Top Ways to Invest $10,000 in 2019
If you want to become financially successful and control your own destiny, you have your work cut out for you. You need to build your network and find ways to set yourself apart from the crowd. You need to take the reins and make your own decisions when it comes to things like how, when, and where you spend your money. You also need to invest in yourself. However, one of the most important things to do is to make smart, savvy investments.
There isn’t really a minimum that you should invest – you can start with as little as $1,000. However, it’s true that you get more bang for your buck if you can invest a larger amount of money. And, if you’re trying to earn your first $1,000,000, then you need to take action now. If you have $10,000 on hand, you could invest that in a number of different ways to build wealth and foster financial independence.
What are the best options for investing $10,000 in 2019? Let’s take a closer look at some of the options that are best suited to helping you achieve your financial goals.
Real Estate Investing
Ok, no, you’re not going to do much in the way of traditional real estate investing with just $10,000. Even the most basic fix and flip will set you back more than that unless you’ve got a friendly lender who will work with you for $10k down. No, what we’re talking about here is investing in real estate online – it’s a type of peer-to-peer lending and allows you to pool your investment funds with others and then put that money into property. What sorts of properties?
Actually, you will find that with the right platform, you can afford to put your money into lucrative commercial real estate deals. Does that mean you’ll end up a landlord? Not really. That falls to the management company. You and the other investors are just providing capital. How do you get started?
There’s just one way to go – you need to find the right online platform. There are several from which you can choose, including Fundrise, which offers returns between 8.76% and 12.42% to RealtyShares, and numerous others. If you want to get into real estate without having all the headaches that come from owning property and dealing with tenants personally, this could be a great fit.
Peer-to-peer lending, or P2P lending if you prefer, has become a force to be reckoned with in the modern world. Not entirely sure what this type of lending entails? Here’s what you need to know in a nutshell.
Joe needs to borrow $5,000. A traditional lender doesn’t want to bother with an amount that small. It’s just not worth their time. Joe can’t get a loan, despite the fact that he’s got good credit and is not a significant risk. Enter P2P lending.
Joe goes to a P2P lending site like Lending Club and signs up. He specifies how much he wants to borrow and provides some basic information. That data is then sent out to Lending Club members (people like you with money to invest). They choose whether they want to help Joe out, and even decide how much they want to invest out of their personal funds in Joe’s loan. With Lending Club, you can go as low as $25 per loan, but you can back up to 100% if you want.
In this situation, Joe gets the money that he needs, while the folks backing him (people like you) get to earn interest. That’s money in your pocket, rather than in the bank’s pocket. Sound like a win-win scenario? It is. And Lending Club is just one option out there. You’ll find a host of other choices, including Prosper and CircleBack Lending.
A Roth IRA
Trying to build wealth for your retirement years? A Roth IRA might be a great choice. You are no doubt familiar with traditional IRAs.
Roth IRAs are pretty similar, but they have a few differences. One of those is the fact that you can contribute up to $5,500 per year if you’re under the age of 50, or up to $6,500 per year if you’re over 50.
That money will appreciate without taxes and you don’t have to pay taxes on disbursements, either. With that being said, your contributions are all after-tax dollars, so you gain no tax benefits in the beginning.
Think that a Roth IRA is out of the question because you already have a 401(k), a 403(b), or a 457 account? Think again! Anyone can use a Roth IRA at any point in their lives. They are one of the most efficient ways to build wealth and save for retirement out there.
Start Playing the Stock Market
If you want to build wealth, there are few better options than the stock market (the Trump-related volatility aside). With the right platform and the right education, you can make smart decisions that help you build wealth over time while hedging against risk.
Before you start, though, make sure that you’re investing with money that you can afford to lose. Never, ever, play the stock market with money that you need to make ends meet. That’s a short route to financial ruin. Even the least risky stocks still have the potential to lose all their value overnight, leaving you with nothing.
If you can stand the risk of stocks, then I recommend finding the right platform. The days when you had to work with a broker are done and gone. They’re expensive. They’re outdated, too. You can make smart decisions on your own with the right tools. E*Trade, Scottrade, TD Ameritrade and the like can all help you find the right stocks to invest in, and then track your investments over time.
With all that being said, I cannot recommend you getting into stocks if you don’t know what you’re doing. The risks are simply too great. You might as well take your cash out in the backyard and set it on fire. Instead, take a little time to educate yourself. TD Ameritrade offers a wealth of learning tools, but you’ll also find plenty of online education sources. Read. Learn. Understand. Then invest.
Go with Bonds
Stocks carry immense risk. The volatility of the stock market means that you could see great gains, but there’s also the chance to lose a lot. Bonds allow you to offset that risk. These are low-risk, slow-growth investments that pay off over time. Because of their low risk, the yield is not what you could make with other investments. However, there is very little chance that your investments will be wiped out. You can purchase bonds in a number of different formats, too.
One option is to put your money into corporate bonds. These are offered by companies looking to build capital and can offer steady returns over time. You could also go the route of government bonds – T-bonds are issued by the US Treasury and help the government build capital while earning you money. Finally, there are municipal bonds, which are offered by towns and cities in an attempt to build capital for improvements while offering a return to investors.
One of the most interesting things about bonds, in comparison to other investment options, is that you can usually determine how much you stand to gain over time. You cannot predict what you’ll earn by buying stock in Company A or Company B, but you can determine exactly what you’ll earn with a T-bond, corporate bond, or municipal bond. That offers a lot of reassurance for those attempting to plan their financial future.
Go with a Different Platform
Think that your investment options are limited stocks, bonds, and commodities? Take another look at the options available to you and you’ll find a host of new platforms out there. We’ll use Motif as an example.
Once you sign up and download the app, you have two options. You can put your money into another Motif member’s mutual fund (called a motif) and watch it grow, or you can create your own mutual fund and build wealth while allowing other investors to get in on the action as well.
You can control a number of factors related to your fund, such as the industries in which your money is invested, and the platform handles the minutia. Of course, Motif is just one example of the many different types of platforms out there.
Another example here is Acorns. This app is completely different from Motif. The way it works is simple:
You buy a t-shirt and pay $15.62.
Acorns monitors your bank account and sees the transaction.
The app automatically invests the spare change in this transaction, rounding up from $15.62 to $16.00.
Acorns is automated, so you don’t need to do much beyond setting up your account and then watching where your money goes and how quickly it grows.
In the End
When it’s all said and done, there are tons of ways that you can invest $10,000 in 2019. Not all of them are equal, and you do need to ensure that you’re investing based on your unique risk tolerance. It’s also important to ensure that you have the ongoing income to support your investments. Now is a great time to invest in yourself with my brand new Six Figure Sunday course (click here to sign up) and learn how to earn six figures while working just one day per week.