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By Julia Lundstrom, CFP® | The Traders Wire
 
Earlier last week, US President Joe Biden set a plan into motion to forgive $10,000 in student loan debt for millions of borrowers who fall below a certain income cap.
 
This action, according to the White House, will cost the federal government an astounding $240 billion over the next decade. The number may only go up, given that the move also aims to cancel up to $20,000 in student loan debt for Pell Grant recipients.
 
For those lucky enough to have their loans forgiven, what are you looking to do with an extra $10,000? Well, we have a couple of ideas.
 

Open an IRA

For more conservative individuals, one might want to get a headstart on their retirement fund and consider opening and funding an individual retirement account (IRA).

An IRA is probably the next best thing if you don’t have a 401(k) plan at work. It’s a great option if you want better investment options than what you would normally get with your workplace retirement plan. WIth thousands of available options, IRA accounts let you pick and choose from a broad range of asset classes – granting your portfolio the benefits of diversification.

Build A Stock Portfolio

Taking on slightly more risk, $10,000 is perhaps the perfect amount to start a stock portfolio. It’s large enough for one person to experience considerable gains in the stock market and develop a genuine love and interest in the financial market.

On the other hand, $10,000 is not too large a sum that if you lose the entire fund, you can’t build it back.

While this may be a considerably riskier investment than simply starting an IRA, being young means you have the capacity to take on more risk – you’re at the wealth-building stage of your life. Whatever value you lose, you could just as easily make it back. 

Start Your Own Business

$10,000 can go a long way to starting your business, though it is undoubtedly the riskiest position you can take. Starting a business may be difficult but the lessons you learn along the way are worthwhile. Aside from the obvious benefit of potential monetary gain, there are certain life lessons that can only be taught through hardship and building something with your bare hands.

Find something you love and look for a way to monetize it.

 

Julia Lundstrom

About the author

Julia Lundstrom has been a Certified Financial Planner® since 2003, managing over $60 million of assets before selling her practice in 2009. Before that, she was an investment manager for a Silicon Valley venture fund. After 3 market crashes in her career, she is her to help guide you in the markets for The Traders Wire.

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