first, based on wanting to keep some funds aside for emergency situations, etc and taking into account your monthly expenses are $500, you should put aside about $1,000 - $1,500 (i.e. 2-3 months worth of expenses) in cash or a money market account. that way you've got money set aside in case you lost your job, your car needed repairs, etc. a money-market account is essentially an interest-earning savings account that you can write checks from.
that leaves you with $6,500 - $7K to invest. first question is, do you have any debt? if you do, especially high-interest credit card debt, you should pay that off first before investing in long-term instruments. for these purposes, we'll assume you don't have any debt.
since you've stated your time horizon is 10-years, you shouldn't be afraid of the stock market. my advice is, invest in one or two mutual funds that have a long and solid track record. investing in individual stocks doesn't make a whole lot of sense unless your investment funds are in the six-figures + range. mutual funds give you the appreciation of the underlying stocks in the fund and provide you exposure to a much wider range of companies than what you'd be able to achieve by investing in individual company stocks on your own with limited funds. just do a little bit of homework on various mutual funds before you select.
you can either invest in index funds which are tied to certain stock indexes such as the S&P 500 or you can invest in funds managed by professionals and those professionals select the underlying stocks. if you choose the latter, make sure you look at a particular fund manager's history with the fund (i.e. if the fund itself has a strong 20-year track record but the manager has only been managing the fund for the past 3-years, you should discount the previous 17-years to some degree because that manager wasn't responsible for those 17-years of performance.)
you should split the money up across several funds if you want to give yourself diversity and asset allocation. you should definitely have money in a large company/ Blue Chip company GROWTH fund and a large company/ Blue Chip company VALUE fund. if you're willing to take on a little bit more risk, a mid- or small-cap fund. also you can get exposure to other countries' stock markets through an international fund. you can make initial investments in funds with as little as $1,000 and in some cases $500, or even $250. (you can also do a monthly investment that pulls from your checking and invest as little as $50-$100 per month.)
i suggest investing 60-100% of the money spread between a large-cap growth fund and a large cap value fund. if you choose to invest less than 100% in the large-cap funds, invest the remaining across 2 or 3 other funds that give you access to small- to mid-cap stocks and/or international stocks. the theory is that when the US market is down, other markets will be up... when large company stocks are down, small company stocks will be in favor, when growth is down, value will be in favor, etc. however this certainly does not always hold true.
i'd recommend you check out
Morningstar and research funds there.
p.s. with only $6 or $7K and no previous investment experience, STAY AWAY FROM DERIVATIVES!
