Trying to figure out where to invest $10,000 can be a bit overwhelming. Researching, exploring and weighing all of your options is really the first step towards wealth and financial freedom.

First, decide what you want. This will help you to best put your money to work for you. If you want freedom from payments and debt, then investing that money may not be the right answer for you at this stage of your life. A more appropriate use may be to use those funds to pay off debt. In the long run, this will save you money and allow you to invest more and thus, earn more interest from those investments. Delaying paying debt to invest will undoubtedly lose you money as interest charges nearly always exceed investment returns.

Next, before you decide what to invest in, make sure that you a contributing a maximum to your 401(k) or retirement account. If it is your goal to retire, this should be a priority. After you have paid your high interest debt and ensured you have maximized your retirement contributions, only then should you begin looking at outside investment options for the $10,000.

One option for growing your investment is to invest in an Individual Retirement Account (IRA) or a Keogh account. The IRA is tax- deductible and both will help you towards your retirement goals.

If your investment goal is somewhat shorter term than retirement and you may need to access the money before that time, invest in an aggressive growth mutual fund. Being a mutual fund, there is still a good deal of protection offered to your assets. Selecting an aggressive growth fund will allow you to maximize your profits will still enjoying the protection of this particular investment instrument.

Investing money in an aggressive growth mutual fund can be used to grow a person’s savings for a car, down payment on a home, or on a future investment. You can also choose to invest a portion of your $10,000 in the aggressive growth fund and park the other portion in another type of instrument with either more or less risk and/ or liquidity again, depending on your long and short-term goals.

If you want greater investment return than a savings account but want to be able to access the money if you need to do so, consider putting a portion of the investment in a money market account. These accounts generally yield greater interest than savings but you are not penalized for withdrawing the funds as you would be with an IRA or some mutual funds.

One strong word of advice on any earnings you gain as a result of your investment is to automatically reinvest these earnings. This will allow you to grow your investment exponentially by increasing the principle. You effectively have more money working for you to earn more money. Resist the urge to take these earnings and splurge. Reinvesting them will have much more of an impact and will be much more rewarding in the longer term.

Finally, it is important to make diverse investments. You can minimize your overall risk by putting your funds in a variety of investment vehicles. Mutual funds, by nature, also help to diversify your investment and minimize risk.

Treat your investment as a second income and a second job. Being diligent and serious about it will ensure good stewardship and will keep you constantly in touch with what’s going on with your money and allow you to make good decisions on how to manage it.