$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.
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1. Open a high-yield savings account
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 (5.00% APY (as of May 3, 2024)) and traditional banks like Citibank (4.45% APY (as of Dec. 5, 2023)).
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2. Convert your spare room into an Airbnb rental
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.
3. Invest with a real estate investment trust (REIT)
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.
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4. Invest in dividend-paying stocks
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.
5. Open an individual retirement account (IRA)
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.
6. Look into U.S. Treasury bonds
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.
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7. Put some money into a CD
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.
8. Pay off your student loans
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.
9. Pay off your credit card debt
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.
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10. Invest in your own low-stakes, hobby-based business
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
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.
Money tips that can work for everyone
No matter what your bank account balance is, there's always an opportunity to optimize and improve your finances. Here's a quick checklist of things you can look at today.
Focus on paying off your debt . Debt can hold you back from making progress with your overall financial well-being. Aside from cutting expenses, there are tools that can help you pay off debt faster like balance transfer credit cards and debt counseling.
Earning extra income can give you breathing room. If finances are tight, earning some extra money to supplement your income can make a huge difference. A new job is one option to consider, but if you're not ready to make a big change or already retired, a part-time side job could be a better choice.
Cut your expenses. It sounds painful and so not fun, but it doesn't have to be. Take a look at your biggest expenses because that's where you'll probably find the biggest savings. For example, auto insurance rates have been soaring so shopping around for a new insurance company can be the fastest way to cut your bill. Also, look for ways to cut your grocery bill (despite rising inflation).
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