Cash on hand in case of an emergency -- three to six months' worth of expenses is a good rule of thumb -- is a necessity. Even adding part of your $10,000 to a savings account (and leaving it alone for a rainy day) is a solid start to an investment journey.
This may not feel exciting to you. However, keeping cash on hand is still a good investment if it means avoiding taking out a loan (such as credit card debt) in a time of need. Your return on investment comes from the interest earned on your account and from avoiding high-interest-rate payments on future debt.
Not sure where to keep it? Motley Fool Money rates and reviews the best high-yield savings accounts available today so you can make sure your emergency fund is working as hard as possible while it sits.
2. Pay off high-interest loans
Paying off debt might not seem like an investment. However, along with building an emergency cash cushion, it's essential to eliminate high-interest debt. Liabilities and interest payments can erode your ability to grow your wealth. Money headed to a bank in the form of an interest payment reduces what you are able to save for yourself, so paying off high-interest debt can have a high return.
It's worth noting that you don't need to offload all debt as quickly as possible. A mortgage on a home, for example, typically bears a lower interest rate. Though paying a home off quicker than the term may be a good use of money, especially since it tends to be the single largest cash outflow for households in an average month.
But first, prioritize any debt with a higher interest rate. Credit cards, for example, should be a primary target since they usually bear interest rates many times higher than a mortgage (often about 20% annually). If you have a lump sum, funneling it into paying down debt can be a great long-term investment -- and one that can liberate a budget from interest payments.
3. Fund your retirement account
No matter what retirement looks like for you, a tax-advantaged retirement account is one of the most powerful tools available for long-term wealth building.
Individual retirement accounts (IRAs) are well-suited for lump-sum contributions. Traditional IRAs may allow a tax deduction and let your money grow tax-deferred until withdrawal. Roth IRAs offer no upfront deduction but provide completely tax-free withdrawals after at least five years. Both are designed to be accessed after age 59 1/2, though Roth contributions (not earnings) can be withdrawn early without penalty. Annual IRA contribution limits are $7,500 in 2026, or $8,600 if you're 50 or older.
Not sure where to open one? Motley Fool Money has reviewed the best IRA accounts available so you can find the right fit and start putting your money to work.
If an employer offers a match -- in which the company makes a contribution to your account based on the amount you deposit directly from your paycheck -- taking advantage of that money is a must. If you later leave that job, you can roll a company-sponsored retirement plan into a personal IRA as described above.
