Starting Over, How I'd Invest My First $10,000
How I'd invest $10K to get rich
Introduction
Investing can be such a powerful tool to grow wealth and achieve long-term financial goals. As I’ve noted in past newsletters, I started investing about 30 years ago and made my fair share of mistakes starting out. Some were educational. Others were just… expensive therapy.
So let’s imagine I’m starting fresh today with $10,000. That’s a solid chunk of change — not life-changing, but certainly enough to do some real damage (in a good way). And since I’m now guiding my daughters on their own financial paths, I’ve been revisiting the basics with a bit more wisdom and slightly fewer YOLO moves. This newsletter will walk you through the essential steps I’d take today with my first $10,000, or rather, what I’d do today if my daughters handed me their $10,000 and said, “Here, make this grow, finance wizard.”
Disclaimer: This is NOT financial advice. I am just sharing my strategies, investments, stocks, and index fund strategies, what I'm buying, and where I plan to take those investments. Everyone’s financial goals are different. No financial decisions should be made solely on this newsletter, which is for informational and entertainment purposes only and is not intended to be a substitute for advice from a professional financial advisor or qualified expert.
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Before You Begin Investing
Before you even think about buying stocks or funds, let’s get the grown-up stuff out of the way. You know, the stuff that keeps you from eating ramen for the rest of your life. Make sure you’ve got a solid financial foundation. This means:
Contribute to an employer-matched 401K plan, because turning down free money is a crime.
Build an emergency fund, so your next flat tire doesn’t turn into a financial meltdown.
Pay down high-interest debt, since credit card interest is basically a reverse compounding nightmare.
Max out IRA contributions. Your future retired self will thank you from a golf cart.
Define Goals
What do you want your $10,000 to achieve? Pay for a down payment on a house? Retire early? Build generational wealth? Brag to your friends at brunch?
Your goals will influence your investment timeline and risk tolerance. In this newsletter, I’m investing for long-term growth, not YOLO meme stocks.
Understanding Investment Basics
With your foundation in place, let's explore some key investment concepts.
Risk vs. Return: Want to double your money overnight? Cool—so does everyone else. But usually, higher potential returns = higher risk. Understanding your risk tolerance (how comfortable you are with the possibility of losing money, or how many nights you’re willing to cry yourself to sleep) is crucial. As a beginner, it's often wise to start with a more conservative approach. Think reliable, not reckless.
Diversification: Don't put all your eggs in one basket! This isn't just a folksy saying; it's sound financial advice. Diversification means spreading your investments across different asset classes (like stocks, bonds, and real estate) and within those classes (different industries, company sizes). This helps reduce risk. Because if one egg cracks, you still have an omelet. If all of them crack… well, then you’re just left with a mess.
Compounding: This is the real MVP. It’s when your money makes money, and that money also makes money, and eventually your portfolio is working harder than you do. Future you will thank you, probably with a nicer car.
Where I’d Actually Put the $10,000
OK, enough of the blah-blah, let’s get to the good stuff. For a beginner, simplicity and diversification are key. So I’d start with low-cost index ETFs. You don’t need to be a stock-picking savant—just piggyback off the market with funds that mirror major indexes. These glorious creations hold a diversified basket of stocks or bonds, aiming to mirror the performance of a specific market index (like the S&P 500 or Nasdaq 100). They offer instant diversification at a low cost. You don't need to pick individual stocks; you get exposure to hundreds or thousands of companies with a single investment.
Last year, I posted my lazy two-fund portfolio to get rich, which consisted of a broad market ETF in the Vanguard S&P 500 ETF (VOO), and a growth ETF in the Invesco QQQ Trust (QQQ, which mirrors the Nasdaq 100). Those would be my core ETFs for the $10,000 investment, although there are plenty of broad market and growth ETFs that would work.
While I find VOO to be safe over the long run, I would also want to add a safe ETF that consists of higher-dividend-paying companies, and one of my favorites is the Schwab US Dividend Equity ETF (SCHD).
I have descriptions of VOO and QQQ in my newsletter about the two-fund portfolio to get rich. As for SCHD, think of this as your responsible uncle who wears socks with sandals and lectures you on “value.” Less tech, more stable industries like financials, consumer staples, healthcare, and industrials. It’s less risky, which protects a portfolio when the market is in a downturn. However, it means that it will usually have weaker performance in strong bull markets, like the one we're currently riding (hopefully). SCHD has a dividend yield of 3.75% and has returned 5.61% this year, including dividends. Not going to make you rich overnight, but it won't make you homeless either.
Finally, you want to have cash available, and so I’d make sure to have a high-yield savings account. This is in addition to an emergency fund. I posted my top 5 high-yielding savings accounts here, with CIT Savings being the one I’m currently using.
Breaking Down The Portfolios
Under 30: The "YOLO with a Plan" Portfolio
If I’m starting under 30, time is on my side, and I’ve probably got questionable taste in crypto, so I’m going to be more aggressive. Think of it as having fewer responsibilities and more willingness to gamble (responsibly, of course). The mix would look something like:
60% QQQ: Because why not ride that tech wave like a pro surfer?
30% VOO: For some good old-fashioned market stability.
10% Cash: For emergencies, or that unexpected avocado toast craving.
30-40: The "Still Got It, Kinda" Portfolio
At this age, I still have time on my side, but I’d go with a more balanced approach, while still being a little aggressive. Because who wants to be boring? The mix would look more like:
50% VOO: The reliable workhorse.
30% QQQ: Still chasing some of that sweet growth.
10% SCHD: Time to sprinkle in some income and stability.
10% Cash: For, you know, adulting.
40-50: The "Mid-Life Crisis, But Financial Edition" Portfolio
This is the age range I’m at (barely), and it’s time to get more conservative because retirement is closer than when I turned 21. With that in mind, I’d go with:
50% VOO: Still the foundation.
20% QQQ: Acknowledging that growth is still nice, but not the only thing.
20% SCHD: Hello, dividends! My new best friend.
10% Cash: Because spontaneity at this age usually involves a new set of golf clubs, not a trip to Cancun.
50+: The "Rocking Chair and Dividends" Portfolio
This is obviously a wide range, but basically, the older I am, the more I’m in SCHD and cash. Because who needs excitement when you have consistent income? So for 50-60, it would look like this, with the SCHD / VOO percentages geared more heavily to SCHD the older I am (because who doesn't love a good dividend check?):
40% VOO: Still keeping a toe in the broader market.
40% SCHD: Hello, stable income! My really new best friend.
10% QQQ: A nod to the good old days of aggressive growth.
10% Cash: For, well, everything.
Conclusion
Again, this is what I’d do starting with $10,000, and I have absolutely no idea what anyone else should do because I don’t know their situation. I'm not a mind reader, unfortunately. But investing that first $10,000 is an exciting step towards financial independence.
That's it for this week! As always, no financial decisions should be made solely on this newsletter, which is for informational and entertainment purposes only and is not intended to be a substitute for advice from a professional financial advisor or qualified expert. If you haven’t already, please subscribe to this newsletter below and never miss an update: