"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.
FAQs
And that's to be expected—your job is to remain focused on the future. If you can manage to earn a 10% return on your investment every year for 30 years, your $10,000 could grow to as much as $174,000—all without contributing another penny on top of your original investment. That's the magic of compound interest.
How much can I make if I invest $10,000? ›
And that's to be expected—your job is to remain focused on the future. If you can manage to earn a 10% return on your investment every year for 30 years, your $10,000 could grow to as much as $174,000—all without contributing another penny on top of your original investment. That's the magic of compound interest.
How to turn 10K into 100K in 1 year? ›
Here are the most effective ways to earn money and turn that 10K into 100K before you know it.
- Buy an Established Business. ...
- Real Estate Investing. ...
- Product and Website Buying and Selling. ...
- Invest in Index Funds. ...
- Invest in Mutual Funds or EFTs. ...
- Invest in Dividend Stocks. ...
- Peer-to-peer Lending (P2P) ...
- Invest in Cryptocurrencies.
But our editorial integrity ensures our experts' opinions aren't influenced by compensation. Terms may apply to offers listed on this page. A $10,000 investment today could be worth almost $175,000 in three decades if you put money into the stock market.
Is $10,000 too little to invest? ›
Whether you have $10,000 or $100, investing today is a great way to start building wealth for tomorrow. You can invest your $10,000 in anything from real estate to an investment portfolio, put the funds in a high-yield savings account or CD, save for retirement or even grow your career.
How much interest will $10,000 earn in a year? ›
Earnings after one year on $10,000 with our top picks for the best savings accounts
| Bank | APY | Interest earned annually on $10,000 |
|---|
| National average | 0.46% | $46.10 |
| Barclays | 4.20% | $444.57 |
| Continental Bank | 4.41% | $450.84 |
| Quontic Bank | 4.50% | $460.25 |
7 more rowsA stock portfolio focused on dividends can generate $1,000 per month or more in perpetual passive income, Mircea Iosif wrote on Medium. “For example, at a 4% dividend yield, you would need a portfolio worth $300,000.
Can you turn 10K into a million? ›
If you're willing to stay the course and buy and hold investments that you're willing to be patient with, it's not impossible by any means to grow a $10,000 portfolio to $1 million or more by the time you retire.
How can I flip 10K fast? ›
Let's have a look at the best ways to turn your 10k into 100k:
- Invest in Real Estate. ...
- Invest in Cryptocurrency. ...
- Invest in The Stock Market. ...
- Start an E-Commerce Business. ...
- Open A High-Interest Savings Account. ...
- Invest in Small Enterprises. ...
- Try Peer-to-peer Lending. ...
- Start A Website Blog.
The classic approach to doubling your money is investing in a diversified portfolio of stocks and bonds, which is likely the best option for most investors. Investing to double your money can be done safely over several years, but there's a greater risk of losing most or all your money when you're impatient.
How can I double $5000 dollars? One way to potentially double $5,000 is by investing it in a 401(k) account, especially if your employer matches your contributions. For example, if you invest $5,000 and your employer offers to fully match at 100%, you could start with a total of $10,000 in your account.
How much will $3000 be worth in 20 years? ›
The table below shows the present value (PV) of $3,000 in 20 years for interest rates from 2% to 30%. As you will see, the future value of $3,000 over 20 years can range from $4,457.84 to $570,148.91.
Where to put 10k right now? ›
Best ways to invest $10,000: 10 proven strategies
- Pay off high-interest debt.
- 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.
- 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)
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.
Should I keep 10k in savings? ›
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.
How can I invest $10,000 for quick return? ›
Best ways to invest $10,000: 10 proven strategies
- Pay off high-interest debt.
- 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.
How much a $10,000 deposit in a money market account will earn annually depends on the annual percentage yield (APY) offered by your financial institution. If you deposit $10,000 into a money market account with a 5.00% APY, you will earn $513 in interest by the end of the year, assuming daily compounding.
What if I invest $10,000 in stock market every month? ›
The 8-4-3 rule of compounding can be your way to achieve the Rs 1 crore corpus goal. Jiral Mehta, Senior Research Analyst, FundsIndia said that in this strategy, if you invest Rs 10,000 every month, assuming annual returns of 12 per cent, it takes 8 years to reach the Rs 16 lakh maturity amount.
What would 5% interest be on $10,000? ›
Simple Interest Examples
You want to know your total interest payment for the entire loan. To start, you'd multiply your principal by your annual interest rate, or $10,000 × 0.05 = $500. Then, you'd multiply this value by the number of years on the loan, or $500 × 5 = $2,500.
