$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 build wealth, 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.
Steal this billionaire wealth-building technique
The ultra-rich have also been investing in art from big names like Picasso and Bansky for centuries. And it's for a good reason: Contemporary art prices have outpaced the S&P 500 by 136% over the last 27 years.
A new company called Masterworks is now allowing everyday investors to get in on this type of previously-exclusive investment. You can buy a small slice of $1-$30 million paintings from iconic artists, all without needing any art expertise.
If you have at least $10k to invest and are ready to explore diversifying beyond stocks and bonds,see what Masterworks has on offer. (Hurry, they often sell out!)
Open a high-yield savings account
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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.
A variety of banks offer rates of 4.00% or higher, such as online banks like CIT Bank (4.85% APY (as of May 3, 2024)) and traditional banks like Citibank (4.45% APY (as of Dec. 5, 2023)).
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Convert your spare room into an Airbnb rental
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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)
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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
Even better news? Add a Robinhood Gold membership, and you’ll get access to 5.00% APY2on your uninvested cash3and 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
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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)
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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
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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 for as long as 30 years. You can also invest in the bonds and try to sell them at a profit, depending on how interest rates move during the bond term.
Put some money into a CD
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Along with a Treasury bond, a CD (or certificate of deposit) through your bank is one of the safest 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
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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
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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.
Stop missing out on potentially $1,000s of basically free money with this account
If you’re not using a high yield savings account already, we just have one question: WHY?! Maybe you don’t think it’s worth your time to transfer from a traditional savings account … but by not switching, you could be missing out on $1,000s of basically free money. Here’s why:
The Customers Bank high yield savings account offers a rare 4.76% APY4 (annual percentage yield) — compare that to national average APY of 0.45% (as of 7/22/24). This could be worth hundreds, even thousands of dollars in practically passive income.
To put it another way, in a traditional savings account with the national average APY, a $50,000 deposit would only earn $1,189 with daily compounding interest in 5 years. With Customers Bank, that same $50,000 deposit could yield over $15,200 in the same time frame.5
Open an account today — it takes minutes, and there’s almost zero excuse not to. Customers Bank is powered by Raisin, there are NO fees, and you can withdraw your money whenever you need it. Plus, with FDIC insurance, Customers Bank provides a more secure online banking experience and a safer place to store your extra cash.
Limited Time Bonus: Earn up to $2,000 when you refer friends and family to Raisin. Visit site to learn more.
Click here to open a Customer Bank high yield savings account
Invest in your own low-stakes, hobby-based business
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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
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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.
Masterworks Benefits
- Invest in art like a millionaire for a relatively low cost
- Art investments have outperformed the S&P 500 by over 131% for 26 years
- Purchase shares of artwork by top artists
- Hedge against inflation and diversify your portfolio
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