Investing Investing Basics

10 Simple Ways To Turn $10,000 Into a Steady Passive Income

Unlock the secrets to make $10K work for you, generating passive income like never before.

By Michelle Smith

Edited by Eric McWhinnie

Updated Dec. 17, 2024

$10,000 is a solid sum to have tucked away in a bank account. If you’ve managed to save that much, you can let the cash stay in stasis in a typical savings account for an emergency.

But if you already have a fair emergency fund and want to use your $10,000 to get ahead financially, you have several options.

One of these 10 opportunities could be the ideal way for you to turn your $10,000 into an ongoing source of income.

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Open a high-yield savings account

If you don’t want to tie your $10,000 up in an investment, storing it in a high-yield savings account could be a fantastic way to ensure you can use it as needed while still turning a small profit.

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Convert your spare room into an Airbnb rental

You don’t need an entire investment property to make money on the side through Airbnb. Instead, consider refurbishing some of your lesser-used spaces so you can rent them out to interested travelers.

You’ll have some upfront costs for cleaning, redecorating, and adding furniture to a previously unused space, but it could cost you much less than $10,000 to spruce up the spare bedroom.

Consider placing the rest of your $10,000 in a high-yield savings account. Then, watch your savings grow as you add your rental income to the fund.

Invest with a real estate investment trust (REIT)

Not interested in transforming your previously private space into a communal rental? You may still be able to turn a property-based profit by investing with a real estate investment trust (REIT).

REITs own income-generating properties like apartment complexes, offices, hotels, cell towers, and other infrastructural sites.

If you purchase stock in a publicly traded REIT, you and the other shareholders may receive dividends on these investment properties.

Get a free stock valued between $5 to $200

Secret: You don't need thousands of dollars to buy thousand-dollar stocks or create a diverse portfolio.

Robinhood offers a method of investing called “fractional shares.” On its own, one share of a single stock could cost a lot of money, making it difficult to diversify. Robinhood allows you to buy pieces of stock instead, so you have the option to build a diverse portfolio quickly.

Let’s say you want to invest $250, as an example.

With that amount, you could build a relatively diverse portfolio with an investment of $50 in a big tech stock, $50 in a retail stock, $50 in an energy stock, $50 in a manufacturing stock, and $50 in a bank.¹ This content is for informational purposes only, you should not construe any such information as legal, tax, investment, financial, or other advice. To get stock reward, new customers need to sign up, get approved, and link their bank account. Stock rewards shares cannot be sold until 3 trading days after the reward is granted and the cash value of the stock rewards may not be withdrawn for 30 days after the reward is claimed. Stock rewards not claimed within 60 days may expire. See full terms and conditions at <a href="https://robinhood.com/us/en/support/articles/open-account-pick-your-stock/">rbnhd.co/freestock</a>. Fractional shares are illiquid outside of Robinhood and are not transferable. Not all securities available through Robinhood are eligible for fractional share orders. For a complete explanation of conditions, restrictions and limitations associated with fractional shares, see the Fractional Shares section of our Customer Agreement. Robinhood Gold is offered through Robinhood Financial LLC and is a membership offering premium services available for a fee.

Even better news? Add a Robinhood Gold membership, and you’ll get access to 4.25% (as of 11/15/24) APY² Annual Percentage Yield. Rate valid as of April 12, 2024. To earn interest, a cash balance is needed. If you have a margin balance, there is no cash balance to earn interest. Interest rates for cash sweep and margin investing can change at any time. Fees may reduce interest earnings. on your uninvested cash³ Interest is earned on uninvested cash swept from your brokerage account to partner banks. Partner banks pay interest on your swept cash, minus any fees paid to Robinhood. As of Nov 15, 2023, the Annual Percentage Yield (APY) that you will receive is 1.5%, or 5% for Gold customers. The APY might change at any time at the partner banks' or Robinhood's discretion. Additionally, any fees Robinhood receives may vary and are subject to change. Neither Robinhood Financial LLC nor any of its affiliates are banks. All investments involve risk and loss of principal is possible. Robinhood Financial LLC (member SIPC), is a registered broker dealer. and the ability to buy and sell stocks 24 hours a day, 5 days a week.

Open and fund a Robinhood account and earn up to $200 in stock

Invest in dividend-paying stocks

A dividend-paying stock is an investment where a company distributes a certain amount of its profits to its shareholders, usually once per quarter.

Not all stocks pay dividends but established companies that historically turn profits often do, such as Apple, AT&T, Verizon, and Microsoft.

Open an individual retirement account (IRA)

An IRA is a tax-advantaged individual retirement account. If you invest in a traditional IRA, the money you invest is typically tax deductible, so you’ll pay taxes once you withdraw money from the account.

A Roth IRA is not tax-deductible, but you won’t have to pay taxes when you start withdrawing funds.

Not sure which type of retirement account to open? Both types of IRAs are advantageous for different reasons. Your retirement planner can help you sort through your IRA options and decide which type of account makes the most sense.

Look into U.S. Treasury bonds

If you want to ensure you earn a profit on your $10,000, purchasing U.S. Treasury bonds is probably your safest investment option.

These low-risk bonds are sold with fixed interest rates, paid out on a six-month cadence for the entire term, which may be as long as 30 years. Depending on how interest rates move during the bond term, you can also invest in the bonds and try to sell them at a profit.

Grow Your $$: 11 brilliant ways to build wealth after 40

Put some money into a CD

Along with a Treasury bond, a CD (or certificate of deposit) through your bank is one of the least risky investments you can make with your $10,000.

A CD is comparable to a savings account in that it’s a bank account that generates interest. Still, you agree to leave your deposit in that account for a set period in exchange for a favorable interest rate.

You’ll likely be penalized if you withdraw money from your CD earlier than agreed, so you don’t want to tie up your emergency fund money by investing in one.

Pay off your student loans

The average student loan debt is more than $37,000, which typically takes decades to pay off. If you have both $10,000 in hand and a student loan steadily accruing interest, you might consider paying off as much of that debt as possible with your cash.

Of course, paying off a student loan isn’t the same as generating a steady income source. However, paying off a loan is an investment in your future: Doing so saves your future self thousands of dollars in interest payments over the next few decades.

Pay off your credit card debt

Credit cards tend to have high interest rates. If you don’t pay off your card balance before each payment cycle, your debt can quickly spiral out of control, and the problem will only grow the longer it takes you to pay the balance.

Working to get out of debt may not give you a source of passive income — but it will give you back a big chunk of your budget that would otherwise go to increasingly dire credit card bills.

Earn up to a $300 bonus and grow your money with up to 4.00% APY

This powerful combination checking + savings account from SoFi® allows you to earn up to a $300 bonus with direct deposit and grow your money with up to 4.00% APY.⁴ New and existing Checking and Savings members who have not previously enrolled in Direct Deposit with SoFi are eligible to earn a cash bonus of either $50 (with at least $1,000 total Direct Deposits received during the Direct Deposit Bonus Period) OR $300 (with at least $5,000 total Direct Deposits received during the Direct Deposit Bonus Period). Cash bonus will be based on the total amount of Direct Deposit. Direct Deposit Promotion begins on 12/7/2023 and will be available through 1/31/2026. Full terms at <a href="http://sofi.com/banking">sofi.com/banking</a>. SoFi Checking and Savings is offered through SoFi Bank, N.A., Member FDIC. SoFi members with Direct Deposit can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the 4.00% APY for savings (including Vaults). Members without Direct Deposit will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of Dec. 3, 2024. There is no minimum balance requirement. Additional information can be found at <a href="http://www.sofi.com/legal/banking-rate-sheet">http://www.sofi.com/legal/banking-rate-sheet</a>

This is one of the top accounts we’ve seen, and offers like this can be rare. You work hard, and now it’s time to make your money work for you — with SoFi, you can grow your money with hardly any effort!

SoFi has no account or overdraft fees⁵ Overdraft Coverage is limited to $50 on debit card purchases only and is an account benefit available to customers with direct deposits of $1,000 or more during the current 30-day Evaluation Period as determined by SoFi Bank, N.A. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Members with a prior history of non-repayment of negative balances are ineligible for Overdraft Coverage. and additional FDIC insurance up to $2 million on deposits is available through a seamless network of participating banks.⁶ We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Checking & Savings Fee Sheet for details at <a href="http://sofi.com/legal/banking-fees/">sofi.com/legal/banking-fees/</a> ⁷ SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per legal category of account ownership, as described in the FDIC’s regulations. Any additional FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $2M through participation in the program. See full terms at <a href="http://sofi.com/banking/fdic/terms">SoFi.com/banking/fdic/terms</a> See list of participating banks at <a href="http://sofi.com/banking/fdic/receivingbanks">SoFi.com/banking/fdic/receivingbanks</a> Plus, you can receive your paycheck up to 2 days early.⁸ Early access to direct deposit funds is based on the timing in which we receive notice of impending payment from the Federal Reserve, which is typically up to two days before the scheduled payment date, but may vary.

How to earn up to $300: Sign up and make a direct deposit within the first 25 calendar days of the promotional period, then collect a $300 cash bonus with a direct deposit of $5,000 or more.

SoFi is a Member, FDIC. ⁷ SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per legal category of account ownership, as described in the FDIC’s regulations. Any additional FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $2M through participation in the program. See full terms at <a href="http://sofi.com/banking/fdic/terms">SoFi.com/banking/fdic/terms</a> See list of participating banks at <a href="http://sofi.com/banking/fdic/receivingbanks">SoFi.com/banking/fdic/receivingbanks</a>

Open your SoFi account and set up direct deposit

Invest in your own low-stakes, hobby-based business

It can take tens of thousands of dollars to get a small business off the ground. Unfortunately, since one out of every five small businesses fails, plenty of American entrepreneurs lose their businesses and never recoup their initial investment costs.

In contrast, it doesn’t take nearly as much cash to launch a small, hobby-based business to boost your bank account doesn't take nearly as much cash.

For instance, while it might take a lot of time and energy to self-publish an ebook or create an ad-generating video series, you won’t have to spend too much of your $10,000 to get started.

Once you’ve created your content or launched your small online crafting business, you shouldn’t have to invest much more money and can instead focus on tallying your profits.

Bottom line

Having a tidy $10,000 in cash is something you can be proud of, but if you make smart money moves with that money, you could transform it into something even bigger and better.

If you want to find more investment opportunities, meet with an accountant, retirement planner, or other financial professional.

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Invest in Paintings by Basquiat, Picasso, Banksy

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