Where to Invest $10,000 Right Now | The Motley Fool (2023)

What constitutes a lot of money is relative. Investing $10,000 looks different depending on things like your annual income and the size of your stock portfolio. Therefore, this article will fall short of being a one-size-fits-all game plan or something that speaks to your particular situation. That said, there are solid, general investing principles that can guide a $10,000 investment no matter who you are.

Let's look at how to use $10,000 to further your investing journey. To preview, I believe investors should build some cash reserves, invest in established performers, and build small positions in promising companies that still have a lot to prove.

Where to Invest $10,000 Right Now | The Motley Fool (1)

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Don't overlook holding cash

Let's start this discussion with two data points on the stock market: one general and one current. First, the stock market regularly drops sharply. Over the past decade -- one of the best decades ever for investors -- there have been five pullbacks of 10% or more. And during these drops, the stocks of many quality companies have fallen far more than the 10% market average.

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Second, right now stocks are quantifiably expensive in general. Looking at valuation metrics like the price-to-earnings ratio and the price-to-sales ratio, the average for the S&P 500 is the highest it's been in over a decade. Granted, valuations shoot higher when earnings and sales go down. And over the past year, these are temporarily down due to the COVID-19 pandemic. But the valuations are still expensive nonetheless. That doesn't mean a crash is imminent. But I wouldn't be surprised if stocks pulled back 10% or more sometime soon, as they have done many times in the past.

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S&P 500 P/E Ratio data by YCharts

"Antifragile" is a term coined by mathematician and author Nassim Nicholas Taleb, and it means something that doesn't break with problems -- by contrast, it gets stronger. By keeping cash on the sidelines, you put your portfolio in an antifragile position because you'll be able to benefit from market chaos by buying quality stocks at bargain prices.

There's no magic number for how much cash you should have on hand. But having 10% to 20% of your portfolio in cash will put you in an enviable position when opportunity knocks. Therefore, if you have $10,000 to invest, make sure your cash reserve is full. Someday, it'll come in handy.

For what it's worth, this strategy is how I built outsized positions in Square and Magnite -- I bought both in 2020 when they were down more than 50%. It may be a cherry-picked anecdote, but both are already multibaggers in the short time since, which demonstrates the potential reward of being prepared.

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Build on a strong foundation

Long-term investors need to build a diversified portfolio primarily with companies that have a history of past success because this is where you'll often find tomorrow's winners.

One company like this to consider is United Rentals (URI 0.34%). This company rents out equipment used in projects from building to manufacturing. Since equipment like this is expensive to buy, it's often in a party's best interest to rent, which keeps business rolling in for United Rentals. But management is also constantly aware of aging inventory and will sell certain items when there's more to gain from its sale than from maintaining it as a rental.

United Rentals has a long history of earnings growth. And because of this earnings growth, the stock is a 12-bagger over the past decade. In the near term, the company's prospects look good as well with Congress' infrastructure bill boosting spending in categories where it has a strong presence. And longer term, United Rentals has a large market opportunity. Consider that it is the largest equipment rentals player in North America but with just 13% market share, which suggests the market is highly fragmented. But with plenty of cash from operations (almost $2.7 billion in 2020), management can grow via acquisitions. This was on display when it bought out General Finance in May for almost $1 billion, a company offering storage solutions on job sites.

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Image source: Zoom Video Communications.

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With $10,000, there's a good case to build a bigger position in United Rentals. Another strong company to consider right now is Zoom Video Communications (ZM -1.06%). If the company was a purely consumer-facing business, then perhaps I would question its longevity in a (hopefully) soon-to-be post-pandemic world. But Zoom is mainly a corporate solution, with 63% of first-quarter revenue coming from companies with 10 or more employees. Corporate customers will likely keep their subscriptions active if they have a hybrid workforce (part at home, part in the office), even if they use Zoom less going forward than they did in 2020.

However, with one foot in the door, Zoom has the opportunity to upsell its customers, which it's already doing quite successfully. Among the customer base of 10 or more employees, its Q1 net dollar expansion rate was over 130% for the 12th consecutive quarter. That's four years of spending growth among these existing customers, which tells me this company has staying power.

Because of its bumper year in 2020, Zoom now has around $4.7 billion in cash and marketable securities, giving it lots of optionality when it comes to creating or acquiring other products and services for its corporate customers. What's particularly intriguing to me is that these new offerings will require new employees. And now may be a great time to find these new workers. Some reports estimate millions of workers are currently looking for a new job in a trend called The Great Resignation. And according to Glassdoor, most people love working at Zoom, meaning it should attract top talent wherever needed.

For these reasons and more, I believe investors should consider building a position in Zoom. However, remember you don't have to make full-fledged investments in Zoom or United Rentals all at once. With core portfolio positions like these, buying shares at set intervals -- called dollar-cost averaging -- can help make sure you're not buying everything at highs.

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Make some small bets too

By having cash on the sidelines and building core positions in proven winners like United Rentals and Zoom, you're in a great position to finally make some smaller bets on high-potential companies that still have a lot to prove. Real-estate technology company Latch (LTCH -13.17%) fits this description perfectly.

Landlords sign multi-year contracts with Latch to provide connected hardware like electronic door locks for their rental spaces. And the company provides ongoing software to tenants. This renewable revenue stream provides a high degree of revenue visibility, making financial results easier for management to forecast. For example, Latch's management bolstered its guidance credibility by nailing its first quarterly financial report since going public via a special purpose acquisition company (SPAC). Importantly, it reaffirmed its bookings guidance of $290 million to $325 million for 2021, which represents a 76% to 97% year-over-year increase. That's good news considering many questionable SPACs pulled guidance soon after going public.

Latch still has a lot to prove, but management is building credibility. Longer-term, this team has looked at its existing contracts and its ongoing opportunity and has concluded it can generate $249 million in free cash flow (FCF) in 2025. Just for perspective, many investors consider a price-to-FCF ratio of 20 to be a good value. Right now, Latch has a $1.8 billion market cap. Therefore, assuming it hits its 2025 FCF guidance, this could be a $5 billion company by then -- up over 2.5 times in just four years. That would assuredly beat the market.

Thus far, my advice has tried to use your $10,000 investment to make your portfolio more antifragile. But an antifragile portfolio should also make asymmetric bets. Regarding asymmetry, Taleb says, "If you make more when you are right than you are hurt when you are wrong, then you will benefit, in the long run, from volatility." That's the reasoning for starting a position in a company like Latch. If you invest a small portion of your portfolio in a company like this -- say 1% -- you won't get burned if it fails. But if it succeeds, it could become a core portfolio position. And it would have earned it with fundamental results, making it a worthy long-term holding.

Ultimately, I think this is how investors should be thinking about their portfolios, no matter how much money they have to invest right now. Keep cash on the sidelines to take advantage of rare bargains, build core positions in proven companies with a bright future, and place small bets that could pay off big if things go right. In this way, I believe you're setting your portfolio up for long-term success.

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Jon Quast owns shares of Latch, Inc., Magnite, Inc, Square, United Rentals, and Zoom Video Communications. The Motley Fool owns shares of and recommends Magnite, Inc, Square, and Zoom Video Communications. The Motley Fool recommends Latch, Inc. The Motley Fool has a disclosure policy.


Where should I put $10,000 right now? ›

7 Ways to Invest $10,000
  • Max Out Your IRA. ...
  • Contribution to a 401(k) ...
  • Create a Stock Portfolio. ...
  • Invest in Mutual Funds or ETFs. ...
  • Buy Bonds. ...
  • Plan for Future Health Costs With an HSA. ...
  • Invest in Real Estate or REITs. ...
  • Which Investment Is Right for You?
Mar 2, 2023

What is the smartest thing to do with $10 000 dollars? ›

Key Takeaways. Using $10,000 in savings to invest or pay down debt is a financially savvy decision. A few of the best investment options include increasing your 401(k) contribution and opening an IRA or 529. Using your savings to make additional payments on your mortgage may make financial sense.

How can I double $10 K fast? ›

Now that our disclaimer is out of the way, let's jump into some ways to quickly double 10k!
  1. Flip Stuff For Money. ...
  2. Invest In Real Estate. ...
  3. Start An Online Business. ...
  4. Start A Side Hustle. ...
  5. Invest In Stocks & ETFs. ...
  6. Invest In Debt. ...
  7. Invest In Cryptocurrency. ...
  8. Use A Robo-Advisor.
Mar 5, 2023

What should I do with $10000 in Cash? ›

  • 5 ways to invest $10,000. After determining your answers to these questions, you're ready to start investing your $10,000. ...
  • Build your emergency savings fund. ...
  • Pay off high-interest loans. ...
  • Fund your retirement account. ...
  • Invest in an index fund. ...
  • Invest in individual stocks.

How to flip 10K into 100K? ›

Here are the most effective ways to earn money and turn that 10K into 100K before you know it.
  1. Real estate investing. ...
  2. Product and website flipping. ...
  3. Invest in index funds. ...
  4. Invest in mutual funds or EFTs. ...
  5. Invest in dividend stocks. ...
  6. Peer-to-peer lending (P2P) ...
  7. Invest in cryptocurrencies. ...
  8. Buy an established business.

How to invest $10 000 dollars wisely? ›

How to Invest $10,000: The 11 Best Things to Do With Your Money
  1. Build Up Your Emergency Fund.
  2. Stash It In a High-Yield Savings Account.
  3. Pay Off Your High-Interest Debt.
  4. Invest In Mutual Funds or ETFs.
  5. Get the Full 401(k) Match from Your Company.
  6. Max Out an IRA.
  7. Max Out an HSA (and Save on Taxes)
  8. Open a 529 Plan for Your Kids.

How do rich people invest? ›

Millionaires have many different investment philosophies. These can include investing in real estate, stock, commodities and hedge funds, among other types of financial investments. Generally, many seek to mitigate risk and therefore prefer diversified investment portfolios.

How much does the average American have in savings? ›

How much does the average household have in savings? While the median bank account balance is $5,300, according to the latest SCF data, the average — or mean — balance is actually much higher, at $41,600.

How can I increase my 10k in a month? ›

  1. How to earn $10k a month by opening an Etsy shop. ...
  2. Flip items from flea markets to earn $10,000 a month. ...
  3. Sell printables online. ...
  4. Become a virtual assistant and make 10k in a month. ...
  5. Create a course on Teachable and earn $10k a month online. ...
  6. How to earn $10,000 a month by starting a blog.
Jan 19, 2023

How to flip 20k fast? ›

The Best Ways To Double $20,000
  1. Invest In Real Estate. One of the best ways to double 20,000 dollars is to invest in income-generating real estate. ...
  2. Start An Online Business. ...
  3. Invest In Stocks & ETFs. ...
  4. Invest In Small Businesses. ...
  5. Start A Service-Based Business. ...
  6. Try Crypto Investing. ...
  7. Retail Arbitrage. ...
  8. Lend Out Your Money.
Mar 2, 2023

What is the #1 safest investment? ›

For example, certificates of deposit (CDs), money market accounts, municipal bonds and Treasury Inflation-Protected Securities (TIPS) are among the safest types of investments.

What is the safest investment with the highest return? ›

Here are the nine best safe investments with high returns:
  • High-yield savings accounts.
  • Certificates of deposit.
  • Money market accounts.
  • Treasury bonds.
  • Treasury Inflation-Protected Securities.
  • Municipal bonds.
  • Corporate bonds.
  • S&P 500 index fund/ETF.
6 days ago

Where can I invest 1000 dollars for a quick return? ›

Here are nine top ways to invest $1,000 and the key things to know about them.
  • Buy an S&P 500 index fund. ...
  • Buy partial shares in 5 stocks. ...
  • Put it in an IRA. ...
  • Get a match in your 401(k) ...
  • Have a robo-advisor invest for you. ...
  • Pay down your credit card or other loan. ...
  • Go super safe with a high-yield savings account.
Feb 1, 2023

What is a good amount of cash to keep on hand? ›

Carry $100 to $300

“We would recommend between $100 to $300 of cash in your wallet, but also having a reserve of $1,000 or so in a safe at home,” Anderson says. Depending on your spending habits, a couple hundred dollars may be more than enough for your daily expenses or not enough.

How much do millionaires hold in cash? ›

Studies indicate that millionaires may have, on average, as much as 25% of their money in cash. This is to offset any market downturns and to have cash available as insurance for their portfolio. Cash equivalents, financial instruments that are almost as liquid as cash.

How much cash should you have in your bank? ›

A long-standing rule of thumb for emergency funds is to set aside three to six months' worth of expenses. So, if your monthly expenses are $3,000, you'd need an emergency fund of $9,000 to $18,000 following this rule. But it's important to keep in mind that everyone's needs are different.

What business can I start with $10,000 dollars? ›

After I graduated college, I had the idea of starting a small business, but there was just one problem: the only money I had was a couple thousand saved up from my part-time job.
  • eCommerce business. ...
  • Home staging. ...
  • Hair styling. ...
  • Massage therapy. ...
  • Party and event rentals. ...
  • Childcare services. ...
  • Digital marketing agency. ...
  • Moving.
Nov 10, 2022

What is the smartest thing to do with 100K? ›

Many seasoned investors will argue that the best investment for 100K is in real estate. Instead of putting your money into intangible assets such as stocks or retirement accounts, investing in real estate allows you to invest in real property.

How can I turn 100K into a million fast? ›

There are two approaches you could take. The first is increasing the amount you invest monthly. Bumping up your monthly contributions to $200 would put you over the $1 million mark. The other option would be to try to exceed a 7% annual return with your investments.

What's the best way to invest $5000 to make money? ›

  • Invest in Your 401(k) and Get Employer Matching Dollars. ...
  • Pay Off High-Interest Debts First. ...
  • Use a Robo Advisor. ...
  • Invest in High-Quality Dividend Stocks. ...
  • Create a Diversified Portfolio Using Buckets. ...
  • Fund a 529 Plan for Your Child's (or Other Relative's) College Education. ...
  • Invest in International Bonds With Higher Yields.
Jan 20, 2023

How can I invest $50000 for a quick return? ›

Here are ten ways to invest 50k.
  1. Invest With a Robo Advisor. One of the easiest ways to start investing is with a robo advisor. ...
  2. Individual Stocks. Individual stocks represent an investment in a single company. ...
  3. Real Estate. ...
  4. Individual Bonds. ...
  5. Mutual Funds. ...
  6. ETFs. ...
  7. CDs. ...
  8. Invest in Your Retirement.
Feb 23, 2023

Where do wealthy put their money? ›

No matter how much their annual salary may be, most millionaires put their money where it will grow, usually in stocks, bonds, and other types of stable investments. Millionaires put their money into places where it will grow such as mutual funds, stocks and retirement accounts.

What do the ultra wealthy buy? ›

What Are 11 Crazy Expensive Things Rich People Buy?
  • Tickets to outer space. ...
  • Private islands. ...
  • Superyachts. ...
  • Renting celebrities. ...
  • Gold/expensive bathroom accessories. ...
  • Kopi Luwak Coffee. ...
  • Random auction items. ...
  • (Very) expensive parties.
Feb 24, 2023

What do billionaires invest in the most? ›

Real Estate

It should come as no surprise that one place billionaires keep their money is in real estate.

How much does the average 70 year old have in savings? ›

How Much Does the Average 70-Year-Old Have in Savings? According to data from the Federal Reserve's most recent Survey of Consumer Finances, the average 65 to 74-year-old has a little over $426,000 saved. That's money that's specifically set aside in retirement accounts, including 401(k) plans and IRAs.

What percentage of Americans have $10 K in savings? ›

Between 1959-2022, the average U.S. savings rate has been 8.96%. The average household savings rate in the U.S. was only 5.1% in the second half of 2022.
58% of Americans have less than $5,000 in savings.
Average savings amountShare of Americans
2 more rows
Feb 16, 2023

How much does the average retired American have in savings? ›

On average, Americans have around $141,542 saved up for retirement, according to the “How America Saves 2022” report compiled by Vanguard, an investment firm that represents more than 30 million investors. However, most people likely have much less: The median 401(k) balance is just $35,345.

Where can I put my money to gain the most interest? ›

Certificates of deposit (CDs) are available through most banks and credit unions. Like savings accounts, CDs are FDIC-insured, but they generally offer a higher interest rate, especially with larger and longer deposits.

Where is the safest place to put your money right now? ›

U.S. government securities–such as Treasury notes, bills, and bonds–have historically been considered extremely safe because the U.S. government has never defaulted on its debt. Like CDs, Treasury securities typically pay interest at higher rates than savings accounts do, although it depends on the security's duration.

Where is the best place to put cash right now? ›

Where to Stash Your Cash Now
  • High-paying money market accounts. These are great options if you want to earn more but also want immediate access to your cash, such as by writing a check. ...
  • High-yield savings accounts. ...
  • Certificates of deposit (CDs) ...
  • U.S. Treasury bills. ...
  • Treasury Inflation Protected Securities (TIPS)
Feb 2, 2023

Where is the smartest place to put your money? ›

The 12 Smartest Places to Stash Your Money
  1. Checking account. If you need money to cover short-term expenses, a checking account is the right place to put it. ...
  2. High-yield savings account. ...
  3. Money market deposit account. ...
  4. Money market funds. ...
  5. Treasury bonds, bills, or notes. ...
  6. Certificates of deposit. ...
  7. 401(k) ...
  8. IRA.
Oct 13, 2020

Where can I get 7% interest on my money? ›

7% interest isn't something banks offer in the US, but one credit union, Landmark CU, pays 7.50% interest, though there are major requirements and stipulations.

Where do millionaires keep their money? ›

Where do millionaires keep their money? High net worth individuals put money into different classifications of financial and real assets, including stocks, mutual funds, retirement accounts and real estate. There were 24.5 million millionaires in the U.S. in 2022.

Who has the highest paying CD right now? ›

Best 1-Year CD Rates:
  • Limelight Bank - 5.00% APY.
  • Rising Bank - 5.00% APY.
  • Bread Savings - 5.00% APY.
  • Home Savings Bank - 5.00% APY.
  • Popular Direct - 5.00% APY.
  • Synchrony Bank - 5.00% APY.
  • Chevron Federal Credit Union - 5.00% APY.
  • Spectrum Federal Credit Union - 5.00% APY.

Where can I get 10 percent interest on my money? ›

How Do I Earn a 10% Rate of Return on Investment?
  • Invest in Stocks for the Long-Term. ...
  • Invest in Stocks for the Short-Term. ...
  • Real Estate. ...
  • Investing in Fine Art. ...
  • Starting Your Own Business (Or Investing in Small Ones) ...
  • Investing in Wine. ...
  • Peer-to-Peer Lending. ...
  • Invest in REITs.
Mar 8, 2023

Where can I get 5% interest on my money? ›

Best 5% Interest Savings Accounts
  • Varo: 5% up to $5,000.
  • UFB Direct: 5.02% on your entire balance.
  • Current: 4% up to $6,000.
  • NetSpend: 5% up to $1,000.
  • Digital Federal Credit Union: 6.17% up to $1,000.
  • Blue Federal Credit Union: 5% up to $1,000.
  • Mango Money: 6% up to $2,500.
  • Landmark Credit Union: 7.50% up to $500.
Mar 7, 2023

What is the safest investment with highest return? ›

Here are the nine best safe investments with high returns:
  • High-yield savings accounts.
  • Certificates of deposit.
  • Money market accounts.
  • Treasury bonds.
  • Treasury Inflation-Protected Securities.
  • Municipal bonds.
  • Corporate bonds.
  • S&P 500 index fund/ETF.
6 days ago

Where do you put cash during inflation? ›

What are the best investments to make during inflation?
  • Real estate. Real estate is almost always an excellent investment and should be at the top of your list. ...
  • Savings bonds. ...
  • Stocks. ...
  • Silver and gold. ...
  • Commodities. ...
  • Cryptocurrency.
Jan 24, 2023

Where are three places to stash your cash? ›

3 Good Places to Stash Your Cash
  • High Yield Savings Account. • Pros: A higher interest rate than most savings accounts, with FDIC insurance. ...
  • Money Market Account (MMA) • Pros: A higher interest rate than many savings accounts, with the flexibility of check writing, plus FDIC insurance. ...
  • Certificate of Deposit (CD) •
Sep 14, 2022

Where can I put lazy money? ›

Where Should You Put Your Lazy Money
  • Checking and Savings Accounts.
  • High-Yield Savings Accounts.
  • Certificates of Deposit (CDs)
  • Short, Intermediate, and Long-Term Bonds.
  • Stocks.
  • Foreign Stocks and Bonds.
  • Conclusion.
Oct 12, 2016

What is the best thing to do with a lump sum of money? ›

Cash savings are always popular with people who want to put away a lump sum and earn interest over a long period of time. This can be a very good way to save for things, without taking on bigger levels of risk. Savings accounts are much safer, but how much interest you earn will come down to your bank's interest rate.

What is the best investment right now? ›

7 Best Types of Investments in 2023
  • High Yield Savings Accounts.
  • Short-Term Certificates of Deposits.
  • Short-Term Government Bonds Funds.
  • S&P 500 Index Funds.
  • Dividend Stock Funds.
  • Real Estate & REITs.
  • Cryptocurrency.
Feb 3, 2023


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