Picture this: you’ve just received or saved $20,000 but are unsure what to do with it. You could spend it on a luxurious vacation or a new car, or you could invest it wisely to set yourself up for financial stability in the future. So, let’s find out the best way to invest $20k!

In this article, we’ll discuss ideas for different investment strategies that suit varying financial goals, investment time horizons, and risk tolerance levels.

You will better understand the various investment options available when you’re trying to figure out what to do with 20k. And you’ll also discover their benefits, risks, and how to approach the decision-making process.

​​So, without further ado, let’s explore what to do with $20k!

Short-term strategies to invest $20k

Short-term investment strategies are designed for those who are looking to invest for a period of up to two years.

They are a great option if you want to save for a specific goal.

For example, if you’re saving for a house down payment, a wedding, or a vacation.

Short-term investment strategies are also great for building your emergency fund—as long as they aren’t too risky.

Common examples of short-term investments include:

• High-yield saving accounts
• Money market funds
• Peer-to-peer lending

High-yield savings accounts

If you’re looking for a safe and straightforward way to invest $20k, a high-yield savings account may be the way to go.

A high-yield savings account is like a regular one.

However, it has a higher interest rate, allowing you to earn more money over time.

But unlike other investment options, there is no risk of losing money due to market fluctuations.

However, you should make sure your high-yield savings accounts are FDIC-insured. The federal government will protect your cash up to $250,000 for each depositor, per ownership category per insured bank.

This is why high-yield savings accounts are a popular choice regarding short-term investment strategies. I personally keep some of my short term savings in this account type.

They are a low-risk, low-stress way to earn interest on your money without tying it up for an extended period.

Money market funds

Regarding short-term investments, money market funds are an attractive option for those who want to earn a higher return on their money than they could with a traditional savings account.

A money market fund is a sort of mutual fund that invests in short-term and low-risk securities. It could include assets like government bonds, certificates of deposit, and commercial paper.

Another advantage of money market funds is that you can usually access your funds quickly and easily. However, this usually isn’t the case for longer-term investment strategies.

So, if you’re looking for a low-risk, low-volatility investment that offers a stable return, a money market fund may be the best way to invest 20k to meet your financial goals.

Peer-to-peer lending

When it comes to short-term investment strategies, peer-to-peer (P2P) lending is an innovative option. It offers a unique combination of high returns and low risk.

P2P lending connects borrowers directly to investors without an intermediary financial institution.

In other words, YOU become the “bank.”

By cutting out the middleman, P2P lending allows investors to earn higher returns than they would with traditional savings accounts.

Plus, you choose who you invest with, making it easier to put your money where your values are. That said, it is still very important to do your research when it comes to P2P lending platforms to determine if this is the best way to invest 20k for you.

Mid-term investment strategies to invest $20k

Mid-term goals and investment strategies are suitable for those looking for the best way to invest $20k for two to five years.

It’s a good strategy for saving for a child’s education or starting a business.

Common examples of mid-term investments include:

• CDs
• Robo-advisors
• Index funds
• Mutual funds
• Exchange-traded funds
• REITs

CDs (Certificates of Deposit)

CDs, or Certificates of Deposits, offer a safe, low-risk investment option with a guaranteed return for your mid-term financial goals.

A CD is a deposit account that typically offers a set interest rate for a specific term, such as six months, one year, or two years.

As with high-yield savings accounts, one of the primary advantages of CDs is that they are FDIC-insured.

CDs also offer higher interest rates than you’d find with traditional savings accounts. It makes them a good option for those looking to earn more money on their investment.

The bank also guarantees interest earned, regardless of inflation volatility.

Which is good for those looking for a guaranteed investment return over a specific period. You can also check out other ideas for the best compound interest investments.

Robo-advisors

With user-friendly platforms, diversified investment portfolios, and 24/7 access to your investments, robo-advisors provide a convenient and cost-effective way to grow a $20k investment.

Unlike traditional brokerages, a robo-advisor is a digital investing option that provides automated investment management services.

It uses complex algorithms to create and manage a personalized investment portfolio based on your short and long term financial goals, risk tolerance, and investment timeline.

Plus, because robo-advisors eliminate the need for a traditional financial advisor (who will typically charge high fees for their services), you can access professional investment management services at a fraction of the cost.

As an added perk, robo-advisors are designed to make a well-balanced portfolio of investments across different asset classes, which can help mitigate risks and increase returns.

Index funds

With diverse investment options and high transparency, index funds are a reliable and proven way to invest $20k for mid-term purposes.

The best index funds are an aggregation of stocks, bonds, and other securities. They track an index, depending on the index fund, such as the S&P 500 index.

When investing in index funds, you can access various investment options. It can help you spread your investment risk and maximize returns.

Plus, because they’re passively managed, index funds are known to have significantly lower fees than mutual funds. Still, index funds can offer very strong investment returns over time.

Moreover, the prevalence of index funds is high. Whether you’re looking for a conservative, low-risk investment option or a more aggressive investment strategy, there’s likely a fund out there that meets your needs and can be the best way to invest 20k.

Mutual funds

Unlike index funds, which are passively managed, most mutual funds are actively managed by a dedicated mutual fund manager.

If you learn how to start investing with mutual funds, your cash will be pooled with other investors’ money and then invested in different assets, like stocks and bonds. To get started, you’ll need to check out brokerage accounts and open one.

Mutual funds are one option for figuring out what to do with 20k if you want to work with a mutual fund manager. But bear in mind that mutual funds come with much higher fees than index funds or ETFs. In the end, these fees can cut into your returns over time.

Exchange Traded Funds (ETFs)

With their low fees, flexibility, ease of access, transparency, and potential for long-term capital appreciation, ETFs can provide a reliable investment strategy that aligns with your financial goals.

In some ways, ETFs are similar to mutual funds. ETFs and mutual funds are a collection of securities that can provide diversification and risk management benefits.

However, ETFs trade on an exchange like a stock, allowing you to buy and sell them throughout the trading day at market prices.

Compared to actively managed mutual funds (which require professional management and research), ETFs are typically passively managed. As a result, their management fees are much lower, allowing you to keep more of your returns.

Moreover, investing in a diversified portfolio of ETFs can minimize the risks associated with individual securities and market volatility, thus potentially achieving steady returns over the long term.

REITs (Real estate investment trusts)

If you want to invest $20k for mid-term purposes that provides regular income and capital appreciation (and is great for real estate beginners), investing in real estate investment trusts (REITs) could be a great option.

REITs own, operate, and/or finance income-producing real estate, such as shopping centers, office buildings, apartments, and hotels.

By investing in REITs, you can gain exposure to the real estate market without the hassle of buying and managing physical properties.

Importantly, when you invest in REITs, you also get to invest in various property types and geographic regions, allowing you to diversify your portfolio and minimize risk.

Best of all, REITs are required by law to give at least 90% of their taxable income to their shareholders as dividends, providing investors with a reliable source of income. So, if you’re looking to build a passive income stream, REITs might be the best way to invest 20k to meet your financial goals.

You can buy REIT ETFs directly in a brokerage account or use tools like Fundrise, an online investment platform designed to help individuals invest in real estate and venture capital without big fees.

Long-term strategies to invest $20k

Long-term investment strategies are the best way to invest $20k for five years or more. They are a great option if you’re looking to build long-term wealth, such as saving for retirement. The new contribution limits for 2024 for IRAs and 401ks are listed here, according to the IRS.

Common examples of long-term investments include:

• Retirement accounts
• Real estate

Traditional IRA

A traditional IRA allows individuals to contribute pre-tax dollars, which can lower their taxable income for that year.

Then, the money grows tax-deferred until withdrawal in retirement, when it is taxed at the individual’s tax rate. It can be advantageous because you’re more likely to be in a lower tax bracket when you’re a retiree than when you’re a working professional.

Roth IRA

Roth IRAs allow individuals to contribute after-tax dollars, meaning there is no contribution tax deduction.

However, the investment earnings grow tax-free, and withdrawals in retirement are also tax-free.

401(k) retirement account

This is an employer-sponsored retirement account where employees can add a portion of their pre-tax income.

Some employers may match a portion of their contributions with 401k matching. The money grows tax-deferred until withdrawal in retirement, where it is taxed as ordinary income.

Other types of retirement accounts include:

• Savings Incentive Match Plan for Employees (SIMPLE) IRA plans
• Simplified Employee Pension (SEP) plans
• Solo 401(k)s

Investing in retirement accounts is a wise choice for long-term financial planning.

Retirement accounts offer tax benefits, the power of compounding interest, a range of investment options, and the opportunity to plan for your future.

In addition, by learning how to start saving for retirement, individuals can build a comfortable nest egg that will last for decades, ensuring a financially secure retirement.

Real estate

Real estate offers the potential for appreciation in value, real estate passive income, a range of investment strategies, a hedge against inflation, and greater control over your investment.

It’s a tangible asset that has the potential to appreciate over time. Investing in a property allows you to watch your investment grow as the property increases in value.

Treating your real estate as a rental property could earn steady ongoing passive income. Alternatively, you could venture into flipping properties for a quick profit.

Another real estate investment strategy is to buy a home and hold it as an asset until the appreciation in value allows you to invest in a higher-value property. It can be a viable strategy since inflation drives up not only the cost of goods and services but also the value of real estate.

Other ideas to invest 20k? Think outside the box!

Hoping to get more creative with finding the best way to invest $20k?  If so, paying off debt or investing in education may be your route.

Let’s explore these ideas a little further.

Pay off credit card debt

When you carry debt, you’re essentially paying someone else for the privilege of borrowing their money. Unfortunately, that interest can really add up over time.

So, by using $20,000 to stop paying credit card debt, you can save yourself a significant amount of money in interest payments over the long run.

Paying off your debt can also improve your credit score, positively impacting your financial life.

With a higher credit score, you may qualify for lower interest rates on future loans, credit cards, and mortgages, saving you even more money in the long term.

And we’d be remiss if we didn’t note that paying off debt is the gift that keeps giving.

Why? When you pay off debt, you free up your cash, giving you more money to put towards other financial goals, such as investing, saving, or even treating yourself to something special.

Make student loan payments

Figuring out how student loans work is complicated. With interest adding up over the years, you often have to pay back a lot more than you originally realized.

If you have a lot of money due in student loans, this could be a great way to use that extra $20k!

Whether the $20k is enough to cover all or just part of your student loans, getting rid of or minimizing your monthly student loan payment will make managing your biweekly budget or monthly budget that much easier.

Invest in your education

With $20,000, you can pursue additional education, such as a college degree, trade school, or other specialized training.

Education can open up new doors and opportunities for your career and increase your earning potential over the long run. So, if you’re thinking about what to do with $20k, investing in your education today could mean limitless returns tomorrow.

Investing in education can also positively impact your personal growth and development. It can expand your horizons, challenge you to think differently and expose you to new ideas and perspectives. Ultimately, education can help you become a more well-rounded and fulfilled individual—professionally and personally.

Save for your kid’s education

If you have children, another great way to plan for the future is to start saving for your kids’ college education. Even if your children are still young, the earlier you start, the better!

One way to invest $20k for your kid’s college education is with a 529 plan. This special education savings plan offers certain tax advantages to help you save for qualified education expenses.

But be aware that you can only use the funds from a 529 plan for qualified education payments.

So before getting started, make sure you do your research to determine if a 529 plan is worth it for you and your family.

4 Key things to remember

Before jumping into the first strategy that catches your attention, I encourage you to reflect on your goals and personal circumstances.

It will help you find a strategy to start investing that aligns with your long-term objectives in life, minimizes risk, and maximizes returns.

To set the stage for picking an investment strategy, consider the following:

1. Set financial goals

What do you want to achieve with this money?

For example, some financial goals could be to save for retirement, buy a home, pay off debt, or invest for the future.

Once you have set your financial goals, you can explore the best investment options to help you achieve them.

2. Outline a time horizon

How long do you plan to hold onto your investment?

Is it a short-term savings goal (such as saving for a house) or a long-term goal (such as building a retirement nest egg)?

Your investment time horizon will influence the types of investments you choose.

3. Understand your risk tolerance

How much risk are you comfortable taking to earn higher returns?

Are you okay with the ups and downs of the stock market, or do you prefer more conservative investments with lower risk?

Understanding how risk averse you are and your risk tolerance can help you choose the right investment strategy for your needs.

4. Diversify your investments

Even if you think you’ve found the best way to invest $20k, you don’t want to put all your eggs in one basket!

Instead, consider diversifying your investments across various asset classes, such as stocks, bonds, real estate, and commodities.

It can help reduce your overall risk and potentially increase your returns over the long run.

Don’t forget to do your research

Once you determine a strategy that aligns with your answers to the questions above, you can research the options available within the specific investment strategy of your choosing. For more help, check out our list of the best investment websites you can leverage.

Here are some key questions to consider when researching potential investments:

What are the tax implications?

For example, take the time to consider: Will you be subject to capital gains taxes or other taxes on your investment returns?

Understanding the tax implications of your investment can help you make smarter decisions and maximize your after-tax returns.

How has the investment performed historically?

Now, it’s time to do a little research. Look at how the investment has performed over time. How does it compare to similar investments?

While historical performance is never guaranteed, it can be a valuable indicator of future potential returns.

How is the investment managed?

Who manages the investment? Importantly, what is their track record?

Do they have a clear investment strategy? Are they aligned with your financial goals?

Before deciding what to do with 20k, ensure you know what type of management your investment will have and who will manage it.

What are the company’s corporate values and social impact?

Does the company behind the investment clearly commit to social responsibility and sustainability? Do their values align with your own? Do they positively impact society and the environment?

Choosing investments supporting your values will help you protect your peace of mind and improve the world.

Are there investment fees?

What are the fees associated with the investment? How do they compare to similar investments?

Remember that high fees can reduce your overall profitability.

What do market trends and indicators look like?

What is the current state of the market?

In other words, understand the difference between a bear and bull market.

How does this impact the investment you’re considering? Are there any potential risks or opportunities you should be aware of?

As always, research all potential risks before you decide how to invest $20k.

Expert tip: Starting a business is a great way to invest 20k

If you’re trying to figure out what to do with 20k to make it grow, you could also consider using this money to start a business or a side hustle. If you’re not sure where to get started, there are a lot of different ideas for side hustles out there.

You can earn money blogging, or become a graphic designer. Maybe you’ll start a cleaning business or consider learning about freelance marketing.
While you may not want to pour ALL of your saved-up $20k into starting a side hustle or business, you may choose to use a portion of it.

For example, you can use part of your savings to pay for equipment or take courses on how to launch your business. If you’re looking for new income stream ideas, starting a business or even a side hustle could prove profitable in the long run.

What can I do with 20k to make more money?

If you want to use your 20k to start making even more money, one of the best things you can do is build passive income streams.

For example, you may try starting a side hustle, launch a business that can eventually run with minimal input from you, and/or invest in real estate, stocks, bonds, or other assets.

Is $20,000 a good amount to invest?

$20,000 is a great amount to get started investing! If you want to keep things simple, consider investing your $20k in a 3 fund portfolio, AKA the lazy portfolio. That said, you can learn how to start investing with just a little money.

What is the best thing to invest $20,000 in long term?

There is no single best investment for the long term. Rather, the best investment for your $20k will vary depending on your own financial goals and risk tolerance.

One popular option for many people is investing in real estate, dividend stocks, and/or bonds with a brokerage account.

What is the best way to invest 20k short term?

If you want to be able to easily access your investment in the short term (i.e., in less than five years), then you’ll want to consider highly liquid investments, such as high-yield savings accounts, CDs, ETFs, or money market funds, etc.

Above all, you’ll want to avoid non-liquid (or illiquid) assets, like estates, collectibles, or other intangible assets.

Articles related to investing

If you gained valuable investing knowledge from this article, check out these posts next!

• Should You Pay Off Student Loans Or Invest?
• The Difference Between Savings And Investment: Does It Matter?
• How To Grow Your Money: 7 “Must Do” Tips
• How To Start: Passive Real Estate Investing

The best way to invest $20k depends on you!

Investing $20,000 can be a smart way to set yourself up for financial stability in the future.

By taking the time to carefully consider your financial goals, investment time horizon, and risk-tolerance level, you can choose the investment strategy that suits you best—and it won’t be the same for everyone.

Whether you opt for stocks, bonds, real estate, or other investment vehicles, it’s essential to research, stay informed, and make thoughtful decisions that align with your personal core values and goals.

So, use the knowledge and tools you have learned here to make informed decisions about the best way to invest $20k. Above all, don’t forget: Starting early and staying committed to your goals is the key to wealth accumulation.

The post The Best Way To Invest $20k appeared first on Clever Girl Finance.

Whether you’ve recently gotten lucky or scrimped and saved for a few years, knowing what to do with 50k is essential. Having money in the bank is a unique opportunity. It means you can grow it and have an even larger safety net.

So, how can you get started, and what are the smartest options? Allow us to take you through what to do with 50k in savings!

How much is $50k and how can you get it?

You may have a significant payout from a previous job or even receive an inheritance from a loved one.

In addition, when you start to cut back, use effective money-saving tips, and use high-interest accounts, you may find that the cents start to turn into dollars fast and you find that you are able to save 50k.

At first glance, $50,000 may sound like a huge chunk of money. If you’re working a minimum-wage job or don’t have a gigantic salary, you could feel it’s out of reach. Or it could be that you are wondering how much 50k a year breaks down to in hours.

What ever your thought process is, the truth is that saving $50,000 is viable for many of us. At the very least, it’s a good goal to have.

And no matter how you have come to have $50,000 in your bank, you need to know how to use it.

What to do with $50k before you invest it!

If you’re lucky enough to have 50k in cash, the obvious move is to invest it.

However, before you look into your options for what to do with the money, getting yourself into a solid financial position is the first step. With that in mind, here are a couple of the admin tasks you should take care of first:

Pay off your debts

It’s much easier to land yourself in debt than it is to get out of it. If you owe money, now is the time to settle things once and for all.

That means learning how to pay off credit card debt fast or repaying outstanding loans.

If you haven’t already got a debt reduction plan, now is a good time to start.

For example, one of the popular strategies that I prefer for paying off debt is to start by paying off high-interest debt, like credit cards.

Sometimes, I can wipe out the debt completely with one large payment. Remember, you need to check the small print of any loans you have taken out.

Paying off debts is rarely a fast process. However, armed with the 50k in cash, you are in a better position than most people.

Figure out a payment plan that works for you—and your other investment plans—and take things from there.

Create an emergency fund

Unless you have a crystal ball, chances are, you can’t see into the future. Since you don’t know what will happen in the months or years to come, you need an emergency fund.

Putting cash aside in case you ever need it will give you a sense of security. Having this pot in place can help you should you face sudden costs, such as:

• Car breaking down
• Losing your job or income
• Facing costly problems in my home
• Needing to travel on short notice

Ensuring the fund is ready and waiting for you will give you the peace of mind you need. When the unexpected happens, you will be in the best position to deal with it.

18 Smart ways to grow $50k in cash

When it comes to what to do with $50k in savings, the important thing is not to let it go to waste. That said, if you are wondering how you can make your money work for you, below are some ideas to get you started. You can also find a wealth of tips in the Clever Girl Finance book, Learn How Investing Works, Grow Your Money!

1. Invest in index funds

If you want to build a successful financial future, you may want to make investing with index funds a part of your long-term strategy.

Index funds are types of stock market investments that follow and track stock market indexes, like the S&P 500, and are typically low cost.

For example, if you invest in an index that tracks the S&P 500, you will be invested in the 500 companies that make up the S&P 500.

When you buy into an index fund, you are essentially investing in every single stock within that fund—without buying individual stocks. It doesn’t end there.

You could also invest in a total market index fund, which splits your money equally across the entire stock market.

The great news about index funds is that because they are not actively managed like mutual funds, the expenses ratios are much lowers which means more of your money can grow!

2. Buy a rental property

$50,000 makes a nice down payment if you want to invest in the property market. One of the most effective ways to capitalize on the market is buying a house to rent out.

While there are additional costs associated with this investment, it could make you a good income.

Before you get started with this venture, consider the logistics of it.

Will you use a management agency to let the property out for you? How “hands-on” do you expect to be? What extra money will you need to maintain the property to a high standard?

If you can answer these questions, you may be in a good position to invest in a rental home.

3. Start a business

Did you know that you could start a business with $50K? If you’ve been thinking about starting a side hustle or business, you can use this money to get things off the ground.

A massive 99.9% of US businesses are small businesses. Read our guide on how to start a business from scratch before you begin planning out your next business venture.

Of course, there’s a whole world of business opportunities out there. You may want to start a business with 50k by setting up a hospitality venture, such as a cafe or a bar.

On the other hand, there’s always the option to start an online store selling bespoke products to a broader audience.

Consider your personal interests and how you can translate them into a startup business.

4. Flip a house

House flipping means buying an old property that desperately needs work, making it over, and then selling it for a profit. Average gross profits on home flips can be quite good.

If I was considering whether this option works for me, I would need to consider how much the renovations will cost, any tradesmen fees, and the price of the property. I will also need a surveyor to take a look at the property before I go ahead and buy it.

I believe that understanding the extent of the work that needs to be done is essential to the investment. 

5. Invest in saving bonds

Next, let’s talk about a traditional way to boost your capital: saving bonds. When you’re deciding what to do with 50K, this is one of the most straightforward options.

Put simply, you buy a bond at face value, wait for it to mature, and then reap the rewards.

If you’re unsure where to start when it comes to investing your money, a saving bond is an ideal option. These are low-risk investments, which means that you aren’t going to lose all of your $50,000 in one unfortunate move. You can rest assured that won’t happen.

One of the biggest advantages of saving bonds is that they are backed by the full faith credit of the American government.

In layperson’s terms, you are not loaning money to a commercial entity but to the government. For that reason, these bonds are considered some of the safest investments for your money. Also, check out more of the best compound interest investments.

6. Boost your retirement savings

Now that you have excess money in the bank, it may be a smart time to increase your retirement savings.

Unfortunately, the truth is that many people out there lack a proper plan. One in four Americans don’t have any retirement savings whatsoever, explains Yahoo Money. If you fall into that category, now is an ideal opportunity to rectify things by creating a sustainable savings strategy.

How many IRAs can you have in your retirement strategy? Believe it or not, you can have more than one, like a Roth IRA or a traditional IRA. Both of these accounts offer tax advantages to help you grow your money over time so you can best protect yourself in retirement.

Take the time to learn the difference between the different types of retirement accounts. Then, look up your contribution limits. Check the yearly allowance for IRA contributions guidelines before you start topping it up.

Other more unique ways to grow $50k in cash!

While real estate, bonds, and retirement investing are all good options for your $50k, there are other ways to use the money. Here are a few ideas:

7. Buy artwork that appreciates

Are you a creative person or just someone who appreciates art? If the answer is yes, you can use your 50k to invest in some masterpieces.

There are many ways to invest in this sector. You can check out the U.S. News guide to buying art as a first port of call.

Consider whether you want to invest in individual pieces, look into fractional share agreements, or even throw your money into an art fund. The more research you do about the art world, the better position you will be in when buying some.

8. Invest in a startup

A startup is a new business that often needs investors to help it grow. You can be part of this!

It can be somewhat risky, but you can increase your chances of success by researching and understanding the startup before investing money.

You can be paid in a few ways, including shares and interest.

Help crowdfund a startup by checking out sites like Wefunder or StartEngine.

9. Invest in farmland

Owning farmland can be a lucrative investment, and it’s one of my favorite investing ideas. You can make money from rent as well as appreciation.

In addition to simply purchasing farmland, you may also choose REITs or crowdfunding to start your investing.

10. Consider cryptocurrency

Cryptocurrency is an alternative method of making money, but it can be profitable.

However, investing in cryptocurrency is not without risk and should be considered carefully.

Cryptocurrency is a new type of digital currency that you can buy. It may not immediately yield a profit, but it may benefit you in the long term. If the prices of crypto increase, you can sell what you own for a profit.

There are a variety of cryptocurrency options. Check out Coinbase to purchase this currency. Popular currency options include Bitcoin, Ethereum and Litecoin.

11. Invest for your children’s education

A great way to invest your money is to start saving for your children’s future with college savings plans.

A college 529b plan is one option for storing money for college because it lets you withdraw the earnings tax-free if they’re used for qualified education purposes.

You might also consider investing in another way, such as opening custodial accounts or even a regular investing option like index funds that you can use later for their education.

12. Buy ETFs

While they seem similar, there is actually a difference between index funds and ETFs, that has to do with the time that they are traded. Exchange-traded funds (ETFs) are an aggregation of stocks, bonds, and other securities.

For this reason, investing in ETFs makes it easier to create a portfolio with diversification than investing in individual stocks.

Another main benefit of ETFs is their very low minimum requirements to get started. It makes them a great option for beginner investors wondering what to do with 50k.

13. Consider real estate investments

Don’t want to buy a house? No problem—you can still try real estate investing for beginners via a real estate investment trust (REIT).

REITs own and/or operate properties like hospitals, warehouses, shopping centers, etc. REITs are publicly traded on stock exchanges, so they’re a great way to get into real estate investing without having to plunk down a down payment on a house—and then maintain that house.

14. Buy certificates of deposit

What is a Certificate of Deposit? Certificates of Deposit (CDs) are savings accounts offered by banks or credit unions.

Basically, you agree to keep your money in that financial institution for a specific amount of time—and they reward you with an agreed-upon APY (annual percentage yield). 

CDs can be a solid portion of your investment portfolio especially for short term savings. But there are both advantages and disadvantages of CDs to consider before investing.

For instance, an advantage is you are guaranteed a specific interest rate and your money is FDIC insured. up to $250,000 A disadvantage if that if you withdraw the funds before the time elapses you may be charged a fee.

15. Open a money market account

There are many different types of bank accounts. To safeguard and grow your $50k, you can also consider opening a money market account.

A money market account offers higher interest rates than a typical savings account.

However, like a checking account, it allows you to write checks.

16. Put money in a high-yield savings account

Investing in the stock market is a great way to help your assets grow. But when figuring out what to do with $50k, don’t forget to maintain an emergency fund!

My idea of a great place to store my emergency fund is in high-yield savings accounts, which offer higher interest rates than typical savings accounts. I’ve found that these account types are also FDIC insured up to $250,000.

17. Invest in dividend stocks

Basically, a dividend stock is any stock that pays out dividends to its shareholders.

Investing in dividend stocks gives you two opportunities to grow your $50k. First, dividend stocks give you the chance to earn income through dividends.

Secondly, dividend stocks can also help you build your overall net worth over time if the stock’s value increases.

18. Contribute to an HSA

An HSA is also know as a Health Savings Account. Importantly, it is a great way to help save for future medical expenses. 

With an HSA, you can both contribute and let your money grow tax-free until you withdraw it to pay for qualified medical expenses.

Pretty much everyone can benefit from an HSA, so if you’re wondering what to do with 50k, it’s well worth learning more about how a health savings account works!  

Expert tip: Diversify your $50k to avoid volatility

One of the best investing tips is to diversify your portfolio. In other words, don’t put all your money in the same place. So if you’re trying to decide what to do with 50k, consider coming up with a few options, instead of just one.

For example, you can keep some money in a high-yield savings account as your emergency fund, invest some money in REITs, and use the rest to buy ETFs.

3 Mistakes to avoid with 50k in cash

If it’s the first time you’ve had this much money or wondered what to do with 50k in savings, you may be excited and want to start using it.

That is completely natural, but you need to slow down. Here are some critical mistakes to avoid:

1. Failing to invest

Having your entire $50,000 sitting in your bank account won’t do you any favors. While it may seem like the obvious move when you don’t know where to start, you are wasting an opportunity here.

You need to be sure that you are making a reasonable return on this money by learning to invest smart. Take a look at our list of ideas or seek independent advice on the issue.

2. Splurging it all on vacations

Fancy heading off to Barbados? What about jet-setting to Dubai? I love vacations, so this is a splurge I have to be aware of!

While we all deserve a treat now and then, spending all your money on a luxury vacation is a mistake. When it’s over, your bank account will be empty, and you won’t have anything to show for it.

That doesn’t mean you have to invest all your money. Splurging a little on yourself can help you get it out of your system.

If there is something that you have always wanted, see if you can afford it. Set aside some cash for vacations and extravagances.

But just because you have $50k doesn’t mean you have to increase your expenses. Instead, remind yourself to avoid lifestyle inflation.

3. Giving the money away recklessly

Be sure to keep your 50K in cash safe! Whether you fall foul to an online scam or are pressured to give your money away to someone you know, there’s no doubt that you will regret doing so.

It’s a sad fact, but when people know you have money, they may try to extract it from you.

While there’s nothing wrong with helping out someone who is genuinely in need—such as a close friend or family member—be aware that people may try to take advantage of you.

Ensure you are practicing how to be smart about money and doing things for the right reason—not because you feel you have no other choice.

How much interest will $50,000 earn in a year?

The amount of interest you can earn on $50,000 in a year depends on what the annual interest rate is. For example, if your annual interest rate is 4%, you could earn $2,000 in interest on $50,000 in a year.

Keep in mind that this number can vary depending on where you invest your money.

Is $50k a lot of savings?

$50k is a lot of savings and definitely an important milestone to celebrate. However, 50k will not be enough to sustain you in retirement, so it’s important to find ways to invest and continue to grow that 50k. 

What is the best investment for $50k?

There is no one best investment for $50k for everyone. But there is one golden rule regarding investing: diversify, diversify, diversify!

So when researching the best investment for 50k, remember to consider a breadth of options, like ETFs, REITs, dividend stocks, etc.

Is $50k too much in savings?

Deciding whether $50k in savings is too much depends on your lifestyle. Generally, it’s recommended to have an emergency fund that equals 3 to 6 months of living expenses. For some people, this may be 50k.

That said, if your living expenses are relatively low, I think $50k may exceed your emergency fund needs. In my opinion, that makes it a good idea to invest at least some of that 50k. 

Articles related to what to do with 50k

If you found this article on what to do with $50 helpful, check out this related content:

• $50k A Year Is How Much An Hour?
• How To Be Smart About Money: 5 Ways
• Do You Have To Spend Money To Make Money?
• How to Grow Your Money: 7 “Must Do” Tips
• Best Compound Interest Investments

You can create great opportunities by being smart with your $50k!

Knowing what to do with 50k doesn’t have to be challenging. The truth is that this is an opportunity, and you can easily grow your money. You might choose to start a business with 50k, invest, or do something else.

In this guide, we’ve covered some of the most effective strategies you can use to make a good return on the lump sum of money.

Use it as inspiration when deciding what to do with your newfound wealth. You might also want to consider, “Do I need a financial advisor?”, think about using robo-advisors, or get independent advice on what the next steps could be for your savings.

The post What To Do With $50K: 18 Smart Ideas To Grow Your Money appeared first on Clever Girl Finance.

Whether you received a large bonus at work or a windfall from a family member, you’re probably not complaining if you suddenly have an extra $100k. But while the extra wealth might be helpful to your financial situation, you likely still have a lot of questions and may be wondering how to invest $100k. There are lots of options, depending on what you value and your finances.

There are many ways to invest $100,000, from real estate to starting your own business. Keep reading to learn how to invest 100k and what you can do to help your money grow even more over time.

What to do with $100k: 4 Investment ideas

Tempting as it may be to spend your 100k on a lavish vacation or a new luxury car, the more practical idea is to put your money to work for you.

Investing your money can help it continue to grow over time, ultimately giving you even more wealth than before. This can be a big benefit in your lifetime, but it also helps build generational wealth for your descendants.

Let’s take a look at four investment ideas for your $100,000:

• Retirement accounts
• Real estate
• Brokerage accounts
• Savings accounts

1. How to invest $100k for retirement

Approximately 62% of Americans between the ages of 18 and 29 have a retirement account, according to The Motley Fool. However, they also state that only 30% of them feel prepared for retirement.

If you have a retirement account, adding 100k could be a big step in funding your retirement income. If you don’t already have a retirement account, your $100,000 is a great way to get started with a leg up toward retirement savings.

But adding money to your retirement account isn’t just about increasing your income in retirement — it’s also a good way to potentially save on taxes. Your windfall may come with a hefty tax bill, depending on how you got the money. By investing your 100k into retirement savings, you may be able to save on taxes.

For example, you exceeded all of your sales goals this year and earned a 100k bonus. You might be able to save on next year’s income taxes by maxing out your 401k. If you’re wondering, “Should I max out my 401k?” it reduces your taxable income, which in turn lowers your tax bill.

It’s important to note that you probably won’t be able to invest your full 100k into retirement savings alone.

Retirement accounts generally have contribution limits. Contributions to a 401k account are limited to $23,000 in 2024, according to the IRS, for example.

Contribution limits might mean you have to invest part of your 100k elsewhere, but investing in retirement is still a great place to start.

Common retirement accounts

There are three common types of retirement plans: 401k, individual retirement accounts, and defined benefit plans.

A 401k is an employer-sponsored plan that lets you contribute part of your paycheck directly to the plan. The plan is managed by your employer, which can limit your investment and management options and lead to higher fees than other types of accounts.

Individual retirement accounts (IRAs) are owned by individuals, meaning you have full control over your account. Your employer is not connected to your IRA, and you can choose almost any type of investment you like (depending on where you open your account). Fees on IRAs tend to be lower than other account types because you can choose low-fee or no-fee investments.

However, contribution limits are lower, which makes it difficult to quickly build wealth through contributions.

Finally, a defined benefit plan — most often called a pension — is an employer-sponsored plan that makes regular payments to retired employees.

The plan is owned by the employer, who uses their own formula to determine retirement payments. The formula generally takes into account the employee’s time with the company and salary.

Defined benefit plans are most often funded by the employer, but the rise in the popularity of the 401k means fewer companies are offering pensions than in the past.

2. Investing $100k in real estate

When it comes to investing 100k, real estate investing might be at the top of your list. One of the biggest barriers to entry to making money in real estate is the initial investment. Buying a house to rent out, for example, could take some serious upfront capital.

That’s why finding yourself with 100k could be a great time to start real estate investing. Real estate uses real property — from single-family homes to commercial buildings — to generate income, usually through rental or lease payments.

Depending on how you invest your money, passive real estate investing can even be a passive income stream that doesn’t require hands-on management. After all, who wants to get maintenance calls from tenants in the middle of the night?

Real estate investing for beginners, however, might be overwhelming. Luckily, you don’t have to go out and buy a four-plex building to start investing.

There are several ways to get started in real estate without buying a property on your own, including real estate investment trusts or REITs.

Direct real estate vs. REITs

Buying a house, apartment complex, or commercial building to rent for income is often referred to as direct real estate investing or investing in real property. There are a lot of upfront and recurring costs to this method.

For one, you’ll have to purchase the property and make any necessary repairs or renovations. Even after renting the property, you’ll need cash to cover maintenance, taxes, insurance, and other ongoing costs. And, of course, the property could potentially lose value over time.

The biggest benefit to direct investing, however, is the chance for higher payouts. By owning the building outright, you don’t have to share profits. You might also be able to make money quickly by flipping properties.

That being said, owning real property — even with a property management company — can be a big hassle. A real estate investment trust, which you may also know as a REIT, is a company that owns real property, like a hotel or office building, and provides a real estate investment option for people who don’t want to own their own properties outright.

REITs offer ownership shares of their portfolio of real estate to investors, much like a company stock. As an investor, you purchase shares in the REIT and receive dividends from the company’s profits. You can also sell your shares to make a profit if the price goes up, just like a stock.

Investing in REITs lets you get into real estate investing without the high startup cost. They also give you an easy way to diversify your investment portfolio.

However, you won’t have control of the properties the REIT company owns or the price of rent. The lack of direct involvement in REITs might make it feel more like stock investing than real estate investing.

3. How to invest $100k in a brokerage account

If you’re wondering what you should do with 100k, a brokerage account will likely be part of your investment plan.

A brokerage account is an investment account which lets you buy and sell stock market assets like stocks, bonds, and funds. Unlike retirement accounts, brokerage accounts have no contribution limits.

However, brokerage accounts also don’t typically have tax advantages like retirement accounts.

The good news is that investing in a brokerage account is one of the simplest ways to build wealth. Even better, the money you earn isn’t tied to retirement, so you can access your money without penalties at any age.

As you grow your investment portfolio, you’ll begin to earn portfolio income from dividends and interest.

In most cases, brokerage investing is a fairly hands-off method of investing. This is especially true if you hire a financial advisor or use a robo-advisor to automate your investment decisions.

Figuring out how to invest 100k in a brokerage account comes down to personal preference. You’ll want to consider your risk tolerance and how you want to make money (dividends vs. buying and selling shares) when choosing investments.

Typically, there are five types of investment vehicles in a brokerage account:

• Stocks
• Bonds
• Mutual funds
• Index funds
• Exchange-traded funds

Stocks

Stocks are pieces of ownership of a specific company. Each piece of ownership is called a share. You can buy and sell shares to make money, typically by buying at a low price and selling your shares at a higher one.

Investing in stocks may allow you to earn big profits, but you have to pick the right ones. A person who invested in Google, Apple, or Amazon when the stocks first became available likely made a large profit from selling the shares within the last few years.

However, there’s no proven way to pick a stock that will make it big. You might also choose a stock of a company that goes out of business, leaving your investment nearly worthless. This chance of loss is why stocks are considered the riskiest type of investment. But you can learn how to research stocks to improve your chances of success.

Bonds

A bond is a loan you make to an organization, often a government entity. The bond issuer, such as a city government, uses your bond purchase to raise capital.

In exchange, the organization agrees to pay you back with interest for a specific duration. You’ll receive a set interest payment, meaning you can calculate the rate of return on your investment.

The downside to bonds is the low rate of return. Many bonds offer low interest rates, which could limit your ability to grow significant wealth through bond investing.

On the other hand, bonds can be a low-risk investment option as many government-issued bonds are backed by the entity offering them.

Mutual funds

A mutual fund is basically a managed portfolio of bonds, stocks, and other assets. It can be a good way to diversify.

The benefit of mutual funds is the ability to invest in lots of different assets without having to individually pick each one. This also means mutual funds tend to be slightly lower risk than individual stocks because you’re spreading out the risk among many stocks.

The drawback of mutual funds is their fees, which tend to be higher compared to other investments like ETFs.

Additionally, you might only have access to certain mutual funds within a retirement account, like a 401k.

Index funds

Index funds are technically a sort of mutual fund, but they’re considered passively managed funds, states Forbes. This means an index fund isn’t being actively managed by a fund manager who picks specific assets.

Instead, index funds try to follow what a market index does, for instance, the S&P 500.  The fund holds stocks of companies within the chosen market index. When the market goes up, the index fund tends to rise in value.

Without a fund manager, index funds tend to have lower fees than their managed counterparts. While index funds tend to build wealth slowly, they tend to perform very well over a long time. This makes investing in index funds a great low-cost, low-management option if you’re deciding how to invest 100k for the long term.

ETFs

Exchange-traded funds, also called ETFs, are similar to mutual funds in that they’re a portfolio of assets sold as one unit. Like mutual funds, you can get access to multiple investments while buying and sharing shares of an individual ETF.

Additionally, ETFs tend to work like index funds specifically because they’re built to track certain market movements.

For example, you can choose ETFs related to certain industries.

While ETFs are built similarly to mutual funds, they trade more like stocks. Mutual funds have one price per day, whereas ETFs can be purchased and also sold throughout the day, and the price will fluctuate with the market. ETFs also usually have lower fees than mutual funds.

4. Savings accounts and other liquid investments

While you can make a lot of money investing in real estate or even the stock market, you could also potentially lose money.

Additionally, these assets may make it more difficult to access cash quickly, such as in an emergency.

The solution? Keep some of your money in highly liquid accounts such as checking, savings, or money market accounts. While stocks, bonds, and other investment options are considered liquid assets, having a protected cash fund can help you get the money you need quickly without the chance of it losing value.

These types of accounts are typically interest-bearing, so you’ll still make some money from your deposits.

In addition, keeping money in an FDIC-insured bank means you won’t lose money if something happens to the bank up to a certain amount.

The general recommendation for cash accounts is to keep around three to six months of living expenses for emergencies. This amount lets you have enough for unexpected expenses without losing potential returns by holding too much money in cash.

Expert tip: How 100k keeps earning money

Leverage the power of compound interest with your 100k! Wondering how does compound interest work? Compound interest is the money you earn from your already-earned interest.
This means you earn interest on the total amount in your account, not just your initial deposit.
So if you invest your 100k, over time, it will continue to provide interest indefinitely in some cases.

5 Factors to consider before deciding how to invest $100k

There are a few things you’ll want to do before choosing what to do with 100k. Taking the time before investing will help you choose the investments that make the most sense for your financial situation.

Before investing your money, here are five factors to consider:

• Make a plan for your money
• Pay off debt
• Build emergency savings
• Diversify your portfolio
• Know your tax situation

1. Make a plan before deciding what to do with $100k

Having $100,000 is a life-changing amount of money for many people. The possibilities of what you can do with your money may seem endless, but it’s worth taking a step back before investing.

Take the time to think about what you want to do with your money by asking yourself these questions:

• What do I hope to gain from my investment? Money? Assets like real estate?
• What is my risk tolerance?
• Do I know the tax implications of my investments? Do I owe taxes on the money I received?
• What are my long-term financial goals? Early retirement? Pay off my mortgage? Put my kids through college?
• Is there anything I want to spend part of my 100k on before investing it?

Without a solid investment plan in place, you run the risk of investing your money in a way that will lose money.

For example, you get excited about a new company and put all of your money into their stock. The company doesn’t perform as well as you hoped, and your investment value falls.

In addition, investing without a plan doesn’t always have catastrophic consequences. If you invest your money without a plan for it, you might simply end up with investments you don’t enjoy or don’t want to deal with.

Say you are buying a house to rent out, and you become a landlord. After a few years, you realize you’re not making much money from the property, and you don’t enjoy being a landlord.

This is why it’s essential to think about what you want to do with the money before jumping in to something without researching.

2. Deal with debt before investing $100,000

Debt can be an unfortunate part of life, and a lot of Americans have it.

A study by TransUnion found that the average credit card debt balance per consumer is around $5,733. That debt can quickly eat into returns on investments if not dealt with first.

By paying off debt — especially types of debt such as high-interest debt with credit cards — before investing your 100k, you can take your earnings from your investments as pure profits. If you leave your debt to keep growing, your overall investment earnings will be reduced by your debt plus interest.

For instance, suppose you have $10,000 in credit card debt and have $100,000 to invest. The credit card interest rate is 15% per year, and you expect to make 6% in gains from your investments.

If you don’t pay off your credit card debt, you’ll have $1,500 in additional interest added to your credit card balance. Your investments made $6,000 in interest.

$6,000 – $1,500 = $4,500 in profit

On the other hand, let’s say you pay off the $10,000 you owe and invest the remaining $90,000. You wouldn’t have any interest costs because you’ve paid off the credit cards.

However, you’ll make $5,400 in earnings from your investments.

By paying off your debt first, you’ve almost made an additional $1,000 from investing. Over time, these additional earnings will really add up.

3. Build emergency savings

Do you have a rainy day fund or emergency fund with at least three to six months of living expenses?

If not, filling your emergency fund should be your top priority when choosing how to invest 100k.

An emergency fund is a cash account you can use to easily access money in — you guessed it — an emergency.  Common financial emergencies where you might need cash include:

• Home repairs
• Car repairs
• Medical bills
• Divorce
• Losing your job
• Unexpected travel (such as to visit a dying family member)

To calculate how much emergency savings you need, you must first determine your monthly expenses.

Add up your monthly recurring expenses, such as mortgage or rent, car payment and insurance, average utility bills, cell phone bills, and average credit card bills. You’ll then take the total of your average monthly expenses and multiply it by how many months’ worth of savings you hope to have.

For example, your total monthly expenses average $4,000. You want to have between three and six months of savings, so you’ll need to put $12,000 to $24,000 into your emergency fund.

Generally, the best place for an emergency fund is a high-yield savings account. These give you easy access to your money, as you can usually tie them to a checking account at the same bank for instant transfers.

Additionally, by opting for a high-yield account, you’ll earn interest on your emergency savings, further growing your rainy-day fund.

4. Diversify your portfolio

Does the thought of losing even a small amount of money on the stock market give you the shivers? Or, do you have no problem losing some money with the hopes you’ll make more overall?

These situations refer to your risk tolerance or how much risk you’re willing to take on in your investments. Those with lower risk tolerance generally invest in lower-risk assets with the hope they won’t lose money and will make steady but smaller earnings.

Someone with a higher risk tolerance might be willing to invest in a riskier asset, such as an unproven stock, in the hopes that the returns will be higher than other investments.

Regardless of your individual risk tolerance, it’s recommended that you do what you can to lower your risks when investing. One of the easiest ways to lower investment risk is to diversify your portfolio.

Diversifying a portfolio means investing in a range of assets to offset the individual risk of any single asset.

For instance, if you only invest in newly-released stocks, you’re at a higher risk of losing your money if all of those companies go bankrupt.

On the other hand, you could invest some money in stocks, some in bonds, some in index funds, and some in ETFs across various industries. This widens your portfolio’s ability to bounce back after an individual company or market sector loses value.

5. Understand the tax implications

Depending on how you get your $100,000, you may have a hefty tax bill to look forward to. Some scenarios, such as receiving a life insurance benefit payout, are not typically taxed, explains the IRS.

In that case, you’ll have the full $100,000 to invest how you like.

However, if you get 100k from a bonus at work, severance payment, or other type of income, you can expect to owe taxes on the money.

For example, if you receive a $100,000 year-end bonus in the form of a check, you’ll be taxed 22% for federal taxes, or $22,000, according to CNBC Select. That leaves you with $78,000 to invest — a fair bit lower than the 100k you started with. You may also owe state taxes on your bonus in addition to federal taxes.

It’s always a good idea to talk with a tax expert when you come into a large sum of money. They’ll help you determine if you owe taxes and the amount and may be able to provide strategies to help reduce your tax bill.

You should also consider tax implications after you decide what to do with 100k. Depending on how you invest the money, you may have to pay taxes on the earnings.

Short-term gains vs. long-term gains

Capital gains is the term for the money you make on the sale of an investment. Let’s say you buy stocks for $100 and sell them for $200. You made $100 in capital gains on your investment.

These gains can be short-term or long-term, depending on how long you own the asset.

• Short-term gains: Profit made on assets held one year or less.
• Long-term gains: Profit made on assets held over one year.

When you sell an asset, you often have to pay capital gains taxes. This tax is higher for short-term capital gains and lower for long-term capital gains.

In many cases, you can save money on taxes in your investment accounts by keeping your assets for over a year.

Investing $100k over time

In most cases, it’s best to avoid investing all of your money at once. That’s because markets fluctuate over time. Even if you invest in a variety of assets, you could be investing at a high point in the market.

Instead, consider investing your money over time. You can keep the balance of your 100k in a high-interest savings account to help it make money while you slowly invest it.

An easy way to automatically invest over time is a strategy called dollar cost averaging. Dollar-cost averaging works by investing a portion of your money at regular intervals. This strategy reduces the risk of trying to “time the market,” which often doesn’t work for the majority of investors.

In addition, dollar cost averaging lets you purchase more shares when prices are less expensive and fewer shares when prices are more expensive, leading to a lower average cost per share.

Do I need a financial advisor to invest $100k?

If you’ve unexpectedly received $100,000, you may wonder, “Do I need a financial advisor?” – well it can be a good idea. Financial advisors can help you invest 100k, as they help their clients invest, save, and manage their finances.

In many cases, a financial advisor is like a personal finance coach who can help you better understand your financial situation. They can help you navigate your investment options and develop a financial plan that works for you.

On the other hand, financial advisors could be expensive, depending on their fee structures. They’re also not the professional you likely need if you have tax questions.

In that case, you should seek out a tax professional such as a CPA (Certified Public Accountant).

How should I invest $100,000 to make $1 million?

To invest 100k and make $1 million will take time and patience, and the ability to invest for the long-term. It’s unlikely to happen overnight without potentially devastating risks.

Long-term investing strategies, such as investing in index funds, are often the preferred way to increase the value of your portfolio without inviting a high level of risk.

How can I invest $100k to create passive income?

Investing 100k for passive income is possible if you consider businesses that run themselves or start investing. Passive income is a type of strategy that lets you earn money without actively working. You’ll continue to earn while you eat, sleep, or read the best side hustle books.

But most passive income streams require a lot of work to get started — or a lot of cash. Luckily, if you’ve found yourself with 100k, starting a passive income stream could be a quick way to make extra money.

1. Buy vending machines or ATMS

You can buy vending machines or ATMs and place them at various businesses or locations for a fee, like rent. When someone uses the machine, the money they spend (or ATM fees) is your revenue. You then regularly check the machines for money — and to restock products or cash — to collect your profits.

This stream isn’t perfectly passive since you’ll have to physically visit the machines for maintenance, restocking, and collecting profits.

However, you could hire someone to take care of the day-to-day operation of your business.

2. Purchase a laundromat

Owning a laundromat lets you earn money as long as people are using the machines. There are a lot more expenses in owning a laundromat than other types of passive income ideas, such as utilities and machine maintenance.

However, laundry services are an ongoing need for almost everyone, making a laundromat a relatively safe investment.

3. Flip domain names

Did you know you can buy and sell internet domain names, sort of like stocks? You might consider starting a side business doing this.

It works by buying a domain name you think someone will want for their business.

For example, the person who first purchased “apple.com” was likely able to sell it for a large profit when the technology company needed the domain.

Although many big-name domains are already bought and paid for, you can still make money flipping domains. There are even marketplaces where you can easily buy and sell domain names directly.

4. Rent out quality items

Say you decide to buy a luxury car with your 100k. You can still make money on your purchase by renting out your vehicle for a premium.

And this strategy works with any high-quality items you own. Are you into designer handbags? You could rent them out to people looking for a bag for an event. Other items to rent out include high-quality power tools or yard equipment, an RV, sporting goods, or quality baby equipment.

5. Buy a successful business

A common passive income idea is to simply purchase an already profitable business. You take over ownership and continue to let the business run as it has been to make money.

Unfortunately, it takes quite a bit of upfront capital to do this. Luckily, if you have 100k to invest, you could likely find an existing business within that budget or qualify for a business loan with a 100k down payment.

How much interest can you earn on $100k?

If you’re earning compound interest on your 100k investment, there’s almost no limit to how much interest you can earn on 100k.

However, how much you’ll actually earn in interest depends on a few factors, including where you invest the money and how often you withdraw funds.

For example, if you put your 100k in a typical savings account, your interest rate might only be about 0.5% per year, explains the FDIC. Even with compounding interest, you’re unlikely to make a large amount in interest earnings.

Creating a diversified portfolio of investments, however, could yield a much higher interest rate.

Articles related to investing $100k

If you enjoyed reading this article about how to invest 100k, check out these other articles about investing!

• Investing Money For Beginners: How To Start Investing Today!
• How To Turn 10K Into 100K
• How To Start: Passive Real Estate Investing
• How to Grow Your Money: 7 “Must Do” Tips
• How to save $100k: I did it in three years

Leverage these tips on how to invest 100k for your future!

Figuring out what you should do with 100k can be a daunting — and exciting! — task.

If you’ve found yourself with $100,000 to invest, your first step should be to make a plan for your money. You may want to talk with a tax professional and financial advisor to help create an investment plan that will help you maximize returns on your investments.

Remember to take your time deciding about your 100k, and be sure that the investments you choose are the best ones for you that will bring you financial success.

The post How To Invest $100K? 4 Investment Ideas appeared first on Clever Girl Finance.

The post Wealth Accumulation: A Step By Step Guide appeared first on Clever Girl Finance.

The post How to Grow Your Money: 7 “Must Do” Tips appeared first on Clever Girl Finance.

The post Benefits Of DCA Investing And The Best Dollar-Cost Averaging Calculators appeared first on Clever Girl Finance.