Where can you get 10% interest on your money?
It’s definitely possible, but not at your typical bank. To achieve these types of returns, you need to think more strategically… You have to adopt strategies with a long history of success that the crowd overlooks.
Yet, a mix of proven strategies and lesser-known opportunities can deliver. Special situations, those unique market moments, offer outsized gains for the bold, while reliable methods provide a steady foundation. Let’s dig in.
Where Can I Get 10% Interest on My Money? First, Reduce What You Owe
When most people ask how to achieve these types of returns, they almost always overlook the role of debt in their lives. You need to get your financial house in order before you even think about investments.
Reduce Debt for Guaranteed High Returns on Your Money
Start with the basics that consistently deliver. First, paying off high-interest debt is a no-brainer. If you’re carrying $5,000 on a credit card at 18%, you’re shelling out $900 a year in interest. Wipe that out, and you’ve locked in an 18% return—guaranteed.
It’s not sexy, but it beats any bank account. This is the simplest and most guaranteed path to double-digit gains.
Yes, Index Funds are Actually a Way to Achieve 10% Returns on Your Money
Next, consider stock market index funds. The S&P 500 has averaged 8-12% annually over decades. With patience, that 10% target is in sight. A $10,000 investment growing at 10% compounds to $25,937 in 10 years.
Returns are very lumpy, though. One year, the market could be up 30%, the next it could be down -15%. But, it is the simplest way to achieve great returns… so long as you are willing to stick to stay the course for decades.
Have You Considered Dividend Stocks to Nail 10% Returns on Your Money?
Third, dividend-paying stocks or ETFs bring steady income. Funds like the Global X S&P 500 Covered Call ETF (XYLD) yield 9.64% today. Reinvest those payouts, and you’re nudging past 10% over time. It’s a favorite in financial circles for balancing growth and cash flow.
And, while the market can go down, the dividends should keep rolling in. So, you can collect your cash while the market bobs up and down over the years.
These three—debt payoff, index funds, and dividends—set the stage, but special situations can push your returns higher.
Special Situations Strategies for 10%+ Returns
Now, let’s get adventurous. Special situations are one of the best sources of high-return investments, so long as you are willing to put in the work.
Investment giants such as Joel Greenblatt, Warren Buffett, the late Charlie Munger, and others have all capitalized on special situations from time to time. It’s a collection of strategies that is surprisingly lucrative.
Special Dividends Can Produce Great Returns on Your Investment
Take special dividends, for example. Special dividends are one-time cash bonanzas from companies flush with money. Take Costco’s $15-per-share payout in 2023—on a $600 stock, that’s a 2.5% boost in one shot. Pair it with regular dividends and growth, and annual returns can hit 10-20%.
The trick? Track firms with strong cash reserves signaling a payout. It’s like finding a golden egg in the market’s henhouse.
Merger Arbitrage Is Another High Return Strategy
Merger arbitrage offers another thrill. When a company announces a buyout, you buy the target’s stock and sometimes short the acquirer’s. If the deal closes, you might pocket 10-15% annualized returns in months. Picture a $50 stock bought at $48, jumping to $52 at closing—a quick 8% that scales up with time. Deals can flop, so spread your bets, but the payoff tempts many.
If you keep deploying your money into these events - and you avoid landmines - then you should be able to achieve returns higher than 10% over the course of the year.
Buybacks - A Simple Trick Management Uses to Increase Your Returns
Recapitalizations, especially management buybacks, signal confidence. When execs repurchase heaps of stock—think AutoZone’s $36 billion since 1998—it shrinks the share count, often boosting prices. A company buying back 10% of its stock yearly at undervalued rates can drive 15%+ gains as the market catches on. Dig for firms with consistent, hefty buyback plans; they’re betting on themselves.
The Spinoff Shuffle… Achieving 10%+ Returns One Piece at a Time
Spin-offs round out the list. When a company splits off a division—like PayPal from eBay—the new entity often flies under the radar. Investors dump it cheap, but as it proves itself, gains of 10-25% materialize. It’s a waiting game, but historical winners show the potential. These strategies thrive on corporate action, rewarding those who spot the moment.
Balancing Risk and Reward
It’s important to keep a couple of things in mind when you look for higher than usual returns. First, high returns aren’t free. Actually, they are pretty scarce and require skill and psychological discipline to capitalize on – otherwise, everyone would be achieving them!
Special dividends hinge on timing, for example. Miss the announcement, miss the cash. Merger arbitrage falters if deals collapse. Buybacks can stall if management overpays, and spin-offs need patience. Even index funds dip in bear markets.
To play it smart, mix safe bets like debt repayment with these gambles. Diversify—don’t bet the farm on one merger. Start small, maybe $500 on a spin-off, to learn the ropes. The beauty? Even conservative index funds can hit 10% over time, while special situations offer a shot at much more.
So, Where Can I Get 10% Interest on My Money?
From slashing debt to riding corporate shake-ups, 10%+ returns blend discipline and daring. Pay off that card, ride the S&P, or grab XYLD’s dividends for stability. Then, hunt special dividends, arbitrage mergers, back buybacks, or snag spin-offs for a boost.
Start simple—clear debt—or dive into a special dividend play. In a low-yield world, high returns aren’t luck; they’re strategy. Time to plan yours.
