Investing is extremely important for your future, no matter what you want to do. Having money to travel, retire, or give to your kids is something that many of us need to start thinking about sooner than later. Most people don’t have $10,000 lying around but that’s why I did this number. Invested correctly, $10,000 can be a powerful stepping stone to financial independence and could turn out to be a large sum of money over decades of compounding. Let’s look at some ways I invest my cash and how I started investing with my first $10,000.

Not financial advice. Just experience.

I’ve been investing for just over a year, but have been taught about the stock market for around 7 years. My grandfather, a wickedly brilliant investor and an overall business savvy person have mentored me since I was a freshman in high school. I am now 22, read my story, here. In this last year and a half, I have been dedicated to diversification, patience, planning, and hedging my investments. Over that time, I have thought about how people should invest their first $10,000 and came up with a great action strategy on how to do so effectively.

Photo by Felix Mittermeier on Unsplash

Before I get into the breakdown of the exact investments I would buy, let’s first cover the importance of diversification. I have already covered this topic in length, so read the full version, here. Diversification is extremely important when investing in anything. There are many avenues or tools you can use to invest and many ways to diversify. Specifically, we’re going to speak on the stock market.

Within the stock market, there are sectors, size-based stocks, and ETFs. Sectors are basically industries or categories that you can invest in. Cap-based stocks or ETFs are stocks separated by size or market cap. Individual stocks or ETFs? Isn’t that the main question?

Yes, so let's get into that.

If the goal is to be diversified (and it is), ETFs can be incredibly valuable in achieving that goal. ETFs are sometimes composed of hundreds of stocks whereas buying individual stocks leaves you vulnerable to short-term market problems. ETFs also have much less risk than individual stocks. Although it’s a great practice to have the majority of your portfolio be in ETFs, it’s completely okay to have somewhere around 10% of that dedicated to individual, high-growth stocks. But only stocks that you truly believe in and you are invested in because of high-future growth.

Photo by Tech Daily on Unsplash

$1,600 (16%), SP 500 ETF $1,400 (14%), GLD Gold Trust ETF (Hedge) $1,000 (10%), DIA 30 ETF

$1,000 (10%), SCHA Small-Cap ETF $1,000 (10%), XLB Medium-Cap ETF $1,000 (10%), XLK Technology Sector ETF $1,000 (10%), REET Real Estate ETF (Hedge) $600 (6%), XLB Materials Sector ETF $400 (4%), TAN, ARK, ICLN Clean Energy Sector ETF

$200 (2%), Individual Stock $200 (2%), Individual Stock $200 (2%), Individual Stock $200 (2%), Individual Stock $200 (2%), Individual Stock

This is a very diversified breakdown and one that I first used when I started investing. I now have just over $50,000 in my portfolio, so I have a lot more ETFs and stocks on my list, but for $10,000 this list will get you started and then some. Even if you set it and forget it, I can just about promise that your portfolio will be looking very pretty in a couple of years.

Investing is all about the long term and compounding over time. If you leave your investments alone, they will grow more. That’s just how it works. The highest growth will be achieved by leaving it alone (hopefully buying more and diversifying more) for many decades to come. By the time you’re 40 or 50 or 60, you’ll have a very large sum of money in your savings.

Be patient.

Investing is not a sprint, it’s a marathon.

Photo by Andrea Leopardi on Unsplash

You probably clicked on this article to learn about a way to make a profit on $10,000 in the short term. Sorry to disappoint. There’s no logic there. That’s not reality. Reality is setting yourself up to succeed by the time you need it most. The future. The reality of investing is that it takes many years and many ups & downs to truly grow any amount of money. The sooner you understand that and the sooner you invest your money in a way that is diversified and untouchable, the happier you’ll be.

No one wants to worry about their stock portfolio every hour of the day. It’s exhausting! So don’t, diversify well enough that you don’t have to look at it every day or even every week. If you diversify, then you really don’t have to look at your portfolio ever! And then, years down the road when you need some money, you have a bunch of money.

Diversification and ETF talk can be a little dry, and I apologize for that. But these topics… diversification…are necessary to understand. You absolutely need to understand and practice the discipline of NOT taking out your money or selling your investments in the short term. It’s not an easy thing to grasp and it’s even harder to actively do. It took me many months to realize that.

And again, this is just my experience. Take or leave my stock breakdown, but please try to understand diversification. It’ll change the way you invest (not just in stocks) and it’ll make sure you always stay within your financial means.

So I’ll leave you with this plan:

1. Get $10,000.

2. **Diversify **with ETFs and hedges.

3. Practice the 10% rule.

4. Only buy more, never sell.

5. Don’t touch it, leave it alone.

6. Let it compound over many years.

7. Stick to your plan.

Investing is extremely important for your future, no matter what you want to do. Having money to travel, retire, or give to your kids is something that many of us need to start thinking about sooner than later. Most people don’t have $10,000 lying around but that’s why I did this number. Invested correctly, $10,000 can be a powerful stepping stone to financial independence and could turn out to be a large sum of money over decades of compounding. Let’s look at some ways I invest my cash and how I started investing with my first $10,000.

Not financial advice. Just experience.

I’ve been investing for just over a year, but have been taught about the stock market for around 7 years. My grandfather, a wickedly brilliant investor and an overall business savvy person have mentored me since I was a freshman in high school. I am now 22, read my story, here. In this last year and a half, I have been dedicated to diversification, patience, planning, and hedging my investments. Over that time, I have thought about how people should invest their first $10,000 and came up with a great action strategy on how to do so effectively.

Photo by Felix Mittermeier on Unsplash

Before I get into the breakdown of the exact investments I would buy, let’s first cover the importance of diversification. I have already covered this topic in length, so read the full version, here. Diversification is extremely important when investing in anything. There are many avenues or tools you can use to invest and many ways to diversify. Specifically, we’re going to speak on the stock market.

Within the stock market, there are sectors, size-based stocks, and ETFs. Sectors are basically industries or categories that you can invest in. Cap-based stocks or ETFs are stocks separated by size or market cap. Individual stocks or ETFs? Isn’t that the main question?

Yes, so let's get into that.

If the goal is to be diversified (and it is), ETFs can be incredibly valuable in achieving that goal. ETFs are sometimes composed of hundreds of stocks whereas buying individual stocks leaves you vulnerable to short-term market problems. ETFs also have much less risk than individual stocks. Although it’s a great practice to have the majority of your portfolio be in ETFs, it’s completely okay to have somewhere around 10% of that dedicated to individual, high-growth stocks. But only stocks that you truly believe in and you are invested in because of high-future growth.

Photo by Tech Daily on Unsplash

$1,600 (16%), SP 500 ETF $1,400 (14%), GLD Gold Trust ETF (Hedge) $1,000 (10%), DIA 30 ETF

$1,000 (10%), SCHA Small-Cap ETF $1,000 (10%), XLB Medium-Cap ETF $1,000 (10%), XLK Technology Sector ETF $1,000 (10%), REET Real Estate ETF (Hedge) $600 (6%), XLB Materials Sector ETF $400 (4%), TAN, ARK, ICLN Clean Energy Sector ETF

$200 (2%), Individual Stock $200 (2%), Individual Stock $200 (2%), Individual Stock $200 (2%), Individual Stock $200 (2%), Individual Stock

This is a very diversified breakdown and one that I first used when I started investing. I now have just over $50,000 in my portfolio, so I have a lot more ETFs and stocks on my list, but for $10,000 this list will get you started and then some. Even if you set it and forget it, I can just about promise that your portfolio will be looking very pretty in a couple of years.

Investing is all about the long term and compounding over time. If you leave your investments alone, they will grow more. That’s just how it works. The highest growth will be achieved by leaving it alone (hopefully buying more and diversifying more) for many decades to come. By the time you’re 40 or 50 or 60, you’ll have a very large sum of money in your savings.

Be patient.

Investing is not a sprint, it’s a marathon.

Photo by Andrea Leopardi on Unsplash

You probably clicked on this article to learn about a way to make a profit on $10,000 in the short term. Sorry to disappoint. There’s no logic there. That’s not reality. Reality is setting yourself up to succeed by the time you need it most. The future. The reality of investing is that it takes many years and many ups & downs to truly grow any amount of money. The sooner you understand that and the sooner you invest your money in a way that is diversified and untouchable, the happier you’ll be.

No one wants to worry about their stock portfolio every hour of the day. It’s exhausting! So don’t, diversify well enough that you don’t have to look at it every day or even every week. If you diversify, then you really don’t have to look at your portfolio ever! And then, years down the road when you need some money, you have a bunch of money.

Diversification and ETF talk can be a little dry, and I apologize for that. But these topics… diversification…are necessary to understand. You absolutely need to understand and practice the discipline of NOT taking out your money or selling your investments in the short term. It’s not an easy thing to grasp and it’s even harder to actively do. It took me many months to realize that.

And again, this is just my experience. Take or leave my stock breakdown, but please try to understand diversification. It’ll change the way you invest (not just in stocks) and it’ll make sure you always stay within your financial means.

So I’ll leave you with this plan:

1. Get $10,000.

2. **Diversify **with ETFs and hedges.

3. Practice the 10% rule.

4. Only buy more, never sell.

5. Don’t touch it, leave it alone.

6. Let it compound over many years.

7. Stick to your plan.