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Ways to start investing $10,000

Investing for the future is one of the building blocks of your personal financial security. 

April 10, 2024

Written by Robb Engen

Key takeaways

  • Identify your time horizon and goals for your money.
  • Assess your risk tolerance and use that information to inform your diversification strategy.
  • Select the appropriate account type for your tax situation.
  • Hold your investment for the term you decided upon and resist the urge to make changes in the face of uncertainty.

Ways to start investing $10,000

Along with growing an emergency fund and paying off high-interest debts, investing for the future is one of the building blocks of your personal financial security. Investing makes it possible to potentially grow your money at a faster rate than simply holding it in a savings account.

Let's say, for example, you've got $10,000 you want to invest. Here's how to get started!

Is $10,000 enough to start investing?

Definitely! In fact, you can start with a much smaller initial investment. Many financial institutions, including Tangerine, let you invest with minimal funds. You can then grow that investment over time with regular, automatic contributions to your account.

But back to that $10,000. When should you invest it? According to the old saying, the best time to plant a tree was 20 years ago. The second best time is now. You can think similarly about investing. It might not seem like you can do a lot with $10,000, but consider this example:

Let's say you're 25 years old, and you've scraped together $10,000 to invest for retirement. You expect to retire in 40 years at age 65. You invest your $10,000 in a globally diversified portfolio containing 80% stocks and 20% bonds. Let's also suppose, in this hypothetical example, that you earn an average rate of return of 7% per year.

Guess what? Your $10,000 turns into nearly $160,000 by age 65.*

Now, imagine you contribute an additional $10,000 to your investment portfolio every single year until retirement. That means you'll contribute $400,000 ($10,000 x 40) and turn those contributions into more than $2.25 million.*

That's the power of investing.

Starting small can be better than not starting at all. Put your $10,000 to work for the long term.

*These examples assume a steady rate of interest over time, compounding quarterly, without paying any fees. 

Can you turn $10,000 into $100,000?

Yes, it's possible, as the hypothetical example above illustrates, but investments do come with some risks attached, so prolonged growth is not a sure thing. But perhaps a better question is: how long will it take?

Let's look at some numbers. 

The S&P 500 index of the 500 top publicly traded companies in the U.S. has produced an annual average return of more than 10% since its inception in 1957 to the end of 2023. Of course, investing in the stock market comes with higher risks, so high returns aren't guaranteed. Long-term government bonds and treasury bills, by contrast, are considered much safer investments, delivering a more predictable and stable annual return that avoids the highs and lows of the stock market.

The "Rule of 72"

Now, let's try to figure out how long it would take to double your money. There's a quick and dirty formula you can use. It's called the "Rule of 72." All you have to do is divide the number 72 by the expected annual rate of return of an investment. That will give you an idea of how long it will take to double your money.

For example, 72 divided by 6% = 12 years to double your money.

The higher the rate of return, the fewer years it takes to double your money.

72 divided by 12% = 6 years to double your money.

So, can you turn $10,000 into $100,000? That's a lot of doubling, but it's certainly possible, given enough time. If you invest your initial $10,000 into a portfolio that earns an annual rate of return of 8%, in 30 years you will have $100,000.*

Of course, you could take a riskier approach to try and turn your $10,000 into $100,000 even faster. We've all heard stories about investors who got huge returns betting on higher-risk stocks, real estate, or cryptocurrency and other alternative investments.

Keep in mind that the more risk you take on to achieve your goals, the more chances you have to lose money rather than make money. If you're serious about investing for retirement, then a sensible, low-cost, globally diversified portfolio of stocks and bonds will give you a more predictable outcome that's less likely to keep you up at night.

*This example assumes a steady rate of interest over time, compounding quarterly, without paying any fees. 

Why invest?

I can give you two good reasons to invest your money.

First, we start our careers with a lot of earning potential and little to no financial capital (savings). As we age, our earning potential depletes, and we (hopefully) accumulate financial capital by saving and investing.

When we retire, we don't have any more earning potential, so we need to make sure we have enough financial capital to sustain us for the rest of our lives. We invest throughout our careers to convert earning potential into financial capital that will sustain us in retirement.

The second reason is the silent wealth destroyer known as inflation. Costs of goods and services rise over time. If they didn't, then we could happily stash cash under our mattress for decades and then buy the exact same amount of goods and services as before.

But that's not how inflation works. Inflation increases our cost of living, often by an average of 2-3% per year. That means something that costs $10,000 today will cost $20,000-$30,000 in 40 years.

Cash under our mattress can only buy less than one-third of what it could 40 years ago, according to the Bank of Canada's inflation calculator.

Money parked in a savings account earning an average of 1.5% interest can only buy approximately three-fifths of what it could 40 years ago.

Investing your money in a diversified portfolio, and contributing to it every year, gives you a better chance of outpacing inflation and growing your purchasing power.

Of course, there's also the goal of investing to give future you a comfortable retirement. Hey, lifestyle can be a reason, too!

Getting started with investing

Understand that investing means different things to different people. Some are comfortable investing in stocks. Others prefer the traditionally safer bet of bonds. And many investors opt to combine both types of assets by purchasing mutual funds or ETFs (Exchange-Traded Funds).

Whatever you choose, make a plan before you get started.

Understanding your risk tolerance

Okay, so you're ready to invest $10,000. First, let's have a quick chat about risk.

Risk and return are joined at the hip. Buying an individual stock can be inherently riskier than buying a diversified pool of stocks and bonds. Why? In the latter case, you're spreading the risk around. Some of those stocks or bonds may fall in price while others rise or stay flat — the gains help to offset the losses. But if you put $10,000 in a single stock, any fluctuation in the price will affect your entire portfolio.

It's important to carefully assess your risk tolerance to build the portfolio that's right for you. Stocks traditionally perform better over time than bonds, but if a portfolio of 100% stocks is going to cause you stomach-churning anxiety, then perhaps you'd be more cut out for a classic, balanced portfolio of 60% stocks and 40% bonds.

There's no harm in choosing a less risky portfolio. Think of it this way: Choose a portfolio that has the potential to achieve your required rate of return AND allow you to sleep at night.

Investing with purpose

Investing is generally a long-term game. Stocks and bonds trade hands daily and prices are constantly updated. Sometimes, prices go down. 

Know this: If you need to access your money in less than five years, depending on your risk tolerence, you might want to park your money where the returns carry less risk. With a short-term investment like a money market fund, or by using something like a high interest savings account or a GIC, your money is not subject to the volatile ups and downs of the market. Instead, the amount of interest you earn is predictable and, in the case of GICs, guaranteed. You wouldn't want to put your money in a portfolio of stocks, only to have to withdraw it during a market downturn. You would risk losing money.

If you're investing for retirement — a goal that may be decades away — then you can set your sights on the long term, giving your portfolio time to weather the ups and downs of the market.

The key is that you identify your purpose. For example, if you're a long-term investor and you invest with that timeline in mind, then you shouldn't be swayed by short-term market fluctuations and can stick to your goals.

Assessing your financial goals

Before you invest $10,000, you should consider whether some of that money is needed elsewhere. 

Do you have high interest credit card or consumer debt? Paying off debt with interest at rates of 19% or more will easily give you a better rate of return than what you could expect to receive from an investment in the short term. And, once that debt is paid off, you get instant cash flow relief and can start allocating those dollars to other goals (including your investments!).

Do you have emergency savings? Most people need to build a financial safety net for unexpected expenses or a temporary loss of income. Consider building up enough to cover one to three months' worth of your expenses in your emergency reserves before you invest a lump sum of money.

Finally, do you have any upcoming planned one-time expenses requiring a lump sum? Maybe you need a new vehicle, or you know you're going on a pricey trip next year, or you're planning a wedding, or you need to do some home repairs.

If you invest the whole $10,000 now, how will you handle those expenses when the time comes? Consider the big picture to determine what money is needed in the near-term, and what you can commit to longer-term investing.

GIC rates as high as 5.20%*

Choose a term option to meet your needs

Investment options for $10,000

There are many investment options to choose from today. In some ways, this is great for investors. In other ways, it's paralyzing. Here's a rundown of options.


Self-directed investing platforms and trading apps allow you to buy and sell stocks at the click of a button or tap of your thumb.

You can invest your $10,000 into one or a handful of individual stocks to whet your appetite for investing. But know that this is an riskier approach. Individual stocks can vary widely in performance. The worst performers can even go to zero.

Besides, $10,000 may not be enough to effectively diversify your investment. And splitting it up amongst 20 companies ($500 each) can be a lot to manage and potentially cost a lot in trading commissions — the fee you pay every time you make a trade.


When you buy bonds, you're essentially loaning money in exchange for two promises:

  1. The promise of a "coupon." That's the interest paid to you (typically) twice a year for the duration of the bond.
  2. The promise that you'll receive your principal investment back at the end of the loan.

You can buy federal government bonds, provincial bonds, municipal bonds and even corporate bonds. Some are riskier than others. Federal government bonds (both Canadian and U.S.) are the safest, whereas corporate and municipal bonds would be more risky. Note that foreign government bonds (outside of North America) may carry additional risks. Riskier investments may pay a higher rate of return, but there's a greater chance you may not get your money back.

An easy way to buy bonds is through a mutual fund or ETF rather than buying individual bonds. Bonds have a lower expected rate of return than stocks.

Mutual funds

Mutual funds are a pool of stocks and/or bonds that allow investors to diversify across hundreds or even thousands of individual securities with a single fund.

An investor with $10,000 could build a diversified portfolio using a single balanced mutual fund. This could be a sensible place to start.

One goal of mutual fund investing is to keep costs low. Some mutual funds in Canada charge fees in the 2.5% range, which takes a bite out of your returns. Every fund will take a bite — that's the cost of doing business. But you want to reduce that bite to a nibble, if you can.

Mutual funds also don't typically come with trading commissions — they can be free to buy and sell. That makes them an appealing investing vehicle for an investor making small, frequent contributions to their portfolio.

Exchange-Traded Funds (ETFs)

ETFs are like mutual funds in that you can get a diversified pool of investments in a single package, but they trade like stocks on an exchange. However, they differ in their fee structures. 

For the most part, they're cheaper than the typical mutual fund. That's a good thing for investors, whether you're starting out with your first $10,000 or you've built up a portfolio of $1 million.

ETFs come in every flavour: global stocks. Canadian stocks, U.S., international or emerging market stocks. Canadian bonds. U.S., international, or global bonds. REITs. Gold. Oil. You name it, there's an ETF for it.

In general, ETF investors should focus on keeping their costs low, diversifying broadly, and sticking to a risk-appropriate portfolio.

Socially Responsible Investing (SRI)

More and more investors are looking for ways to invest that align with their values around environmental, social, and governance issues. 

Usually found in a mutual fund or ETF, investors can now attempt to build a socially conscious investment portfolio with just one to three funds. Be mindful of the criteria used to build the portfolio — there's no single agreed-upon formula for what constitutes SRI.

Starting a small business

Investing in yourself is rarely a bad option. These days, $10,000 may go a long way. 

Whether it's to invest in some equipment for a lawn care or snow removal business or to set up your own online store, you could put $10,000 to work and start your own small business or side gig.

Registered accounts

We've put the cart before the horse — or the investment holdings before the investment container. We need to decide which account type to park this money in before we invest it. 

In Canada, your options include a Registered Retirement Savings Plan (RRSP, or RSP at Tangerine), a Tax-Free Savings Account (TFSA), a taxable or non-registered account, a Registered Education Savings Plan (RESP) and now a First Home Savings Account (FHSA).

Once you choose your account type, you can invest the money.

Registered Retirement Savings Plans (RSPs/RRSPs)

RSP contributions are tax deductible, so it makes sense to contribute when your taxable income is high — at least higher than it will be when you withdraw the funds in retirement. Your investment grows tax-free inside an RSP and is only taxable upon withdrawal. However, if you participate in the Home Buyers' Plan (HBP), you can withdraw up to $35,000 from your RSP tax-free, as long as you pay it back within the specified time frame. 

Tax-Free Savings Accounts (TFSAs)

A TFSA contribution doesn't give you a tax deduction, but you can withdraw the money tax-free at any time. Your investment also grows tax-free inside the TFSA. 

It may make sense to choose a TFSA over an RSP if your taxable income is lower than you expect it to be in the future.

Non-registered Accounts

RSPs and TFSAs have contribution limits, so if you reached those limits and still have extra cash flow to invest, consider a non-registered account. It's taxable because, well, any investment income earned is taxable to you in the year received. And, if you sell an investment for more than you purchased it for, you have what's called a capital gain. Come tax time, you'll have to pay taxes on that gain.

Registered Education Savings Plan (RESP)

RESPs are a way to save for your child(ren)'s education. The federal government will match contributions by 20% (up to $500 in matching grants per year), so savvy parents looking to make the most of this account will aim to contribute $2,500 per year to capture the $500 grant. Note there's a limit of $7,200 in lifetime grants, which would be reached once you've contributed $36,000.

First Home Savings Account (FHSA)

A new account introduced in 2023, the FHSA is for first-time homebuyers to save up a down payment. Contributions to an FHSA will reduce your taxable income (just like an RSP), and you can withdraw the money tax-free to purchase an eligible home (just like a TFSA).

Diversifying your investment*

They say diversification is the only "free lunch" in investing. By spreading your money across different sectors, regions and asset classes, you reduce the risk of any one investment performing poorly and derailing your plan.

Strategies for diversification

An equity investor can diversify their portfolio by using a broad-based mutual fund or ETF that tracks the entire S&P 500 — not one that only focuses on Canadian stocks or U.S. stocks.

A bond investor can take a similar approach by purchasing an aggregate bond ETF that holds a mix of long, medium, and short-term government and corporate bonds.

*Diversification does not guarantee a profit or eliminate the risk of loss.

What's next for your investment?

Once you've chosen the right account type, the investment product, and the appropriate asset allocation for your risk tolerance, the key to stick to your timeline and patiently wait for it to grow.

An old adage says your portfolio is like a bar of soap. The more you touch it, the smaller it gets. Think about this as markets move up and down, and your emotions take you on a roller coaster ride. Leave that bar of soap alone and remember the big picture.

Final thoughts

Investing doesn't have to be complicated. Today, you can have access to the entire global stock market through mutual funds or ETFs.

Whether you're starting with $1,000, $10,000 or $100,000, it's important just to get started. Along the way, you may be tempted to stray from your carefully chosen asset mix if your investment drops in value or if other investments increase more rapidly, but resist the urge to tinker with your portfolio too often.

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