How to Invest $10k in 2022 (4 Simple Steps)

Last updated on July 5, 2022

What are you going to do with $10,000?

Maybe you want to save for a down payment on a house. Or maybe you’re saving up for retirement. Whatever the case may be, how will that money grow if it’s just sitting in your bank account?

You often hear the term “time is money.” And how true that can be. The more time your money is invested, the more it has the chance to grow and the less risk you carry.

In this post, I will outline the 4 simple steps on how to invest $10k in 2022 and what you can do to start growing your money.

Let’s get started.

1. List your goals

When you’re trying to figure out how to invest $10,000, the first step is figuring out what your goals are.

Are you saving for a down payment on a house? Are you looking to retire early? Whatever your goals may be, it’s important to write them down and have a plan of action.

That way, when it comes time to invest that money, you’ll have a target in mind. So take some time and think about what you want to achieve financially within the next few years.

Your next step is figuring out how that money will grow.

Break down the goal into manageable parts so you can start creating a plan of how to achieve it.

For example, if your goal is to save for a down payment on a house, how much do you need that money to grow?

That’s the first step.

Once that has been established, how long will it take for you to reach your goal of saving $20k, for example?

This is important since if our goal is to grow $20k in five years, you would invest differently than if you had a goal of growing $20k in one year.

Now that you have your goals written down, it’s time to move on to figuring out how much risk you’re willing to take.

When you’re investing, there are two types of risks:

  • Risk of losing money
  • Risk of not making enough money

The first risk is pretty self explanatory. You could lose some or all of your investment if the company or asset you’ve invested in doesn’t perform.

The second risk is a little less understood, but it’s basically the risk of not making as much money on your investment as you could if you had chosen a different option.

For example, if you invest in a company that is doing well, you have the potential to make a lot of money off of your investment. However, there is also the chance that the company goes bankrupt and you lose everything.

On the other hand, if you choose to put your money into a savings account, over time that $10,000 will grow at a set rate (usually around 0.01-0.05% per month).

While this growth isn’t amazing, it’s guaranteed and you won’t lose any of your initial investment.

You need to weigh what kind of risk is required for the type of results you want.

So how do you figure out how much risk you’re willing to take?

There are a few different ways, but the easiest way is how comfortable you’d be if your money was completely lost.

The lower that number is, the less likely it will actually happen. But since there’s always some chance of losing all of your investment (even when choosing low-risk investments), how would you feel with no savings account for emergencies?

For most people, their emergency funds are what they use in case something unexpected happens and they don’t have enough saved up in their checking or savings accounts to pay for it.

So how much do you need saved up before investing your next $10,000?

That might just depend on how big of an emergency fund you currently have, how much you’re looking to invest, and how likely it is that an emergency will happen.

Now figure out how long your money needs to be invested.

Over the last century, 10% has been average annual returns on stocks (source).

While that’s not guaranteed to happen every year (or even during your lifetime), it does give you a good idea how much will be earned on average by investing in the stock market.

So how long do you want your $10,000 invested for?

Picking a time horizon is important because it will help us narrow down our options and figure out how much risk we’re willing to take.

Now that you know how much time you have to invest, how much risk you’re willing to take, and how much money you need to make on your investment, it’s time to pick an investment.

2. Review your investment options

Once you know how much money you want to invest, how long you have to invest it, and how much risk you’re willing to take, it’s time to review your investment options.

There are a lot of different investments out there and they all have their own risks and rewards.

Some common types of investments include:

  • Stocks
  • Bonds
  • Mutual funds
  • Index funds
  • ETFs (Exchange Traded Funds)
  • Real estate
  • Cryptocurrency & NFTs

Each one has its own unique set of risks and rewards that make them more or less suitable for certain people.

For example, if you’re looking for a short term investment with low risk, buying government bonds is the safest option. However, if you’re looking to invest long term, the stock market is likely your best bet.

With that in mind, how would you feel if you invest $10,000 for 20 years?

What risks are you willing to take and how much time do you have available to make good decisions? How comfortable are you with losing all of your money if something goes wrong?

To keep things simple let’s start by deciding whether or not stocks seem like a good option for this kind of investment. The answer might vary depending on who you ask; there isn’t one single right answer when it comes to stocks.

But, on average, if you were to invest in the stock market and hold onto those stocks for 20 years you can expect an average return of around 10% per year.

Plus, there are ways to limit your risk even further by investing in safer stocks or picking index funds that focus on low-risk investments.

So how does this compare to our other options? Real estate is another option that often comes up when people are looking to invest money.

While it can be a great investment choice, it also has a lot more risk associated with it than the stock market. And unlike stocks, real estate doesn’t always have the potential to go up in value.

Cryptocurrencies are another investment option that comes with a lot of risks. The price of Bitcoin and other cryptos can be incredibly volatile, meaning you could lose a lot of money very quickly if you’re not careful.

That’s not to say they’re bad investments – just that they’re not right for everyone.

So how does this all add up? Given most people’s time horizon, investing in stocks seems like a good option to start because it has the potential to give you an average return of around 10% per year.

But remember, this is just an average and there’s no guarantee you’ll make that kind of return.

Now that you’ve picked an investment type, it’s time to do your own research on which specific stocks, bonds, real estate, or cryptos to buy.

3. Research your investment options

There are a lot of resources out there that can help you learn how different investments work and how to pick the right ones for your goals.

If you’re looking for something simple, buying stocks directly through an investment platform like Robinhood or M1 Finance will do the trick.

Once you’ve decided what type of investment to make, it’s time to start researching specific options.

This can be done in a lot of different ways, but one of the best is to look at how other people have performed with that investment in the past – whether it’s stocks, crypto, or real estate.

Ultimately, you’ll want to read as much as you can about the specific investment.

If you don’t feel confident picking your own stocks or doing heavy research, putting money into index funds or ETFs is one of the safest, and potentially most profitable ways to invest.

Index funds and ETFs are a type of mutual fund that tracks an index, such as the S&P 500.

This means that when you invest in an index fund or ETF, you’re buying a small piece of all the stocks that are included in that index.

Since they’re passively managed, these funds don’t require as much research or attention as picking individual stocks.

And, since they track an index, you can expect the price of these investments to move in line with how their respective indexes are performing rather than how a single stock is doing.

Ultimately, how much time and energy you want to put into researching your specific investment options should play into the type of investment you choose.

4. Follow through and track your investments

Putting money into different investments and not following through with them can mean you’re missing out on potential returns.

That’s why it’s important to set up a system where you’re regularly tracking your investments and making sure they’re still in line with your goals.

This could be something as simple as setting aside 30 minutes each month to review how your investments are doing or creating a spreadsheet that tracks how much money you’ve put into which investment, how much you’ve made back, and what the current value of those investments is.

No matter how you do it, make sure you have some way of keeping track of your investments so you can course correct if needed.

How much you make on your investments is going to depend a lot on how long you’ve held them for.

That’s why it’s important to be patient and not jump at the first sign of returns – or worse, sell when things aren’t looking good.

You should only part ways with an investment if it’s no longer in line with your goals.

On average, you should expect to hold onto investments for at least five years – which is how long most people are investing for anyways.

When it comes to growing your money, how you invest $10,000 is going to vary depending on a number of factors.

But, if you’re looking for a general guideline, investing in stocks, bonds, real estate, or cryptos is the best way to go.

Each option has its own benefits and drawbacks.

Stocks and index funds, for example, are a great way to make money – but they can also be risky.

Real estate is less risky, but can take a while to see any real profits.

Cryptos are relatively new, so you’re going to need a lot of research and time before you see any significant returns.

And, investing in bonds is one of the safest options, but you’re not going to see the same returns as you would with some of the other options.

No matter which option you choose, how you invest $10,000 depends on YOU.

If you follow this guide and do your research, you should be well on your way to building a successful investment portfolio.

How to invest $10k: Summary

So there you have it – four simple steps for how to invest $10k in 2022.

Of course, this isn’t the only way to invest and there are plenty of other options out there. But these are the ones that have shown to be effective for most people in a lot of different situations.

Now it’s up to you how much time and energy you want to put into researching your investment options, how many hours or days per week you want invest in managing your investments, and how quickly or slowly you plan on growing that initial $10,000.

Get started with M1 Finance today and start investing in your favorite stocks and index funds.

You can also get started with Coinbase today and start investing in your favorite cryptocurrencies.

Are there any important investments missing from this guide? What is holding you back from starting to invest? Reach out and let me know.


I’m not a certified financial planner/advisor nor a certified financial analyst nor an economist nor a CPA nor an accountant nor a lawyer. I’m not a finance professional through formal education. I’m a person who is enthusiastict about researching and sharing financial education. The contents of this article are for informational and entertainment purposes only and does not constitute financial, accounting, or legal advice. I can’t promise that the information shared on my posts is appropriate for you or anyone else. By using the information in this article, you agree to hold me harmless from any ramifications, financial or otherwise, that occur to you as a result of acting on information found on this site or article.

Last updated on July 5, 2022

Money Peoples is reader-supported. Disclosure. When you sign up through links on this post, we may receive compensation at no cost to you. This site is for informational purposes only and is not intended to provide financial advice.

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Money Peoples

Money Peoples is a free resource for anyone looking to make an income in the gig economy. Whether it’s helpful guides, reviews, or tools, we share firsthand experience and rigorous research on the best ways to make money in the gig economy.
Money Peoples is reader-supported. Disclosure. When you sign up through links on this post, we may receive compensation at no cost to you. This site is for informational purposes only and is not intended to provide financial advice.

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