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How to invest 10,000 dollars

    • 1). The first question you need to ask yourself before investing the $10,000 is when will you need the money. Those who need the money very soon should certainly look into a short term CD or a simply money market savings account. These are very safe and can yield a decent percentage.

    • 2). The second question you need to understand is what place you are at in your life. If you are near retirement bonds and or certificates of deposit are a good idea for you. If you are very young and have time to wait out the investments, equities are a good investment. Invest in a solid low cost mutual fund or some high quality large cap stocks.

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      No matter your age, before investing your $10,000 you must understand your risk tolerance. Please understand that the stock market is very volatile and there is no guarantee you will make money. If you cannot stomach the ups and downs of the market then you should steer clear of stocks no matter your age. If you are more risk seeking then more speculative stocks and funds are probably fine for you.

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      Roth IRA's are a great way to build a nest egg

      Are there any investments that are great choices for your $10,000 no matter your situation? Yes, the single best one I would advise everyone to make is to open a Roth IRA. A Roth IRA allows you to take your money out tax free, so there are huge benefits.

    • 5). If your employer offers a nice 401k matching plan, use the $10,000 to max out your 401k plan every year. The matching amount they give you is equal to free money, and you should never turn that down when given the opportunity!

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