How to Invest $10,000 Dollars (3 WAYS)

We're talking about three ways you can invest $10,000 dollars in 2021 and beyond. From emergency funds to index funds and speculative plays (all in on CRYPTO anyone!?), we'll discuss what you should be considering when you are looking to invest your $10,000.

Videos Referenced in this Video:

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These 3 ways are actually more like pillars.

So the 1st pillar is the financial foundation you should be striving for, 2nd is our core investments, and 3rd - riskier and speculative investments.

I like this approach because I'm going to be laying out a framework for how you should be approaching this problem - so that no MATTER what your preferences are, you're going to have an idea of how you should invest your hard earned cash.

1. Financial Foundation
- Pay off high interest rate debt (anything over 4%) and start an EMERGENCY fund.

When it comes to high interest rate debt - Debt actually costs you money and your best returns can actually be on paying down debt.

Let's say you have credit card debt and the interest rate is 16% on your balance. When you pay down that credit card balance, it's basically a GUARANTEED return of 16% on your money.

When it comes to an Emergency Fund, most people suggest between 3-6 months of living expenses saved up in a liquid account.

The point of the emergency fund is that if you establish it, you have a safety net and you can start to take on more risk in the future. The emergency fund should only be kept for emergencies, and liquid - it's not something where you want the balance to fluctuate, and you want to be able to have access to it as quickly as you can in case of well, an emergency.

2. Core Investments
(1) We'll want to fund our retirement accounts
- If we had $10,000 and we haven't started a Roth IRA or a 401k yet, this is what we should be looking at first.

(2) We'll want to invest in long-term, safe holdings that appreciate and are well diversified such as Index Funds and ETFs
- An index fund and often ETFs, are basically funds that you can buy on the market that are comprised of a portfolio of stocks. So for example if you buy the S&P 500 Index Fund, by buying that ONE fund, aka making one purchase, you get a small % of everything that the Index Fund owns. So by buying one fund, you're immediately invested into the entire S&P 500 index as a whole which means that your investment is instantly well diversified.

(3) Anything else that provides us a decent return on our money at a relatively safe risk level
My dividend portfolio is an example of this. I have enough of them that I'm well diversified, but the risk isn't super high since these are all companies that I've chosen with a dividend that are relatively safe.

3. Speculative Investments
These are investments like individual stocks, cryptocurrencies, foreign exchange , anything where the volatility is just going to be higher and you actually may lose money.

With individual stock picks, you can invest in these if you have a strong belief that the company will go up depending on your time horizon.

For example, I have a large holding of Apple stock since I believe Apple will continue to grow upwards especially with their large cash reserves and their frequent product releases.

But even though I hold a large concentration of Apple, I'm still balancing this out with my index funds and core investments such as my dividend portfolio.

▶️ My name is Humphrey Yang, I've built multiple businesses and am passionate about Personal Finance. If you're trying to build a solid foundation of financial literacy, learn to invest, or become financially free - then I'm here for you! This channel cover topics like getting out of debt, managing money, building credit, multiple income sources, passive income, etc.

Disclaimer: I am not a financial advisor, any investment commentary are my opinions only. Some of the products and services that appear on this channel are from companies that I have an affiliate relationship with, such as Robinhood, for which I recieve a small percentage made via those links, but it doesn’t cost you anything extra!

[kathleenstoner.n]

Legends to embrace if you want to get rich investing Humhrey and Gary Joe Wilde.

[kendals]

Saved enough this year with my freelancing fashion design business and JUST paid off my college loans! wohoo...Now I have more cash to actually start investing.

[vitoriadiascorreia]

I made my first $100, 000 a week ago from a $10, 000 investment.

[klariskb]

Hey, as an Accounting and Finance student this channel is gold. Helps me apply my knowledge to your real life examples. Thank you.

[CocaColaIsOriginal]

Watching you grow from 35k to 50k subs in <2 weeks is no surprise -- great content :)

[videorc]

A rack and a stack both 1k where I’m from

[davidhenry]

Me: oh man! This framework is sick! Makes so much sense!
Also me: puts all my money on GME

[Rommie]

Can you do a video on investing in franchises like a cannabis dispensary or a fast food chain like chic fil a?

[mickaelsimonet]

Again a great video, you deserve way more views and subscribers.

[kulsoomali]

Just stumbled across your channel and I LOVE it. Something for every age and tax bracket!

[laughing]

To be honest, are you still thinking that Apple stock is a risky stock?

[MR-lnxh]

Awesome! Love the fact you are always concise :)

[KRAcorn]

Of the 10K, what would you suggest as a percentage breakdown for your three buckets of investment?

[caroline_so]

Thank you so much Humphrey for this useful video. In your opinion, what brokerage firms do you recommend? For Roth IRA, risky investments and buying an index fund? Thank you in advance! Xx

[lawrenceberg]

when do we get a shannon sharpe and humphrey yang collab video tho

[AskArianne]

Great video, and I agree it's so important to start with the foundation!

[xnivita]

where would you consider espp in these three pillars? i'm always torn between doing a quicksale (and just paying those short term gains taxes) or holding on to them for the long term (or at least a year to avoid the short term tax). would you consider them a more safe investment?

[JonoTings]

What’s the best platform to trade Bitcoin

[hananiahpierre-louis]

Great video, Humphrey
Easy to digest, very concise. I am new to this channel but You're motivating me to get out of debt and focus on financial stability.
Is it possible to get in touch with you? I am just starting to learn the basics of financial literacy

[gheecute]

Do I need to buy index fund thru broker or financial planner or by myself, thanks