I Have $10,000 to Invest. Where Should I Put It?

If you have $10,000 to invest, you're in luck: your money has more potential than ever right now. Whether you're trying to get out of debt or save for retirement, here are five ways to put your cash to work.

1. Pay off credit card debt

The first step to securing your financial future is to free yourself from credit card debt. As Warren Buffett has famously said, a credit card is like a bad investment: The longer you hold on to it, the more it's costing you. It's not easy to get out from credit card debt, but a $10,000 payment could help you see the light at the end of the tunnel.

Let's say you have $10,000 in credit card debt on a card that charges 20% APR. You could pay this debt off by making monthly equal payments of $926, but you would end up paying about $1,116 in interest. By paying the full $10,000 upfront, you'd save money and free yourself for other money moves later, like investing for your retirement.

If you want to pay your credit card debt faster, using a 0% introductory APR balance transfer credit card could help. Click here for a full list of the best credit cards with balance transfer offers to help you conquer that debt for good.

2. Build an emergency fund

Emergency funds offer stability when the going gets tough. Most experts recommend keeping between three to six months' worth of living expenses in an accessible account, like a high-yield savings account. If you're currently without an emergency fund, saving all (or a portion) of your $10,000 could be a smart move.

3. Max out your retirement accounts

Retirement accounts, like 401(k)s and IRAs, can help you save for your future with huge tax advantages.

For example, a traditional 401(k) or IRA has the benefit of tax deferral, which means you don't pay taxes on investment gains or interest earnings until you're withdrawing money from the account later on. Contributions might also lower taxable income in the year they're made, which could reduce your tax bill.

Some employers offer a match on 401(k) contributions. If this is the case, don't let this opportunity pass -- take the match. You could potentially turn your $10,000 into a bigger sum to invest.

4. Open a brokerage account

A brokerage account is another way to save for the long term. Although brokerage accounts share similarities with retirement accounts, they're not the same product.

A brokerage account is a taxable account that lets you trade stocks, ETFs, mutual funds, and other securities. Brokerage accounts have no contribution limits and no withdrawal penalties. While retirement accounts also let you trade securities, they have tax advantages, contribution limits, and withdrawal restrictions.

TL;DR: If your goal is to save for retirement, open a retirement plan, like one of the best IRA accounts. But if you're saving $10,000 for a goal in the near future (like five to 10 years from now), a brokerage account might be a better option.

The options for brokerage accounts are seemingly endless. But they're not created equal. Some brokerage accounts are built for beginning investors, while others cater to day traders and experts. Check out our full curated list of best brokerages for beginners to get a trading platform that suits your needs.

5. Invest in yourself

Finally, if you're unhappy or restless in your career, using that $10,000 to further your education could help you get unstuck. You could put the money toward a traditional two- or four-year degree, or a crash course in a new skill, like basic programming. This could help you get a job that pays you more, or get involved in a field that brings you more satisfaction.

Investing $10,000 now instead of spending it could help open your future to new possibilities, including an early retirement. But don't stop at $10,000. Your chances of building wealth increase when you save consistently over long periods, even if it's a small amount.