.

One significant advantage of investing in mutual funds or ETFs is gaining access to professional portfolio management. Fund managers make decisions about which securities to buy and sell based on the fund’s stated objectives, saving you considerable time and research. This professional oversight can be particularly valuable for investors who don’t have the expertise or time to actively manage their investments.

To invest part of your $10,000 in shares of mutual funds or ETFs, open a brokerage account with a broker like Vanguard or Fidelity Investments.

5. Buy Bonds

A couple researches ways to invest $10,000.

Bonds are yet another asset to strengthen your portfolio. Like the last two options, you can buy them without limits from investment regulations. Bonds are loans that governments and companies take out and pay interest for later. They are considered less risky than stocks.

As a result, investors typically add them to their portfolios to lower overall risk. However, you should note that bonds have an inverse relationship with interest rates. So when interest rates are raised to control inflation, the value of bonds goes down.

Government bonds, particularly U.S. Treasury securities, offer among the safest investment options, backed by the full faith and credit of the federal government. Corporate bonds typically offer higher yields but come with increased risk depending on the issuing company’s financial health. Municipal bonds present another alternative, often providing tax advantages for investors while funding local infrastructure projects.

6. Plan for Future Health Costs With an HSA

An HSA is an excellent tool for paying for healthcare in retirement. Like a 401(k), you won’t pay taxes on the dollars you contribute to the plan. Even better, qualified withdrawals are untaxed as well.

In addition, the money in the account won’t disappear after a year like in a flexible savings account (FSA). Therefore, as long as you use the funds for healthcare costs, you can save on taxes and prepare for healthcare costs when you’re older through an HSA.

The only drawback to this option is the contribution limit, which is $4,300 for 2025 for yourself or $8,550 for family coverage. If you’re 55 or older, you can contribute an extra $1,000. In any case, you’ll have more to use elsewhere.

7. Invest in Real Estate or REITs

While $10,000 won’t afford you an investment property, you could combine it with funding from loans or partner with investors to purchase real estate. On the other hand, $10,000 on its own can be a sizable deposit into a real estate investment trust (REIT).

Like mutual funds and ETFs, REITs are investment vehicles that can diversify your portfolio. Specifically, REITs split your money among numerous real estate investments, such as residential property, commercial buildings, and land containing natural resources.

REITs don’t allow you to own property outright, but they offer more liquidity than real estate. For example, selling a building can be a demanding, prolonged process. On the other hand, you can sell your shares in an REIT quickly if they have appreciated or you want to invest in another asset.

Which Investment Is Right for You?

Before deciding where to invest $10,000, take time to clarify what you’re trying to achieve. Are you saving for retirement, a home purchase or building an emergency fund? Your financial goals will directly influence which investments make the most sense for your situation. Short-term goals might require more conservative options, while long-term objectives allow you to consider investments with higher growth potential.

Understanding how comfortable you are with market fluctuations is crucial when choosing the right investment for your $10,000. Some investors can sleep soundly through market volatility, while others experience significant stress watching their investments temporarily decline. Be honest with yourself about how much risk you can realistically handle, as even high-potential investments won’t benefit you if anxiety causes you to sell at the wrong time.

The length of time before you need to access your money significantly impacts which investments are appropriate. Longer time horizons (10+ years) generally allow for more aggressive investment choices since you have time to weather market ups and downs. If you’ll need the money within a few years, focus on more stable options that prioritize capital preservation over maximum growth potential.

With $10,000 to invest, you have numerous possibilities ranging from stocks and bonds to real estate investment trusts and index funds. Each option comes with different potential returns, risk levels, and liquidity considerations. Take time to understand the fundamentals of each investment type before committing your money. Many investors benefit from diversification across several asset classes rather than putting everything into a single investment.

Bottom Line

An advisor and client discuss ways to invest $10,000.

An extra $10,000 might not make you the wealthiest person on the block, but it can provide a significant leap forward in your investments. If you don’t have high-interest debt, you can use the money toward numerous lucrative assets, from retirement accounts to commercial real estate. However, before deciding how to invest, it’s best to gauge your unique circumstances and investment approach. That way, you can use the money in a way that benefits you most and aligns with your priorities.

Tips for Investing $10,000

A windfall of $10,000 can be intimidating or exciting, depending on how comfortable you feel with investments. A financial advisor can help you understand your options and make an investment plan. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Splitting $10,000 between different investments might seem unprofitable, but the investment type can impact your gains as much as the dollar amount. So, if you use less than $10,000 for a specific investment, use this guide on how to invest with little money.