A Smart and Savvy Guide on How to Invest Your First 10,000

Having your first $10,000 is a BIG DEAL.
You might have written a cheque for $100 now and then, maybe even hit $1000 on the cheque quite a few times but having $10,000 in your hands is definitely a WOAH moment.
In all honesty, none of us considers investment having $100 or even $1000, assuming the amount to be too meagre to have valuable returns.
While I wouldn’t encourage this attitude, but now that you have at least $10,000 in your pocket, you have certainly reached a point to start thinking around investment options, if you haven’t before.
The good news is, there are innumerable ways and options to invest and help your money grow.
What suits you depends on your investment experience, preference as well as the amount of risk you are willing to take.
Risk tolerance is the limit of variability in investment returns that you are willing to withstand in your financial planning and is an extremely significant component to consider while investing.
Let me put it in this way, if you have a higher net worth to invest and a disposable income, you can afford higher risks and may want to choose your investments yourself, like going for Real Estate or Individual Stocks.
In this regard, a Real Estate crowdfunding platform or self-managed brokerage account may work well in your favour.
Conversely, if you have little investment experience and a mediocre amount to invest, you would want to be on the harmless side of the line and seek safer options with professional aid.
In this case, Mutual Funds and Exchange Traded Funds can benefit you, both of which provide diversified investment exposure with a basket of securities (Like stocks, assets, commodities, bonds etc.), mitigating the risk involved.
Lastly, if you are sure that investment is not your forte, and you are like a medical student sitting in an engineering class, you surely need fully managed options.
In this case, you should trust the expertise of the Financial Advisors.
A financial Advisor uses his knowledge and expertise to construct a personalized financial plan for you, helping you achieve your financial goals.
This is not only limited to investments but also savings, budget, insurance, and tax strategies.
Hence, it is always a smart move to count on professional assistance when you are unsure of risks and securities.

Things to Consider Before Investing

Before I give you a list of options for investing your first 10k, I would like to give you a checklist of considerations that you need to check before investing.
Before you take a plunge into investment and make crucial decisions, you must take a birds-eye view of your financial life and pick your options on this checklist.
It will help you in making safe investment options tailored to your preferences.


Investment Considerations Checklist
  • Long Term Investment
  • Short Term Investment
Net Amount
  • High
  • Medium/Low
  • Single Vehicle
  • Mix of Vehicles
  • High
  • Low
Risk Tolerance
  • High
  • Low
  • Keep Money Safe
  • Have Higher Returns

Now that you have considered your financial status, your investment goal and are mentally prepared to take the challenges and risks along the way; it’s time to hunt for paramount and secure investment options available.

Smart Ways to Invest Your 10,000

To make the best out of 10k, here are some recommended ideas on top of our list.

  • Invest in Stocks
  • Consider a High Yielding Savings Account
  • Create an Emergency Fund
  • Look for Mutual Funds
  • Give Peer to Peer Lending a Shot
  • Invest in your own business
  • Hunt for Robo-Advisors
  • Invest in Yourself
  • Invest in your home
  • Start a Blog, Vlog or Podcast

Invest in Stocks

Investing in stocks has become the easiest way out to grow your wealth.
You no longer need a stockbroker or trade stocks, just simply creating an online brokerage account will get you started with the process.
Select an online broker based on their features, fees, and convenience that caters you the best.
Then try to learn about the companies you are considering for your investment.
I would recommend you to look at the following things in a company to understand its prospects of success and profit:

  • The Annual Report
  • The balance Sheet
  • The Income Statement
  • The Cash Flow Statement
  • The Profit Margin
  • The Company’s Debt

Invest time to analyze the stock’s value before you invest money in stocks.
Keep yourself up to date with stock performance histories, professional forecast, news, and then select one or two stocks to begin your investment.
Remember to always keep in mind the threshold for the amount you can lose.

Consider a High Yielding Savings Account

If you want to make an absolutely risk free investment, you should consider a High yielding savings account.

High yielding because interest rates can be 20 to 25 times higher than what traditional savings accounts offer.

The key to earning more from this particular option is to open an account at a separate institution as compared to where you do your primary banking.

The best options available in this regard are online-only banks that provide the best rates for top national savings accounts.

The key factor to consider a bank is their interest rates, which definitely should be higher than their competitive banks. Fees and initial deposit requirements to open an account should also be initially checked.

It usually only takes about ten minutes to open and set up an online savings account.

Here’s how you can do it:

  • Look for top national saving accounts rate
  • Choose the bank that meets your requirements
  • Fill the online account application
  • Deposit in your new account
  • Enroll in online banking
  • Follow the account-specific rules

When picking this option, always keep in mind to avoid fees as much as possible to maximize your returns.

Create an Emergency Fund

Unprecedented times like today, when we are dealing with the financial aftermath of the Corona Virus Pandemic has made one thing very clear. NEVER TAKE YOUR EMERGENCY FUND FOR GRANTED.
The very first thing you should do with your 10k is to create an emergency fund.
The idea behind emergency funds is to have a highly liquid source of cash to get you through at least three to six months’ worth of expense for financially catastrophic times.
One thing about life that no one can deny is the uncertainty of it. An emergency fund will keep you from falling knee-deep into loans and debts in uncalled-for circumstances like a loss of a job, an illness, or a major home repair.
The goal is to form a safety net for yourself and improve your financial security.

Look for Mutual Bonds

Mutual funds give you the widely sought advantage of diversification in investment.
In a mutual fund, thousands of investors invest in generating a pool of money that is utilized in a wide range of securities like stocks, bonds, etc. hence ensuring risk reduction due to diversification.
Mutual funds also give you the benefit of easy buying and easy selling
The things you need to be vigilant about when opting for mutual funds are deciding between active or passive management, fees, and choosing where to buy the mutual funds from.
Here’s how you can get started with this type of investment:
Choose between active or passive funds
As the name dictated, active funds are professionally managed with active and profound research by the experts in the field.
Therefore, a fee is involved. On the other hand, passive management is easy and cheaper and is increasingly growing in popularity.
Consider your Budget
You should always start with the amount you are comfortable leaving untouched for at least five years.
You can start investing in mutual funds with an amount as low as $500. Some brokers charge no fee while for others amount can go up to as much as $3000
Decide Where to Buy Mutual Funds
You can buy mutual funds from the online brokerage in which case you are presented with a wide range of fund companies and a broad selection, or you can directly buy the funds from the companies that created them.
Either way, begin with your research.

Give Peer to Peer Lending a Shot

Peer to Peer lending, also known as ‘’social lending’’ or ‘’crowd lending’’ is an arrangement which connects the borrower directly to the investor, cutting out the financial institution as the middle man.
There are special sites developed for this investment with a set rate and terms, also enabling transactions.
Before considering a P2P lending site, check out their fees on transactions. Every site has different set terms, and you need to make sure that go well with your requirements.
The borrowers can benefit from the flexible loan terms while investors can get much higher interest rates, then they are usually offered at banks.
The best thing about P2P lending is you can start from as low as $25 and maximize on your diversification with numerous such loans.
This helps to cut the risk level to a great extent.

Invest in Your Own Business

Invest in yourself.
Build a business and help it grow to maximize its profits.
It is not as easy as it is said, with great risks involved.
This often requires huge investment but thanks to the world of the internet, you can now familiarize yourself with numerous ways to start an online business even with little money.
If you have the right skill set, abilities, talent, and knowledge, you can come up with a notion and turn it into a business scheme.
They say, never do what you are good at for free. Better yet, think around entrepreneurship, be the master of your finances, take control of your lives even in a tough economy.
The internet has made it easy to start a business for as low as $1000.
The trick is to invest in marketing, studying your target audience, and making sure the news of your product or idea strikingly reaches them.
Several home-based business ideas are requiring very minimum capital to start with like freelancing, blogging, online store, to name a few.

Hunt for Robo-Advisors

If investing is not our strong suit, but you wish to capitalize on your wealth, your best shot is to hunt for Robo-Advisors.
Robo-advisors are digital platforms that provide automated, algorithm-driven investment services with little to no human supervision.
It begins with gathering as much data as it can get from you on your financial status through a survey and then uses those facts to offer advice and find the best investment options fully catered to your needs.
If you are first time investor, do not have much capital to invest for and want to aver from risk as much as possible, Robo advisors typically offer very low opening balance and are quite inexpensive.
Not only this, but they are also highly accessible, available 24/7, just an internet connection away.
Robo-Advisors can also help you learn how to invest if you are interested and want to speed things up.
You can observe how to construct your investment portfolios and learn from educational tools and content provided by them.

Invest in Yourself

Pretty sure you would not have considered this as an investment, but there are quite a few ways through which you can invest in yourself and reap its fruits in the long term.
Have you ever considered:
To take online courses?
To start a new degree?
To hire a personal coach?
Or to do anything you can think of to develop and polish your skills and talents.
These skills and abilities can take you a long way ahead in the job market, introduce you to new employment opportunities, or even give you new ideas for business and entrepreneurship.

Invest in Your Home

There is no doubt that your house is one of your most prized assets.
You can dramatically increase its value by uplifting and renovating it.
If there is a requirement of a major fix, utilize some amount from your 10k to mend them.
These little improvements have a direct impact on the worth of your home.
The changes I am talking about are not drastic or major changes, like remodelling your entire kitchen or washroom, even minor changes, like reinstalling windows or changing rooftops.
Even adding granite countertops in your kitchen can do the trick. Another major change that pays off well is changing the appeal of your house.
This investment benefits you as soon as you make them; with the comfort of an upgraded house and increased property value.

Start a Blog, Vlog or Podcast

For this, you don’t require a huge sum of money at your hand.
You can start a blog on literally anything that you are interested in. You can write at your convenience and become an affiliate partner with businesses as your side gig.
There are countless social media influencers today that started with a handful of followers and gradually with their content, became successful, and started making money.
The real investment here is to have a good camera, laptop, and editing software.
If writing is not your thing, you can also consider Vlogs and Podcasts.
The key is to build your followers, and for that, you need to understand their interests profoundly and create content that will intrigue them the most.

The Crux

Starting with $10,000 can take you a long way ahead in your financial journey, only if you know how to invest them right.
Don’t leave this crucial decision on just your judgment call.
Begin by understanding your financial status.
Do your research, study, and understand your options, evaluate your market, and make sensible and informed decisions.
Always remember to stick by diversification in investment.
Don’t trust all your eggs with a single basket. Try to pick 3 or 4 of these ideas and see what works best for you.



Jun Sing Tan

I help young adults and working professionals achieve their financial goals with a full suite of risk management and wealth accumulation solutions. I firmly believe that financial education should be easy and achievable for all. I am committed to service and hope to be your one stop financial solution.


Jun Sing Tan

November 20, 2020