Are you looking to turn 10k into 100k?
There are many types of investments you can make to grow your money and build wealth. But which one's are right for you?
In this post, I'll explore how to turn 10k into 100k, some of the best investments to make, how long it can take to 10x your money, and much more. Let's get started!
Best Ways to Turn 10K into 100K
Below are some of the best investments to grow your money. Whether you choose real estate investing, treasury securities, or building a portfolio of stocks – the first step is to get started to make more money!
Invest in Index Funds
The stock market can be an excellent way to turn 10k into 100k in a few years time.
By utilizing index funds you can maximize your returns while also limiting risk. Index funds are a group of stocks that track an entire index like the S&P 500.
Index funds have performed historically well returning around 8% each year to investors and you don't need a financial advisor to get started.
By investing in index funds you'll get the benefits of a well diversified portfolio with low fees that has relatively little risk in the long term.
To get started, I recommend using a robo advisor like Stash. This easy to use investing platforms allows you to trade stocks and invest your money with ease. As a bonus, you'll get $5 free to invest when you register with the link below!
If you're looking for a more traditional way to invest you might consider a brokerage firm to buy and sell your investments.
Invest in Mutual Funds
Mutual funds are another brilliant way to make money from your investments and build wealth.
A mutual fund can be thought of as a group of stocks and investments that can easily be purchased or sold via the stock market.
When compared to index funds or ETFs – mutual funds tend to have higher fees because they are actively managed portfolios. However, many of these fees are typically offset by the stronger performance of the fund.
Mutual funds are a great way to grow your initial investment without significant risk. You can always check the performance of the fund before making any investment. This can help you to vet the fund managers to see if they routinely beat the market or not.
Just like with index funds, you can use a variety of investing platforms like Stash or Acorns to get started.
Invest in ETFs
Exchange traded funds, or ETFs, are very similar to mutual funds but the fees tend to be somewhat lower.
Because ETFs are not actively managed portfolios they have lower fees than other options making it one of the best investments to make passive income.
Because of the diversity in an ETF, you won't have to spend hours doing research or growing your knowledge about companies to invest in and they have low risk.
If you're looking for an investment that is easy to grow your money, ETFs are a great option.
Want to start investing in ETFs? Register with Stash below to get started!
Invest in Dividend Stocks
Dividend stocks are an awesome method to take advantage of compound interest and make more money.
In fact, some people make a living by trading stocks.
To get started you can use a robo advisor like Acorns to round up every dollar you spend and invest it automatically for you. Register below to get started!
Dividend stocks are quite simple to understand. Whenever a company makes a profit they can choose to reinvest their profits into the company or disperse the profits to investors through a cash dividend.
Dividend stocks tend to be more mature companies in lower growth stages as they don't need the capital to continue to grow.
Retirement Investment Accounts
Investing in retirement accounts like a Roth IRA or 401(k) is an exceptional way to build wealth while limiting your tax bill.
Whenever you buy and sell stocks or other investments, you'll be forced to pay taxes on them. Depending on the duration you held them for it can be long term capital gains or short term capital gains.
Accounts like a Roth IRA allow your pre tax income to grow with the market.
A 401(k) has even more tax benefits. No only is the cash you invest pre tax income, but it will also grow tax free. But that's not it! Many employers will match your investment into a 401(k) for an added bonus.
Utilizing retirement accounts is an essential way to invest your money in the market without landing a massive tax bill come April.
Retirement accounts like a Roth IRA can contain any of the above investment types to grow your money. You can buy and sell your investments as you wish.
Invest in Real Estate with Fundrise
For those who want to invest in real estate with a lower risk level – using crowdfunded real estate is a great option.
With this investment you'll be grouped with other investors to purchase large real estate assets that make money.
Your returns with crowdfunded real estate can be anywhere from 5% to 15% depending on the investment.
Purchase a Rental Property
If you want more control of your real estate investment with the potential for much higher returns, purchasing a rental property is one of the best investments to grow your passive income.
When compared to the income you can make from stocks on wall street – the returns on rental properties can be much larger.
But you'll need some patience to get there. The income from rental properties can take a few years to start growing.
For example, if you purchase a rental property for $200,000 and rent it for $2,000 a month with a mortgage of $1,500 a month you would net an extra $500 a month from your rental.
But that's not the only way you'll make money. In addition, because real estate is an appreciating asset, it will likely go up 2% to 3% annually in value. On the $200,000 property, this can amount to $4,000 to $6,000 per year or $330 to $500 a month.
Another consideration is your rental income. Rents don't typically stay the same for decades. You can often increase the rental price by 1% to 2% per year. This means that in year two, your income could be $2,020 per month while your mortgage stays the exact same.
Now you see how rental properties can be an excellent way to build your passive income. But that's not it!
There are many tax advantages you get with owning a rental property. As mentioned with stocks, you'll have to pay capital gains taxes whenever buying or selling investments. With a rental property you can depreciate your property over the course of 20+ years for tax purposes in addition to many other tax advantages you'll get.
What does this mean?
Your tax bill will be minimal until it comes time to sell the property.
If you want the best investment to grow your money, owning a rental property can be at the top of the list for some.
The downsides of owning a rental property are usually quite obvious. What happens if your tenants stop paying rent? What happens if tenants destroy your property? What happens if you cannot find tenants in the first place? What about major repairs to the home?
All of these are legitimate concerns you should consider before purchasing an investment property.
Related: Real Estate Investing Apps
Start a Blog to Make $100,000
Starting a blog can be a fun way to make $100,000 with less than $10,000 to start.
With this investment, you'll need to dedicate more time to growing your audience and creating content than other investments. You'll want to learn all the tools and resources available to help you at the beginning stages.
Blogs and websites can start making money through a variety of ways. Display ads, affiliate marketing, and online courses are just a few examples of possible monetization methods.
Starting my own blog has been the single best investment I've ever made.
And no – you don't have to be an expert writer to get started. Starting an online business can be done by just about anyone with a passion for the subject.
As your blogging knowledge starts to grow, you'll become more efficient and you'll be capable of making more money.
Aside from the income you make every month from your blog, you can also consider selling it one day for the price you wish.
Start a Business to Turn 10K into 100K
Starting your own business one of my favorite ways to make money and grow your income. Just like a blog or website, making the investment of starting a business will require a mix of time and money to get started.
There are many businesses you can start that are low cost.
For example, starting a power washing business might cost you a few hundred dollars to start but it could make a few hundred dollars of profit in the first month of operation.
Starting a business is unlike other investments in that you'll have significantly more control of your money and how it is utilized.
When compared to investing in the stock market like through a mutual fund, starting a company can be a much more entertaining way to invest. Hopefully the business you start is something that you enjoy doing and is your dream business.
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Use a High Yield Savings Account
If you're searching for a guaranteed way to turn $10,000 into $100,000 no matter how long it will take, a high yield savings account is your best bet.
When compared to other risky investments like cryptocurrency – it's going to take more time for your money to grow.
Investors who are seeking little risk will often dedicate a small portion of their portfolio towards a high yield savings account.
My favorite account is through CIT Bank. This bank account pays more than 5 times the national average. As interest rates rise, utilizing this bank account is a great way to make money while you sleep. Register below to get started!
Invest in Bonds
While bonds aren't the quickest way to turn $10k into $100k – it's a pretty safe investment for your money.
There are several types of bonds you can invest in – each with there own benefits and drawbacks. For example, municipal bonds or other treasury securities can be some of the lowest risk investments you can make and it would be difficult to lose money. However, the returns are subpar.
Interest rates on bonds and bond funds can be low but will depend on market conditions.
Just like a savings account, it's hard to lose money with bonds so most investors will allocate some of their money to them.
Money Market Accounts
Money market accounts are similar to savings accounts or corporate bonds in that they don't have the largest returns, but the are extremely safe.
This investment is a great option for those with a low risk tolerance. You can register for a money market account at many banks.
Certificate of Deposit
A CD is extremely similar to a money market account and can be opened at most banks and is a safe investment.
When compared to other investments like mutual funds or index funds, you won't generate nearly as much income but they are extraordinarily safe.
Flip Items to Make Money
While this is by no means a traditional investment like others on the list, flipping can be a fun and lucrative method to grow your money.
Flipping will require a little cash upfront but you can quickly flip your money so that it grows exponentially.
Related: Flea Market Flipping
How Long Does it Take to Turn $10,000 into $100,000?
Depending on the investment you choose, it can take anywhere from a few months to a decade to grow your money to reach your financial goals.
You'll likely get various pieces of financial advice when it comes to your goals but it's important to remember exactly what your goals are and the lifestyle you desire. For example, you might want to save money instead of investing all of your capital.
Let's go over a few basic scenarios to understand how to turn $10k into $100k.
If you invest your cash in the market via a low risk index fund, you'll see an average return of 8%. As you can see with the chart below, it will take around 30 years to turn $10k into $100k with this method.
However, if you invest your cash into a company that turns a profit you could see an average return of 15% annually. With this scenario, it would take a little under 17 years to reach your goal.
What to Do Before Investing
Before you go investing all of your money to turn 10k into 100k you'll want to complete some of these basic finance principals to manage money the right way.
Pay Down Debts
If you have credit card debt, large student loans, or other high interest debts you'll want to pay them down as much as possible before investing.
Debt can make growing your money a challenge. If you want to turn $10k into $100k – you'll need to craft a plan to reduce your debt as quickly as possible.
You might try making quick money to pay off debt or trying a few apps that give you free money.
Setup a Budget
Budgeting is by no means fun – but it's necessary if you want to reach your financial goals and achieve financial independence.
Most people neglect their monthly budgets which can cost them hundreds of dollars each month in wasted cash.
You don't need to be a finance expert to create a budget. Start by taking hold of your monthly income and expenses.
After writing them down, make sure you have a net positive cash flow. If not, you'll need to either reduce your expenses or make more money.
Create an Emergency Fund
There are many unexpected expenses that will likely popup on your journey to $100,000 and having an emergency fund can help you to navigate these times.
While finance experts recommend having an emergency fund of anywhere from 6-9 months of your normal expenses, start by saving just one thousand dollars.
Never Borrow to Invest
Whenever you invest you'll want to be sure you can afford to lose the money that you're investing. Because an investment can increase and decrease in value quite quickly, you'll want to ensure you have the money in the case something goes wrong.
If you borrow money to invest you run the risk of paying interest if your investment decreases in value.
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How to Double 10k Quickly
Doubling your money by investing is very similar to turning 10k into 100k, but it will oftentimes be much quicker.
To double your money, I recommend many of the same investments like index funds, real estate, or starting a small business.
If you want to double 10k quickly, you're going need to do some additional work.
I recommend you invest your money into an investment that has a stronger income potential like a business or blog rather than the market to double your 10k quickly.
Doubling your money is not a simple task and it's going to come with some additional risk, especially if you're in a time crunch. You might consider picking up a side hustle or growing your knowledge rather than using your cash to invest.
Another option to double your money would be utilizing an alternative investment like cryptocurrency or investing in art. While some people may not consider this to be an investment – it's up to you to decide.
Take a look at the price of Bitcoin over the past 5 years. It's hard to argue that it has not been a wise investment.
If you want to invest in Bitcoin and other cryptocurrencies, I recommend using Coinbase.
Final Thoughts on How to Turn 10k into 100k
Turning 10k into 100k is not a simple challenge. It's going to take some time and energy to craft a strategy to grow your money.
Whether you choose the stock market, real estate, or even a traditional savings account – there are some methods that are faster than others. The more risk you are willing to take, the easier it can be to 10x your money.
I recommend keeping your investments diversified to ensure you don't lose all of your money from one mistake. By utilizing index funds, mutual funds, and ETFs you can limit risk while optimizing your returns.
No matter what investment you make – getting started is the first step to turning 10k into 100k. What're you waiting for?