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How to invest $10k

Put that $10k to work with these top 6 investment picks.

Before you invest $10k

Before you throw your $10k into investments, consider tackling these common financial tasks:

  • Pay off high-interest debt. If you have any credit card debt or personal loans, pay these off first. They often have interest rates higher than what you’d earn in any investment vehicle, so you’ll come out ahead if you pay them down.
  • Beef up your emergency fund. Keep 3-6 months’ worth of bare-bones expenses in a high-yield savings account where you can have instant access to it in an emergency.
  • Create a vacation or holiday fund. If vacation or holiday expenses tend to creep up on you every year, consider setting aside part of your $10k to cover these expenses. Keep this money in a high-yield savings account the same as you would your emergency fund.
  • Kids’ education fund. If you have children, you may consider setting aside a portion of the $10k for their post-secondary education.

How to build a $10k investment portfolio

How you should invest $10k depends on a host of things: your age, goals, investment knowledge, and risk tolerance. You’ll need to have a clear picture of these to build a $10k portfolio.

If you’re in your early 30s and want a long-term portfolio focused on growth, here’s what it might look like:

Investment typePercentage
GICs and bonds0-15%
Stocks, ETFs and mutual funds70-90%
Real estate and alternative investments0-25%

To make the most of many of the investments below, you may need a new brokerage account.

Invest in an RRSP

If you’re looking to save for retirement, you can get a jump start by opening a Registered Retirement Savings Account (RRSP).

Pros

  • Tax-free growth. You fund an RRSP with pre-tax money, so it can grow in the account without being subject to tax.
  • Use funds for qualifying expenses. You can withdraw funds before you turn 71 for qualifying expenses, such as your first home (through the Home Buyers’ Plan) or certain educational expenses (through the Lifelong Learning Plan).

Cons

  • Can’t use funds until retirement. You’ll pay a penalty if you withdraw RRSP funds before you’re 71.
  • Limited investment options. RRSP plans use simple investment vehicles like stocks, bonds and mutual funds.
  • Can’t invest funds directly. RRSP contributions are deducted straight from your salary, so you can’t make a one-time, lump-sum contribution.

Investments that can be held in an RRSP

RRSPs are designed to hold certain types of assets including:

  • Stocks
  • Bonds
  • Guaranteed Investment Certificates
  • Mutual Funds
  • Exchange-Traded Funds
  • Labour-Sponsored Funds
  • Mortgage Loans
  • Foreign Currency
  • Income Trusts

Invest with a robo-advisor

If you’d like some guidance on how to invest $10k, a robo-advisor may be a good alternative to a traditional adviser.

Pros

  • Inexpensive. Required fees and investment minimums are much lower than with a traditional financial adviser.
  • Goals-based investing. Robo-advisors make algorithmic recommendations based on your goals, risk tolerance and investing timeline.
  • Requires minimal time or effort. Robo-advisors keep your portfolio in tip-top shape by performing routine tax-loss harvesting and automatic rebalancing.
  • Some offer human assistance. Robo-advisors like CI Direct Investing (formerly WealthBar) give you access to professional financial advisors to answer your questions and provide advice.

Cons

  • Limited flexibility. You typically can’t choose your own investments.
  • Not entirely personalized. Robo-advisors give advice based on the questions they ask you. But they can’t ask follow-up questions if your situation is unique.
  • Relatively new. Robo-advisors came on the scene after the Great Recession, so we don’t know how they’ll help investors during the next economic downturn.

Compare robo-advisors

Name Product Minimum deposit to invest Funding methods Management fee Available Asset Types
Wealthsimple Invest
$1
Direct deposit, Bank transfer
0.40% - 0.50%
Stocks, Bonds, ETFs, Commodities
Get a $50 bonus when you open and fund your first Wealthsimple Invest account with a minimum initial deposit of at least $500. Trade and Cash accounts are not eligible.
CI Direct Investing (formerly WealthBar)
$1,000
Direct deposit, Bank transfer
0.35% - 0.60%
Mutual Funds, ETFs
CI Direct Investing offers access to an exclusive and personalized investment portfolio. Get up to $10,000 managed free for a year when you sign up for your first CI Direct Investing account and fund your account.
Justwealth
$5,000
Direct deposit, Bank transfer, Automatic bank withdrawals
0.50%
ETFs
Receive a cash bonus of $50.00-$500.00 when you open a new Justwealth account. RESP accounts require no minimum deposit to begin investing.
Moka
$0
Automatic bank withdrawals
$3/month
ETFs
The Moka app rounds up every purchase you make to the nearest dollar and invests the spare change into low-cost exchange-traded funds (ETFs).
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Invest in stocks with a self-directed brokerage account

Brokerage accounts are accounts opened with an investment company. It’s like a bank account, only the account holds stocks instead of cash deposits. If you’re more of a hands-on investor, $10k is more than enough to get started with an online broker.

Pros

  • Variety. Many brokers offer stocks, mutual funds, bonds, ETFs and options.
  • Freedom. You have full control to invest however you want.
  • Help when you need it. Many top online brokers offer investment advice in the form of extensive research centers, in-person support and automated investment strategies.

Cons

  • Potential mistakes. You could make costly mistakes with your $10k if you don’t have a lot of investing experience.
  • Fees. Many online brokers are moving toward a commission-free model, but there are still some that charge hefty fees.

Compare online stock trading platforms

Name Product Available Asset Types Stock Fee Option Fee Account Fee ETF Transaction Cost Feature Table description
Interactive Brokers
Stocks, Bonds, Options, ETFs, Currencies, Futures
Min. $1.00, Max. 0.5% of trade value
$1.50 min. per order
$0
Min. $1.00, Max. 0.5% of trade value
Extensive trading capabilities and global investment tracking.
Access market data 24 hours a day, six days a week and invest in global stocks, options, futures, currencies, bonds and funds from one single account.
OFFER
Wealthsimple Trade
Stocks, ETFs
$0
N/A
$0
Free
Get a $50 bonus when you open a Wealthsimple Trade account and deposit and trade at least $100.
Pay no commissions when you trade Canadian stocks and ETFs with Wealthsimple Trade.
Scotia iTRADE
Bonds, Options, Mutual Funds, ETFs, GICs, International Equities
$4.99-$9.99
$9.99 + $1.25 contract ($4.99 + $1.25 contract if completed 150 trades or more a quarter)
$0
$9.99 ($4.99 if completed 150 trades or more a quarter)
Pay no annual account fees.
Buy, sell and trade ETFs, Equities, Options and more with competitive commissions.
CIBC Investor's Edge
Stocks, Bonds, Options, Mutual Funds, ETFs
$4.95 - $6.95
$4.95 - $6.95 (+$1.25 per contract)
$0 if conditions met, otherwise $100/year
$6.95
$4.95 - $6.95 is applicable for online stock, ETF and option trades only. Pay $4.95 when you qualify as an Active Trader (trade 150+ times per quarter).
An intuitive and easy-to-use platform with access to a variety of tools that help you make smart decisions and trade with confidence.
Questrade
Stocks, Bonds, Options, Mutual Funds, ETFs, GICs, International Equities, Precious Metals
$4.95-$9.95
$9.95 + $1 per contract
$0
Free
Get $50 in free trades when you fund your account with a minimum of $1,000.
Opt for self-directed investing and save on fees or get a pre-built portfolio and take some of the guesswork out.
Qtrade Direct Investing
Stocks, Bonds, Options, Mutual Funds, ETFs, GICs
$6.95 - $8.75
$6.95 - $8.75 + $1.25 per contract
$0 if conditions met, otherwise $25/quarter
$0 - $8.75
Trade 100 select ETFs free of charge.
Qtrade Direct Investing offers low trading commissions and an easy-to-use platform with access to powerful tools and a wide selection of investment options. Trade 100 ETFs free of charge and thousands more for $8.75 or lower.
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Invest in bonds

If you plan on making a big purchase in the near future, such as buying a home or sending the kids to college or university, it may make sense to invest your money in bonds. Terms typically range from a few months up to 30 years.

Pros

  • Little risk. Bonds are considered stable investments and carry less risk than other securities.
  • Provide passive income. Bonds produce a steady, fixed income and offer higher returns than other safe investments like savings accounts.

Cons

  • Risk varies. Government bonds are typically safer than corporate bonds, although this isn’t always the case. You’ll want to check what letter grade it was assigned by the credit rating agencies.
  • High investment minimums. Bond prices usually start at $1,000. But some can cost much more than that.
  • Could lose value. Your bond could lose value if the issuing entity defaults or interest rates rise when you’re ready to sell.

Invest in peer-to-peer lending

Lend your money to other individuals in need through peer-to-peer (P2P) lending.

Pros

  • Lucrative returns. The average investor earns between 5% and 9% interest with P2P lending.
  • Steady cash flow. You’ll receive steady monthly income as the borrower repays their loan.
  • You’re helping someone in need. Most P2P investors enjoy lending money to help someone who needs it more than they do.

Cons

  • Risk of default. There’s a chance you could lose your money if someone defaults on their loan.
  • P2P lending is new. This industry has only been around since the Great Recession, so it’s hard to tell how it will do during the next economic downturn.
  • Unsecured loans. Often, borrowers don’t put up collateral for the loans, so there’s a slim chance you’ll get your money back if something happens.

Bottom line

There are many different ways you could invest $10k. Whatever you choose, make sure your investments align with your needs. Weigh the pros and cons and nail down which investments will help you accomplish your goals. Then, shop around for top-rated investment accounts until you find one that suits you.

Frequently asked questions

Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading CFDs and forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades.

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