How To Invest $10K or Less

Whether you’re new to the process or think you don’t have enough money, consider these options for investing.

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Many don’t invest because they feel like they can’t afford to, not to mention feeling overwhelmed by choosing an investment vehicle. However, there are options that can make your money work for you, and they just might be simpler than you expected.

Investment options

Whether you have $10,000, or much less, in the bank, here are 10 investment options to consider:

  1. Mutual funds
  2. Exchange-traded funds
  3. CDs
  4. Real estate investment trusts
  5. Money market accounts
  6. Roth IRAs
  7. High-yield savings accounts
  8. Brokerage accounts
  9. Fractional Shares
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Mutual funds and exchange-traded funds

Mutual funds and exchange-traded funds (ETFs) function similarly but also have some key differences when it comes to how you use them.

What is a mutual fund?

A mutual fund is an effective way to outsource your investment money to a team of professionals. They’ll spread out your investments across a diverse portfolio of stocks, bonds and more. Though they’ll make their recommendations based on your age and the amount of money you’re able to invest, you’ll decide how much risk you want to incorporate into your investment strategy.

Mutual funds can be a great vehicle for investors who are just beginning their journey, as most of the strategy is handled by the money managers while you earn passive income. Although there are mutual funds with no minimums, most mutual funds require a minimum investment of generally $500 to $5,000, depending on the manager and service.

What is an exchange-traded fund?

Exchange-traded funds give you slightly more autonomy and agility with your investments. While mutual funds stay locked until the end of trading hours, ETFs allow you to buy and sell stocks throughout the day. This allows you the flexibility of individual securities while also granting you the diversity of a professionally managed portfolio. There are also some tax benefits for ETFs compared to mutual funds.

For those wanting a more hands-on experience with their investment, ETFs are a great way to start. Unlike mutual funds, there is no minimum dollar amount to begin. Instead, you just need to purchase at least one stock.


CD stands for certificate of deposit. It’s a savings product that’s similar to a savings account, but it allows you to earn on investments more aggressively. You’ll invest a set amount; the CD will lock; and you won’t be able to access those funds (without penalty) until a previously chosen, fixed amount of time has passed. This makes a CD another method for passive income.

While you might not earn as quickly with a CD as you would with a mutual fund or ETF, CDs may be more suited to those who are risk averse. If you aren’t in hurry to earn, and you value stability, CDs may be a valuable asset to you as a new investor. Plus, most only require $500 to $1,000 to start, making CDs a viable option for many beginners.

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Real estate investment trusts

For those who want to expand beyond publicly traded stocks or mutual funds, a real estate investment trust (REIT) might be the way to go.

REITs are companies that own real estate ranging from malls and apartment buildings to hotels and more. There are generally three types to choose from:

  • Equity REITs function much like a landlord. They own and manage the maintenance of the property, collect rent checks and more.
  • Mortgage REITs function differently from equity REITs. Instead of owning the property itself, they own the debt securities—such as when a mortgage company sells an individual’s mortgage to another company to manage. An individual owns and manages the property, but your investments earn as the company collects on the mortgage.
  • Hybrid REITs function as a combination of equity REITs and mortgage REITs for a more diverse portfolio.

If you’re interested in starting an REIT, expect to need at least $1,000 to $2,500 for the investment.

Money market accounts

A money market account is essentially the combination of a checking account and a savings account. But unlike most checking and savings accounts, money market accounts typically require higher minimum balances.

A money market account functions much like a savings account in that you can earn interest, but the benefit is that the interest rates are generally higher for money market accounts than they are for savings accounts. The more money you’re able to put in, the more interest you’re qualified to earn. A money market account also allows you quick access to your funds, much like a checking account does.

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Roth IRAs

With Roth IRAs, the options are nearly unlimited, providing an exciting entrance into the investment world. On its own, a Roth IRA is really just a standard savings account, but you add value to it with the type of investment you chose to put inside of it.

You could put real estate, stocks, bonds, gold, cryptocurrency or more into it and begin earning for retirement. You can open a Roth IRA at any age, though you should speak with a financial advisor about how much to contribute, as there are limits based on your marital status and annual income.

If you meet the requirements for a qualified withdrawal, you can make tax-free withdrawals from your contributions with no penalty. Consult with your financial advisor before doing so, as it may be beneficial to leave that money in the Roth IRA for future earning potential. It all depends on your stage of life and personal needs at the moment.

Another reason a Roth IRA is a great for investment option for beginners is that there is no minimum amount required to get one started.

High-yield savings accounts

If you have money invested in the market, then you’ll want to have other accounts to fulfill your more immediate goals as your portfolio appreciates in value. A high-yield savings account is an effective way to do this. While traditional savings accounts tend to have lower interest rates, high-yield savings accounts are structured with more earning power.

Most high-yield savings accounts are available through online banks. These banks take the money that would otherwise be spent on a brick-and-mortar location and allocate it to their customers. This is how the interest rates are able to perform more favorably for account holders.

There is generally no set minimum amount to start a high-yield savings account, so you can base your deposits on monthly living expenses. Depending on your goals, you could deposit one to three months’ worth of living expenses and then see the return on your investment.

Brokerage accounts

A brokerage account is an investment account in which you can invest in stocks, bonds, mutual funds and other financial tools to save for short-, mid- or long-term goals. This makes them advantageous for a wider range of goals than just retirement, whether those might be saving for a down payment on a house, paying off student loans, saving for family growth, saving for a wedding or more.

Another benefit is that you don’t have to wait until you retire to access these funds, and you can make as many withdrawals as needed. But remember that this money will be taxed, unlike the funds in a Roth IRA.

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Fractional Shares

Fractional shares can be a great way to enter the investment world. They allow you to purchase a fraction of a share, rather than a whole one, resulting in a fraction of the cost.

You will have to buy and sell through a major brokerage, but the low cost will give you some flexibility as you learn what kinds of stocks you may want to invest in based on your interests, goals and bandwidth.

However, new investors should be mindful of how many fractional shares they’re managing. If the investment is a loss, it can feel minor. But, over time, those small losses add up. By the same token, small gains can also add up and help you develop a robust portfolio.

Investment strategies

When considering a financial strategy, you may want to think about investing in several different vehicles. As you’re brainstorming, ask yourself these questions:

  • What are my financial goals?
  • Do I want to save for the short, mid or long term?
  • What kind of diversification do I want for my investments?
  • How comfortable am I with investment risk?
  • How much stability do I need from my investments?
  • What is my retirement plan?
  • How important is paying off my student loans?
  • Do I want to consult a financial pro?

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