If you don’t have an emergency fund, I would put some or all of it into something like a money market account. It won’t grow very much, but it’s safe and is quick and easy to withdraw when needed.
Otherwise depends on your age and situation, but an index fund (S&P 500) is almost always the right choice. It’s flexible, doesn’t usually lock you in, and will generally do very well in the mid-to-long term. If we hit a recession you might get stuck holding the shares for several months to a few years. The last thing you want to do is panic sell in that situation.
If you have any debt, paying that down is a very smart move, especially if the debt is charging more interest than your investment can earn. Future you will thank you.
I have my emergency fund, and no debt. If I were to lose this $10K, it wouldn’t impact my life. I’m comfortable with taking $10K out of my bank account and doing something with it but I don’t know how to go about that. I don’t know how to open an index fund or money market account.
I’m going to second (third, fourth, fifth) the Roth IRA recommendation. You can set it up with Schwab or whoever and can make recurring contributions too (set it and forget it) there are income limits so if you are really raking it in one year you can’t contribute that year but whatever you put in there is still (usually) going to grow in value. If you have an emergency situation and need the money you can withdraw contributions, not earnings, ahead of retirement, so it’s not lost to you, but working for you and much easier at tax time, no worries about how to report it.
Put it in an IRA so you cant touch it and buy high dividedend yeilding stocks that reinvest in more shares and let it sit for the next decade and pray that there is a radical social change in out society so we can save the Planet and Poor from Billionaires.
You can definitely touch an IRA. Had to empty mine since I’ve been unemployed.
I’m a software engineer but can’t even get a call back due to the fact that tons of us are unemployed right now. Many unemployed have more experience than I do.
The best part is that I can’t even get a job at a grocery store because I’m “overqualified” according to one store in my neighborhood.
High yield savings account at SoFi or Ally Bank will give you 4% right now.
No offense, but that sounds like a terrible idea.
$10,000 at 4% gives you $400 interest in one year.
Just about any decent dividend stock will outperform that. Look at PET for example. It is sitting at $3.65/share right now and offers a quarterly dividend of $0.30. That puts you at $1.20/share per year. 10k = 2739 shares = $3,286.80 dividend payout in one year.
Banks are the worst place to put investments. Money in bank accounts are only supposed to be there if you need it liquid, like an emergency fund or your checking account.
*PETS
PETMED EXPRESS INC COM
For all the nay sayers downvoting me as if it is impossible to find dividend stocks that outperform their precious SPY or high yield savings rates, here is a great list I found with shit loads. I count 60 different stocks that offer 10% yields or more. 100 in total all offering over 8% -double what some bullshit ‘high yield’ savings offers.
https://www.tradingview.com/markets/stocks-usa/market-movers-high-dividend/
PETS, sorry, don’t know why my phone cut off the ‘S’.
PETMED EXPRESS INC COM
Little under 30k in higher risk dividend. Bring in about 800 a month.
I have a mix of large cap, small cap growth stocks, then dividend high risk and low risk. Stock like this (I do not own PETS, I was just using it as an example) would be a high risk due to its price instability. But you mitigate that with stop loss orders.
I have a vanguard/roth for my longs (large cap growths and stable dividends with DRIP) and then use etrade for the small cap or high risk ones. I like their tax documents and easy interface.
People make arguments against dividend stocks, I simply call it a different strategy. Some years it beats out my growths, some years it is about on par. Depends on where I have it at the time and slightly more market dependant.
I have recently gotten into ex-date chasing. While it has increased the returns, it is more work.
Depends on your risk tolerance.
A 4% savings account is “safe” but might not keep up with inflation.
An index fund might be “good”, but the value can go down.
The average inflation rate for the last 20 years is under 3%
Edit: why are people downvoting me, refute my statement with a source instead of downvoting because you wish inflation was higher
Leave the country while you still can? 🤓🤘🏽
I kind of agree, moving from USA to for example Switzerland would be an improvement in every aspect of life.
But that might not be what they want.
It’s a big undertaking; learning the language and law, changing jobs, being okay with the fact you’ll rarely if ever see your family and friends…
The biggest problem for some people is no country wants them.
America seems to take just about anyone given you wait decades, but every other country worth moving to has strict income or professional requirements. I’m just a worthless factory schmuck so I’m stuck here :(
Or that, yes.
Even if you suddenly cash out a lucky 10 000 USD once, a lot of countries’ income requirements still filter you out
