Ways to start investing $10,000
Successful investing isn't necessarily about having huge amounts to invest, picking the right stocks or having perfect timing. It’s about putting your money to work in alignment with your goals, your timeline and the level of risk you’re comfortable with. Over time, consistency is what drives results.
Let's say, for example, you have $10,000 you want to invest.
Left invested, $10,000 can quietly grow into something much bigger thanks to compounding, where your returns begin generating additional returns. Add regular contributions along the way, and you can potentially build real momentum.
Before you invest a dollar, though, it helps to zoom out for a second.
What is this money for?
When will you need it?
How comfortable are you with market ups and downs?
This guide will walk you through those questions so you can understand your options for investing your $10,000. Read on to get started!
Is $10,000 enough to start investing?
Definitely! In fact, it’s a great starting point.
It might not feel like a life-changing amount today, but given enough time, it can potentially grow into something meaningful.
Let's say you're 25 years old, and you've saved $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 could grow 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 could 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 generally considered much lower-risk investments, delivering a more predictable and stable annual return that avoids the highs and lows of the stock market.
What is 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 to 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 may 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 should you invest? Defining your investment goals
Before choosing investments, you need to know why you’re investing.
Are you saving for retirement? A home? Or simply building long-term wealth?
Your goal determines everything else.
For example, a retirement portfolio with a 30-year timeline can typically take on more risk, since there’s time to recover from market downturns. In contrast, if you’re saving for a down payment you’ll need in three years, you may want to prioritize stability over growth to minimize the risk of your balance dropping right when you need it.
Ask yourself:
• What is this money for?
For instance, money set aside for retirement might be invested in growth-focused assets like equities, while money for a short-term goal—like a wedding or home purchase—might be kept in lower-risk options.
• When will I need it?
If you’ll need the money within a few years, market swings matter more. But if your timeline is decades long, short-term volatility becomes less important.
• How much volatility can I tolerate?
Imagine your portfolio drops by 15% in a market downturn—would you stay invested, or feel the urge to sell? Your answer can help determine how much risk is appropriate for you.
Clear answers to these questions will guide your decisions on risk level, account type, and overall investment strategy—helping you choose investments that align with both your goals and your comfort level.
Assessing your investment risk tolerance
Risk and return go hand in hand.
Higher-risk investments like stocks or growth-focused ETFs potentially offer higher potential returns, but they come with more volatility. Lower-risk options like bonds or GICs are more stable, but with lower expected returns.
The mistake most investors make is choosing a portfolio that looks good on paper but feels terrible in real life.
If a portfolio weighted heavily towards stocks is going to keep you up at night during a market downturn, it’s not the right portfolio for you.
A balanced approach — something like a mix of stocks and bonds — is often a good starting point. You can always adjust to add more high-risk investments as you go.
The goal is simple: choose a portfolio that performs well enough to provide a strong chance of reaching your goals, but also is stable enough that you can stick with it when markets get rough.
Things to do before you start investing
Before you invest your $10,000, you might want to do a review of your finances to make sure your financial foundation is strong.
First, do you have an emergency fund? Aim for at least three to six months of expenses in a savings account so you’re not forced to sell investments if an emergency arises.
Second, do you have high-interest debt? If you’re paying 19% on credit card debt, you're losing any money you'd make from investing returns.
Finally, think about short-term expenses. If you know you’ll need this money in the next few years for a car, trip, or home repairs, it may not belong in the stock market.
What are your options for investing $10,000?
There are more investment options than ever, which can be both a good thing and a bit overwhelming.
Here’s a quick breakdown.
GICs
Guaranteed Investment Certificates (GICs) offer a fixed rate of return over a set period.
They’re low-risk, your principal is protected, and returns are predictable. The trade-off is lower growth and limited access to your money during the term.
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 investment 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 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.
A single ETF can give you exposure to thousands of companies around the world.
In general, ETF investors should focus on keeping their costs low, diversifying broadly, and sticking to a risk-appropriate portfolio.
Stocks
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.
Buying individual stocks means owning a piece of a company. You can invest your $10,000 into one or a handful of individual stocks to whet your appetite for investing. The upside can be significant, but so is the risk. 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.
Bonds
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 riskier. 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.
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 doesn’t always mean the stock market. Using a portion of your $10,000 to start a small business can open the door to earning income beyond traditional investments. You might spend the money on acquiring new skills, earning certifications, or purchasing tools and equipment. Whether it’s freelance work, consulting, or a small online venture, the goal is to create an additional income stream that can expand over time. While it might involve more effort and risk upfront, it has the potential to lead to meaningful, long-term financial growth and greater flexibility.
Choosing the right account type for your investments
Where you invest matters just as much as what you invest in.
In Canada, your main options are:
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 current taxable income is lower than you expect it to be in the future. TFSAs are flexible and ideal for most investors, especially those in lower tax brackets.
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.
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).
Registered Education Savings Plan (RESP)
An RESP is designed to help families save for a child’s post-secondary education, with government grants like the Canada Education Savings Grant (CESG) boosting contributions. While contributions aren’t tax-deductible, investments grow tax-deferred, and withdrawals are typically taxed in the student’s hands, often at a low rate.
Non-registered account
RSPs and TFSAs have contribution limits, so if you reach 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.
How to develop a long-term investment mindset
Successful investing is less about picking the right investment and more about sticking with a plan.
Markets will go up and down. That’s perfectly normal. Trying to time those movements is incredibly difficult, and most investors who attempt it end up worse off.
One of the most effective ways to manage risk while staying invested is through diversification—spreading your investments across different asset classes, sectors, and regions to help reduce the impact of any single market movement on your portfolio.
Dollar-cost averaging can further reduce risk. With this strategy, you invest a fixed amount at consistent intervals, like once a month, regardless of market conditions.
Over time, these strategies can help smooth out the effects of market volatility and reinforce a steady, long-term investing mindset.
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. An old saying is that your portfolio is like a bar of soap: the more you touch it, the smaller it gets.
Get up to a 3% bonus on your investments
Earn more for your investment journey. Start with 2% when you invest, then refer a friend to reach 3%.*
Investing $10,000 with Tangerine: where to start
If you’ve made it this far, you’re already off to a strong start.
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 investing $1,000, $10,000 or $100,000, it's important just to get started. Because whatever you invest today has the potential to grow into something much bigger over time.
