If you’re currently in possession of $10,000 in savings, then you’re probably wondering what you should do with it. The key problem with letting it sit in a basic savings account is that the amount of interest you can earn is minimal. In fact, over the course of time, leaving your $10,000 in a bank account will lose you money when you take into account annual inflation.
As such, you might want to consider making some smart investments. Not only can this protect your $10,000 from rising inflation, but you also have the opportunity to grow your money.
If you need some help deciding where to invest, we’ve listed 15 smart ways to invest $10,000 in 2019.
5 things to keep in mind before investing your $10,000
$10,000 is a lot of money, so you need to ensure that you know what you are doing. Before you part with your money, make sure you consider the following five questions.
1. How long can you hold on to your investment for?
Ask yourself how long you are willing to invest for before cashing out. If you only want to invest short-term (1-year or less), then you’re best off sticking with investments such as savings bonds, peer-to-peer lending, or crypto. On the other hand, if you want to invest long-term, then focus on the likes of real estate, U.S. Treasuries, and stocks and shares.
2. What level of risk are you prepared to take?
Before you make an investment, you need to understand the underlying risks. The higher the risk, the higher the returns should be. If you have an appetite for high risk, then you’ll be best suited for penny stocks or crypto. Alternatively, if you want to minimize your risk levels, and you’re happy with smaller returns, then focus on bonds.
3. How much money are you looking to make?
It’s important that you set some long-term profit goals. For example, if you plan to make 5% per year, then focus on investments that can make you this amount in the safest manner possible. If you are instead happy making 2% or less, then you can buy bonds to match your yield target.
4. Do you understand the asset you are investing in?
You should only ever invest in an asset that you understand. For example, if you don’t have any knowledge of the stocks and shares space, but you still want to invest, then you’re probably best suited for a mutual fund. Always perform sufficient research on any investment before parting with your money. Most importantly, make sure that sufficient regulation exists.
5. Can you handle market swings?
If you are investing in an asset that is suspectable to market swings, you need to be prepared for it. Markets will never go up in a continuous manner. On the contrary, all marketplaces will experience ups and downs. Just be emotionally ready for this, as losses at some point are inevitable.