Let me start by saying if I could give you a guaranteed 10% return on investment I wouldn’t be writing this article – I’d be sitting on a beach somewhere with millions in my bank account.
And anyone who claims anything different is a liar.
Barring U.S. government Treasuries, there’s really no such thing as a guaranteed rate of return.
Every investment you make entails a risk/reward trade-off.
The lower the risk, the lower the potential return (U.S. Treasuries). The higher the risk, the higher the potential return (high-growth stocks like Tesla).
While I can’t guarantee a 10% return on investment (the first 2 options on this list are as close as you’ll come), there are several investments that stack the deck heavily in your favor of achieving the coveted 10% return on investment.
These are the criteria of the investments we want to make:
- High chance of success (low risk)
- Modest-high returns
Here’s my list of the 10 best investments for a 10% ROI.
You can invest in million-dollar paintings for as little as $1,000 on Masterworks.
Since 2000, high-end art has outperformed the S&P by 2.5x, averaging nearly 30% per year.
Art can be volatile and illiquid, but the risk/reward profile is difficult to match.
How to Get 10% Return on Investment: 10 Proven Ways
1. Paying Down High-Interest Loans
While paying down debt doesn’t seem like an “investment”, it will net you one of the highest guaranteed returns you can earn.
If you’re carrying a balance on a credit card with a 20% interest rate, paying down that balance is equivalent to receiving a 20% investment return. That’s the fastest and easiest 20% you’ll ever earn. Once you’ve taken care of your debt, then you can start to think about how to invest 1000 dollars.
However, most people with credit card debt can’t afford to pay down their credit card balances (if they could, they wouldn’t have the debt in the first place). If that’s you, look into loan consolidation and/or opening a 0% APR credit card:
A) Debt Consolidation Loan
A debt consolidation loan allows you to roll multiple debts into a single payment which can save you a lot of money. Instead of paying off 3 credit cards, each with an interest rate of more than 20%, you can apply for a consolidation loan with an interest rate of 10% or less. Use the funds to pay off your credit cards and pay down your single loan.
B) 0% APR Credit Card
A 0% interest, balance-transfer credit card, if you qualify, allows you to transfer all of your debt onto this card and pay down the balance in full without paying a dime in interest before the promotional period ends (typically 1 year). This saves you even more money than a debt consolidation loan, though borrowers with credit scores below 690 typically do not qualify.
Paying down high-interest debt is one of the single best ROI investments you can make. If you need help saving money, head to our article on the best apps to save money.
2. U.S. Government I-Bonds
Series I Bonds are U.S. government-issued savings bonds created to protect your cash from being eroded by inflation. When inflation is high, I-Bonds can offer some very high guaranteed rates of return.
Given the current inflationary environment, more and more investors have turned to I-Bonds (myself included). Rates have soared to an eye-popping 9.62%. Today, I-Bonds offer the closest thing to a guaranteed 10% return on investment.
Here are the details:
- Interest compounds semiannually and is made up of a fixed and variable interest rate. The variable interest rate tracks inflation and is adjusted every six months.
- I-Bonds are only available to U.S. citizens.
- You can purchase up to $15,000 of I-Bonds per year.
- I-Bonds may be redeemed after 12 months. If redeemed within 5 years of purchase, you will forfeit 3 months of interest.
- You can purchase I-Bonds online at TreasuryDirect.gov.
I Bonds are one of my favorite safe investments with high returns.
3. High-End Art
Beyond the status signal and inherent beauty, there’s a reason high net worth individuals love investing in art.
Since 2000, high-end art returns have outpaced the S&P 500 by an eye-watering 250%.
You might not be able to afford a multimillion-dollar Monet or Picasso, but companies like Masterworks allow you to purchase fractional shares of paintings for as little as $1,000.
With net annualized realized returns of 29.03%, Masterworks offers one of the best returns on money on this list.
4. Stock Market Investing via Index Funds
Individual stocks can return well over 10%, but investing can be risky – there’s no guarantee you’ll make money.
Rather than invest in a single stock, index funds offer a convenient way to diversify across a large basket of stocks. By doing so, you can earn more predictable returns.
For example, you can buy Vanguard’s $VOO ETF and own all of the companies in the S&P 500 with one purchase. Since 1950, the S&P 500 has had an average annualized return on investment of 11.14%.
To put this into perspective, $100 invested in the S&P 500 in 1950 would be worth more than $217,000 in 2022. That’s a pretty good rate of return.
Want to buy an index fund?
You need a stock brokerage.
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While index funds are considered a relatively safe investment over a long time horizon, short-term volatility can negatively impact the value of your investment.
For this reason, a good rule of thumb is to not invest any money in stock market index funds that you’ll need within the next five years.
Index funds are the fastest and easiest way to diversify your stock portfolio. If you want to automate your investing even further, consider using Betterment.
Most people know that investing is a good thing but have no idea how to get started. Instead of learning the ins-and-outs of investing, asset allocation, tax-loss harvesting, and more, Betterment gives you a simple questionnaire with questions about your time horizon and financial goals.
After the questionnaire, Betterment will customize a portfolio of low-cost index funds perfectly suited for you. From there, you can set a monthly auto-deposit to invest in your portfolio and start growing your net worth on autopilot.
Betterment charges just 0.25% annually ($25 for every $10,000 invested).
It’s by far my most recommended product.
5. Stock Picking
While buying index funds makes diversification simple and lowers your risk, it also caps your upside.
The best-performing stocks drive the vast majority of an index fund’s returns.
From 1926 to 2009, stocks returned 9.6% per year. If you excluded the top 25% of stocks, annual returns would have been slightly negative.
Here’s what that means: The bottom 75% of stocks were a massive drag on the top performers.
Over that 83-year period, the top 25% performing stocks averaged a staggering 50% annual return.
Stock picking is all about finding which stocks are most likely to outperform the market, buying those, and ignoring the rest. On WallStreetZen, we help you uncover the stocks with the greatest potential to be long-term winners.
WallStreetZen is perfect for someone who wants to build their own portfolio of high-quality stocks.
If you want to take a ‘done-for-you’ approach to your stock picking, The Motley Fool is a service which has vastly outperformed the S&P 500 since its inception:
You may be wondering, how much money can you make with stocks?
6. Junk Bonds
When investors are looking for a safe investment, they typically turn to bonds. However, investment-grade bonds offer low returns (around 3-5% in the last decade).
While junk bonds don’t offer the same level of security as investment-grade bonds, they make up for it with higher average returns.
Rating agencies like Moody’s and Standard and Poor’s grade businesses on their credit-worthiness. The lower the quality of the company, the higher the interest it will pay on the bonds it issues.
Similar to investment-grade bonds, your online brokerage should allow you to invest in junk and lower-grade bonds.
If you’re wondering how to get a 10% investment return, junk bonds may be the solution you’re looking for. Be sure to do your homework before investing, though.
7. Buy an Existing Business
Buying existing businesses is, in my opinion, one of the most overlooked investments.
Consider this: There are dozens of small businesses in your town generating hundreds of thousands of dollars each year in revenue.
Many of these owners are willing to sell for 3x-5x profit, while the public companies we are buying on the stock market are selling for 20x earnings. Plus, many of these businesses have opportunities to instantly increase their revenue and/or profitability, making them instantly more valuable.
There is, however, much more work that is needed to run a business (as opposed to buying a stock) and there’s more idiosyncratic risk (one business will cost you hundreds of thousands of dollars instead of spreading that out across 500 businesses in an index fund).
But you’re buying a business with existing customers and positive cash flow which could generate you hundreds of thousands of dollars in profit every year.
Remember, investing = Balancing risk/reward
You can look for local businesses to buy on sites like LoopNet and Craigslist or by asking owners directly if they’re interested in selling or know of anyone who is.
If you’d rather invest in someone else’s startup, take a look at our Equitybee Review.
8. Peer-to-Peer Lending
Peer-to-peer lending consists of regular people loaning money to people in need of a loan. Individuals who either do not want or are unable to qualify for a traditional bank loan may turn to peer-to-peer lending.
The risks and returns of peer-to-peer lending are similar to those of junk bonds.
Because of the risks involved in peer-to-peer lending, returns can average in excess of 14%. One lender, My Constant, offers an APR of up to 18%.
For those wondering how to get a 10% return on investment, peer-to-peer lending offers a creative solution for both investors and those in need of loans.
9. Real Estate Investment Trusts (REITs)
REITs are a way to get exposure to the real estate market without going through the trouble of actually buying and managing property. Plus, you can get started with only a few dollars.
A REIT is a company that owns income-producing real estate and pays out shareholders at least 90% of its annual taxable income.
Since REITs are public companies, you can purchase REITs in your brokerage account like you would stocks. Alternatively, check out our Fundrise review for an easy way to get into REITs and other types of real estate investment funds.
On average, REITs offer a good rate of return, outperforming the broader stock market during periods of high inflation by a 3.6% margin. Stocks (blue) do, however, tend to outperform REITs (yellow) over the long haul:
REITs are also highly sensitive to interest rate changes and can overexpose you to specific real estate subsets (like apartments, offices, or medical facilities).
10. Real Estate
Instead of buying a REIT, you can skip the intermediary and invest directly in real estate yourself.
Direct real estate investments offer more tax breaks (deductions, 1031 exchanges, write-offs, etc.) and give you more control over your investment than REIT investments. Additionally, owning real estate usually results in a greater ROI.
You can buy single-family homes, multi-families, office spaces, or land and earn income from rent and appreciation. Given the number of millionaires in real estate, it may have the largest “margin for error” of any asset class available – there’s more than one way to get rich.
The biggest barrier to real estate investing is lack of capital – it’s expensive to get started.
Like art investing, however, this too has changed in recent years with companies like Yieldstreet. Yieldstreet allows you to invest in real estate with as little as $10, but you can unlock greater access with a deposit of $1,000 or more. Fees are around 1% per year.
Yieldstreet makes it easy to start investing in real estate with its low investment minimums and easy-to-use platform, all with zero management required. Real estate is one of the best safe investments, and Yieldstreet makes accessing this asset class easy.
And if you’re interested in farmland investing, check out Danny’s AcreTrader review.
BONUS: Gold IRAs
Over the last 20 years, gold has returned 9.6% per year. Although this falls just short of our 10% threshold, it’s worth mentioning on this list.
Gold is an asset many investors know should be in their portfolio, but one that isn’t often included. Most people know its history of being a store of value and generating consistent returns. Plus, it’s a finite physical commodity, making it a natural inflation hedge (especially important in 2023).
Investors who buy gold do so for a long-term inflation hedge and a place to safely park money. Given the long-term nature of the investment, most investors choose to purchase gold via an IRA. The top gold IRA providers are:
Take the time to open an IRA and buy some gold. It’s an asset that has given investors stable, inflation-hedged returns for a long time.
Final Word: How to Get a 10% Return on Investment
Remember: Investing is always about balancing risk and reward.
Purchasing I-Bonds is less risky than buying a fractional share of a Picasso, but it also offers lower potential returns. For the best ROI investments, buying an existing business or individual stocks can sometimes offer unbeatable upside, though you’re signing up for more due diligence and the potential for losses.
Pay off your high-interest loans before you invest in anything else. This will net you the best return on money.
Personally, I’m biased toward long-term stock market investing in both individual stocks and index funds. For me, it’s the perfect balance of risk and reward.
Hopefully I’ve offered you some viable options and answered your question about how to get 10% return on investment.
Read more: How to Invest 50k
Wondering where to invest now?
What investment can give me 10% return?
Stock market index funds can give you a 10% return.
Buying an index fund like Vanguard’s $VOO will give you exposure to the entire S&P 500 in a single investment and has averaged annual returns of 11.14%.
Is a 10% annual return realistic?
Yes, a 10% annual return is realistic.
There are several investment vehicles that have historically generated 10% annual returns: stocks, REITs, real estate, peer-to-peer lending, and more.
How do you make a 100% ROI?
The best way to make a 100% ROI is to invest in individual stocks.
Some stocks vastly outperform the market every year. The key is to identify these companies early and invest in them before their explosive growth. To find these companies, try using WallStreetZen or The Motley Fool.
Where to Invest $1,000 Right Now?
Did you know that stocks rated as "Buy" by the Top Analysts in WallStreetZen's database beat the S&P500 by 98.4% last year?
Our March report reveals the 3 "Strong Buy" stocks that market-beating analysts predict will outperform over the next year.