"Start investing" is one of the most common pieces of financial advice -- and for good reason. It's a powerful way to build wealth. The stock market has grown about 10% per year, on average, going back decades.
Numbers like that give you an idea of how much investments can grow. But if you're on the fence about investing, it also helps to see some real dollar amounts.
How much money you can make by investing $10,000
Let's say you've saved $10,000. You decide to invest it in the stock market. One easy way to do this would be with a total stock market index fund, which is available with any of the top stock brokers.
We'll err on the side of caution and assume you make an 8% annual return on your investment. Here's how much that $10,000 would grow over the years, without adding any more money to it.
| Year | Return | Ending balance |
|---|
| 1 | $800 | $10,800 |
| 5 | $4,693 | $14,693 |
| 10 | $11,589 | $21,589 |
| 20 | $36,610 | $46,610 |
| 30 | $90,627 | $100,627 |
Data source: Author's calculations.
It's important to mention that the stock market can be volatile, and returns fluctuate. There will be some years where your investments do very well. There will also be some years where your investments lose money. And there will be a lot of years in between those extremes, as well. You won't get a steady 8% return year after year.
However, we know that historically, the stock market has averaged returns in that range. Over time, those returns add up to massive growth. After 30 years, your $10,000 investment could be worth over $100,000.
That's also without adding to it. What if you started by investing $10,000, but then continued investing $500 per month over the next 30 years? Assuming the same 8% return, you'd end up with $780,326.
How to start investing today
One of the most common investing questions is "where do I start?" With so many investment options available, it can feel overwhelming as a beginner.
It's not as hard as it seems. Here's how to start investing:
- Open a brokerage account.
- Fund your account by transferring over money from your bank.
- Choose an investment.
- Place an order.
If you don't have a brokerage account yet, check out our list of the best stock brokers for beginners. These are all easy to use and have excellent customer service, so they're great for those who are new to investing.
The most challenging part is usually choosing an investment. I recommend going with exchange-traded funds (ETFs) or mutual funds. These are investments that spread your money across a large number of stocks or bonds. Instead of needing to pick a bunch of stocks yourself, you can buy an ETF or mutual fund that does it for you.
RELATED: ETF vs. Mutual Fund: What's the Difference?
For example, you could invest in a total stock market ETF or mutual fund. This type of investment provides exposure to the entire U.S. stock market. If you invest in one of these, your investment portfolio will follow the stock market's performance.
That's just one option. No matter your strategy, getting started with investing is one of the best financial decisions you can make. As the numbers show, patient investors can make a significant amount of money.
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FAQs
Currently, money market funds pay between 4.47% and 4.87% in interest. With that, you can earn between $447 to $487 in interest on $10,000 each year.
How much money can I make if I invest $10,000? ›
Currently, money market funds pay between 4.47% and 4.87% in interest. With that, you can earn between $447 to $487 in interest on $10,000 each year.
How can I invest $10 000 for quick return? ›
- Pay off high-interest debt. Before you do anything, work to eliminate high-interest debt, such as credit card balances. ...
- Build an emergency fund. ...
- Open a high-yield savings account. ...
- Build a CD ladder. ...
- Get your 401(k) match. ...
- Max out your IRA. ...
- Invest through a self-directed brokerage account. ...
- Invest in a REIT.
If you put $10,000 into a high-yield savings account, you can earn from $300 to $420 in a year — assuming your variable high-yield savings rate remains above 3.00%. Several banks are offering rates between 4.35% to 5.27% APY.
How much will 10K be worth in 30 years? ›
Over the years, that money can really add up: If you kept that money in a retirement account over 30 years and earned that average 6% return, for example, your $10,000 would grow to more than $57,000.
How to double 10K quickly? ›
How To Double 10K Quickly
- Flip Stuff For Money. One of the more entreprenurial ways to flip 10k into 20k is to buy and resell stuff for profit. ...
- Invest In Real Estate. If you want a more passive approach to double 10k quickly, you can always consider real estate investing. ...
- Start An Online Business. ...
- Start A Side Hustle.
How to make passive income
- Real estate investing. ...
- Invest in art or alternative investments. ...
- Sell designs or art online. ...
- Investing in a high-yield savings account or certificate of deposit (CD) ...
- Dividend stocks. ...
- Affiliate marketing. ...
- Peer-to-peer lending. ...
- Real estate investment trusts (REITs)
There's nothing wrong with keeping $10,000 in a savings account. But it might not earn you the highest yields. CDs and brokerage accounts could be better homes for your cash in some situations.
Is investing $10,000 good? ›
$10,000 is a healthy chunk of cash and enough to give you cold feet when deciding how to invest it. Some of the best ways to invest $10,000 include funding a 401(k) or opening and funding an IRA or brokerage account. We'll help you walk through those options below.
How much will $10,000 make in a CD? ›
The Bankrate promise
| Type of 1-year CD | Typical APY | Total value of CD with $10,000 opening deposit after 1 year |
|---|
| Bankrate partner average | 4.94% | $10,494 |
| CDs that pay the national average | 1.74% | $10,174 |
| CDs from big brick-and-mortar banks | 0.03% | $10,003 |
May 2, 2024
Here's what your returns on a $10,000 balance could look like
| 0.46% APY | 5.30% APY |
|---|
| After 1 Year | $46.00 | $530.00 |
| After 5 Years | $232.13 | $2,946.19 |
| After 10 Years | $469.64 | $6,760.37 |
Dec 30, 2023
The interest is significant and predictable
Let's say you put $10,000 into a 5-year CD with the rate discussed above – 4.75%. After the 5-year term is up you'll have earned $2,611 in interest for a total account balance of $12,611.
How much money do I need to invest to make $3,000 a month? ›
Imagine you wish to amass $3000 monthly from your investments, amounting to $36,000 annually. If you park your funds in a savings account offering a 2% annual interest rate, you'd need to inject roughly $1.8 million into the account.
How much can I make if I invest 10k? ›
If you invest $10,000 and make an 8% annual return, you'll have $100,627 after 30 years. By also investing $500 per month over that timeframe, your ending balance would be $780,326. Exchange-traded funds (ETFs) and mutual funds are both excellent investment options.
How much will $50000 be worth in 20 years? ›
After 20 years, your $50,000 would grow to $67,195.97. Assuming an annual return rate of 7%, investing $50,000 for 20 years can lead to a substantial increase in wealth.
How much does a $10,000 CD make in a year? ›
Earnings on a $10,000 CD Over Different Terms
| Term Length | Average APY | Interest earned on $10,000 at maturity |
|---|
| 1 year | 1.81% | $181 |
| 2 years | 1.54% | $310.37 |
| 3 years | 1.41% | $428.99 |
| 4 years | 1.32% | $538.55 |
1 more rowApr 24, 2024
If you're saving $10,000 a year and have an additional $7,100 you can put into savings, Singh said a high-yield savings account with a 4% interest rate could take you to $100,000 in 10 years.
How much will 10k make in a high-yield savings account? ›
Opening a high-yield savings account could allow you to earn more interest from your savings. If you stash $10,000 in a high-yield savings account for one year at 4.50% APY, you can earn $450. The longer the money sits in your account, the more interest you'll earn.
How much will $10,000 make in a money market account? ›
The average money market rate is less than 1 percent. But let's say you put $10,000 in an account that earns a full 1% APY. After a year, your balance would earn 100 bucks. Put that same amount in a money market account with a 4% APY, and it would gain just over $400.
