So I was given the biggest Christmas gift of my life yesterday, a check for 10,000 dollars. I’d like to find a way to safely grow this money, if anyone has any advice at all, or literature to read, I’d really appreciate the help, or tips.
What’s the safest way to grow 10,000 dollars?
byu/bucket_of_dogs inpersonalfinance
Posted by bucket_of_dogs
19 Comments
Safest is a HYSA but where it goes should depend on how much you have otherwise
Personally tho I’d leave a bit to get whoever got you the gift a nice meal
Same day parlay, you could turn that 10k into 100M just gotta believe.
In all seriousness while you’re researching put the 10k into a high yield savings (HYS) bank, there are a bunch but will give you about 3.5-4% interest so 10k is $350/400 a year. Then you just dig into possible investment options, the standard option is an ETF with low expense ratio (they charge you some % per year to manage the etf so lower fee is better).
Could put it into an IRA as Roth, 7k max per year. You can take out whatever YOU put inside with no penalties, but any gains it makes inside gets taxed/penalized, so just store 7k in there and take it out if you really need it but honestly just treat it as a retirement fund
Another option is to just keep it in HYS as emergency savings,
First off congratulations!
Secondly, it would help if we knew more about your financial situation. Do you have a lot of outstanding debts? Do you have a job? If so what’s your salary? What are your goals for retirement? How risky are you willing to go with investments? These will help folks direct you down the right paths.
If you just want savings, not investments, to insure this money will never be lost, then you are looking at either a high yield savings account, or high yield CD for like an 11 month term.
These options should grow your account by like $350-$400 / year in earned interest.
If you can stomach a little risk, you can most likely return about $700/ year from medium risk corporate bonds. If you reinvest the coupon payments, these will grow quickly.
Outside of these savings strategies, you begin to enter money markets and investments. And with unethical .ese you can earn 9-15% returns year over year, but you expose yourself to market risks. The current market might not be great right now, but it may also be the best time to invest before things turn around. You may lose quite a bit before that happens.
Place the $10K in a high Yield Saving account. You can earn up to 4.20% APY. I have one with OpenBank by Satandeer, but there are others. Pretend you don’t have this money and continue to add funds monthly until you have a comfortable stash for any emergency or something you would need down the road. Set a goal to grow it to $30K, then $50K. Always pretending you don’t have it. Be frugal. Once you hit your savings goal begin investing, but continue to have that emergency stash. This develops an important muscle. Whereas your friends may be living above there means, you will have a nice stash to handle almost any conceivable emergency. 90% frugal 10% splurge. As you gain more wealth you can splurge a little more but always ensure the frugality outweighs splurge.
Safest is not always best. If you’re going to spend it in the next five years or you need it for your emergency fund, put it into a high yield savings account. The interest should be at least 3.5% at current rates. If you already have an emergency fund and won’t need it in the next 5 years but will need it before retirement, put it in a taxable brokerage account and invest it in a low cost index fund like voo, vt, or vti. If you are saving it for retirement, use it to max out a roth IRA for the year and put the rest in a taxable brokerage account, again investing in something like voo, vt, or vti.
If you said a little more about your financial goals and timeframe it would be helpful. Are you investing for retirement, something in the next year, or something in between?
Assuming you’re a young person, I’d echo like other users, $7500 into Roth IRA with VTSAX while invest $2500 into VXUS at a brokerage account. Just chill and let them grow
Read the simple path to wealth by jl collins
The wiki here is great!
The [prime directive](https://www.reddit.com/r/personalfinance/wiki/commontopics/) is how to handle money.
Check the windfall section in the sidebar info.
You don’t provide enough info for a real response…I will say best way to grow wealth at a younger age investing in yourself to get better paying job.
But truly if you want more accurate responses update with details…job, salary, debt, rent, age, kids, etc.
It depends how you define “safest”. For example, highest chance of consistently having a >0% return and highest chance of reaching $a after b years are going to have completely different answers. You might start by asking what are your financial goals and time horizon (how long before you spend it)?
OP, we need to know a little bit more about you such as age, living situation, any debt, income, etc
10-10-5 N, P, K. Good drainage. Wait to water until the soil moisture is low. Don’t expect fruit the first year.
Go for some index funds for safe. What else are you gonna do with more money than you have ever had… Invest it wisely. Don’t spend it. I would say play it aggressively if you are young and double your money every two years. If it were me, I would plunk that 10k into Altria stock, symbol MO, and reinvest the dividends. Sit back and watch that 10k grow every quarter. I did that with about $17k last year. They have a 7% dividend and reinvest it. Plus I’m up 19% over last year. Energy Transfer is a decent price and has a really nice dividend. I have about $30k with them.
Buy all the discounted LEGO sets at the target on Scranton.
When I say the word flowchart, the Auto Mod should respond to my comment with a link. I highly recommend checking it out, it’s a super-handy one-stop shop for this and every other time the question arises of “What should I do with my money?”
Stick it in a high yield savings account for safely growing. You can also stick it in ETFs like VOO/VT/VTI. Other companies have similar options, but I prefer Vanguard due to low fees. If you don’t need the money until you retire then stick it in a Roth or regular IRA depending on your income level.
Head over to r/bogleheads .
But a good bet is to invest in the s&p500 or VTSAX. Either in a retirement account like an IRA (you need to have an income) or a taxable account (no income required).