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 that can all lead to portfolio growth and overall wealth. These are some of the best ways to invest $10,000 to help your 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. Because federal regulations limit contributions to your IRA, there is only so much you are able to deposit, so you will still have money left over for other investments. In 2025, you cannot contribute more than $7,000, or $8,000 if you are age 50 or older.

When maxing out your IRA, you will need to decide between a traditional or Roth account.

A traditional IRA offers tax deductions now but requires you to pay taxes when you withdraw in retirement.
A Roth IRA uses after-tax dollars but provides 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 to max out your IRA will leave you with $2,000 to $3,000. You can then invest the remainder in one of the options below.

2. Contribution to a 401(k)

If your employer offers a 401(k) retirement plan, you could deposit the money into this account. It is especially advantageous to contribute enough to your 401(k) so you receive the full 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 is wise to invest more of your money into other types of investment accounts once you max out your matching funds.

For 2025, employees can invest a maximum of $23,500, with an additional $7,500 for those over age 50. For the first time this year, those between the ages of 60 to 63 can contribute a catch-up contribution totaling an additional $11,250 instead of the $7,500.

3. Create a Stock Portfolio

$10,000 is an excellent amount to begin 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 because taking shots in the dark isn’t likely to make your portfolio profitable.

Additionally, it’s recommended that you diversify your investments instead of using $10,000 to buy just one company’s stock. Diversifying spreads your risk among different asset classes, 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 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 another asset that can help strengthen your portfolio. Bonds are loans that governments and companies take out and pay interest for later. They are considered less risky than stocks. Like mutual funds and ETFs, you can buy them without limits from investment regulations.

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. That means that when interest rates are raised to control inflation, the value of bonds goes down.

There are a few types of bonds:

Government bonds, particularly U.S. Treasury securities, are among the safest investment options because they are backed by the full faith and credit of the federal government.
Corporate bonds typically offer higher yields but carry 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.

Carefully assess the pros and cons of each to determine which bonds will work best for your portfolio.

6. Plan for Future Health Costs With an HSA

A health savings account (HSA) is an excellent tool to pay for healthcare in retirement. Like a 401(k), you won’t pay taxes on dollars you contribute to the plan. Even better, qualified withdrawals are also tax-free.

Unlike a flexible savings account (FSA), the money in the account won’t disappear after a year. 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 will still have more money left to invest elsewhere.

7. Invest in Real Estate or REITs

While $10,000 will not likely afford you an investment property, you could combine it with funding from loans or partner with investors to purchase real estate. You can also use your $10,000 to put 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 do offer more liquidity than real estate. For example, selling a building can be a demanding, prolonged process. Instead, you can sell your REIT shares quickly if they have appreciated or if you want to invest in another asset.

8. Build a High-Yield Emergency Fund

A portion of your $10,000 can be parked in a high-yield savings account or money market account to serve as an emergency fund. These accounts provide liquidity and FDIC insurance (up to applicable limits) while typically earning more interest than traditional savings accounts.

This option is best suited for those who:

Don’t yet have 3–6 months’ worth of essential expenses saved
Want quick access to cash in case of job loss, medical costs or major repairs
Prefer low risk and preservation of capital

While the long-term returns are lower than stocks or real estate, this allocation supports overall financial stability and can prevent forced investment sales during emergencies.

Which Investment Is Right for You?

Before deciding where to invest $10,000, take time to clarify your financial goals. Are you saving for retirement, a home purchase or building an emergency fund?

Your financial strategy 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 your comfort level 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 will not benefit you if anxiety causes you to sell at the wrong time.

The length of time before you need to access your money also impacts which investments are appropriate. Longer time horizons (10+ years) generally allow for more aggressive investment choices since you have time to weather market changes. If you 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, there are 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 investing in a single asset.

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. There are many ways to invest $10,000, but the best one depends on your personal situation. Before deciding how to invest, it is 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.

If you are unsure which option is best for you, consider consulting a financial advisor for personalized guidance.

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.