If you are thinking about how to make money with 50000 dollars, there are some legit options you can try out.
You can choose to invest in the stock market, or acquire Bonds and ETFs but are they the only options available?
It makes sense if that’s all you can think of because a lot of Americans have shares in at least one company. But there’s more.
Firstly, ensure that you are in a good financial situation. You can’t have debts and want to invest a whopping $50k, it’s not the right investing strategy. So, settle all financial issues you may have and proceed to make more money with your 50000 dollars.
In this article, I will show you other options available for your money. Keep reading!
How To Make Money With 50000 Dollars?
The only way to make money with 50,000 dollars is to invest. Invest in something that will yield returns. That way you can get your $50,000 back and make more money.
Here’s how to make money with 50000 dollars.
#1. Invest in Stocks
One of the best ways to make money with 50000 dollars is to invest in the stock market. There are a lot of viable stocks to buy if you are just aware of them. There are even low-risk, high-reward stocks to invest in.
Stocks are perfect for a lot of reasons, one of which includes it gives you a right to ownership of the company. Look at Apple, for instance, doesn’t it sound nice that you will own a part of Apple if you buy their stock? And the best part is that they recently split their stock, which makes it more affordable to a lot of investors.
Read our guide on how to buy apple stock direct to know the next right steps to take. This is of course if you want the Apple stock.
The idea is to choose from the very long list of viable stocks available and invest your money. Go through this list of best stock screeners to use that can ease the process.
Generally, your gain or loss on the investment depends on the performance of the company and its stock. This means that if the company you choose to invest in experiences some financial issues, your investment could reduce in value. Regardless, buying good stocks pays well over time especially through dividends.
Bear in mind that no investment is risk-free, but there are low-risk investments. Also, you don’t need to invest the entire $50,000 in the market yourself. Once you’ve decided on your plan, you’ll need to open a brokerage account to get access to various types of assets (like stocks, mutual funds, exchange-traded funds, and bonds).
#2. Invest in Bonds
Bonds are debt instruments that represent a loan made by an investor to a borrower in return for a fixed interest rate payment and the bond’s face value when the bond matures.
Bond prices are inversely related to interest rates: when rates go up, bond prices fall and vice-versa. Bonds available for investors come in four primary categories.
- Corporate bonds: These bonds are issued by companies. They do so because the market offers more favorable terms with lower interest rates when the bonds mature.
- Municipal bonds: They are issued by states and local government entities. The bonds generally offer tax-free income for investors.
- Government Bonds: This category of bonds is often referred to as “Treasuries”. They come in several maturity stages and are considered risk-free.
- Agency bonds: These bonds are issued by government-affiliated organizations.
Learn how the act of Maximizing Your Portfolio with Diversified Investment Opportunities in 2023
#3. Mutual Funds
A Mutual fund is a type of investment vehicle that consists of a portfolio of stocks, bonds, or other securities. They are operated by money managers who allocate the fund’s assets and attempt to produce income for the fund’s investors. Mutual funds are usually the investment of choice in 401(k) plans.
Unlike stock, mutual fund shares do not give their holders any voting rights. A mutual fund share represents investments in many stocks (or other securities) instead of just one holding.
The mutual fund can be a passive index fund that monitors a market index like the S&P 500. Index funds are usually low-cost funds. Mutual funds generally carry a higher expense ratio than an index fund and can make money with 50000 dollars.
#4. Invest in ETFs
An ETF (Exchange-Traded Fund) is a type of fund that holds multiple assets, instead of just one like a stock. Because there are multiple assets within an ETF, they can be a popular choice for investors who want to diversify.
Although they are much like mutual funds, they trade like stocks. Many ETFs have low expense ratios and broker commissions than buying the stock directly.
The price of an ETF’s shares will not remain the same throughout the trading day as the shares are bought and sold on the market. This is unlike mutual funds, which are not traded on an exchange, and trade only once per day after the markets close.
Their holdings are transparent on a daily basis. While Mutual funds report holdings a few times in a year.
An ETF can own a large number of stocks across various industries, or it could be specific to one particular industry or sector. So, you can decide to make more money with your 50000.
#5. Buy Certificates of Deposits
Certificates of Deposits (CDs) are FDIC-insured savings vehicles banks, credit unions, and brokerage firms offer. They can run for a long period, from six months to two years. The idea is to leave a lump sum deposit untouched for the agreed term, after which you will be paid the agreed interest rate for your money.
The best way to maximize CDs is to buy them strategically so that there’s one coming due at the interval time.
They are a safer and more conservative investment than stocks and bonds, offering lower opportunities for growth, but with a non-volatile, guaranteed rate of return. CDs can serve as another means to make more money with 50000.
#6. Invest in Real Estate
Another option to choose how to invest 50k is to invest in real estate. A lot of people love this investment because it’s something you can see and easily monitor by yourself. Unlike stocks, mutual funds, and ETFs. Also, it is one of the fastest ways to make more money.
A Gallup Poll revealed that Americans who do not own either stocks or homes are more inclined to see real estate (31%) as a better investment option than stocks (18%), while 23% choose savings accounts or CDs.
Although 50k may not help you buy an entire property, it can still serve as a down payment on a property you want to purchase.
If that doesn’t sound right to you, you can choose to invest in real estate indirectly through REITs (real estate investment trusts). REITs are publicly traded stocks that work a lot like index funds. This can be another good option if you want to make money with 50000 dollars.
#7. Invest in your Retirement
You wouldn’t have this $50000 forever. So it’s best to invest it into something that will continuously yield results in the future. As Warren Buffet said, “If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes.”
You can invest in your retirement in these two ways:
IRA stands for Individual Retirement Account. It is a tax-advantaged account set up separately by individuals to track their retirement savings. It can either be a Roth IRA or a traditional IRA. Your IRA depends on your employment status and has some limitations surrounding it.
The annual contribution limit for 2019, 2020, and 2021 is $6,000, or $7,000 if you’re age 50 or older. If you withdraw money from an IRA before age 59, you are subject to an early-withdrawal penalty of 10%.
You can use your $50k to contribute to your 401(k) or other employer-sponsored retirement accounts. This adds up to the amount you save for retirement. A 401(k) has an annual contribution limit of $19,500 for 2020 and 2021 ($26,000 for those ages 50 or older).
#8. Open a Taxable Brokerage Account
A taxable brokerage account is similar to a retirement account like IRA or 401(k) but without the tax benefits.
Conversely, with a brokerage account, you can purchase stocks, Mutual funds, and other assets with your $50k. You can also withdraw money at will. It gives you the opportunity to diversify your investment and make more money.
See this: 10 Best Fixed Rate Bonds 3 years In 2022 | Expert Guide
Deciding Your Investing Style
It may sound very easy when someone mentions the word “Invest”. However, it’s not as easy and straightforward as it sounds.
For example, if you want to invest in stocks, ETFs, or Mutual Funds, you have to know what type of stocks is viable to buy at the moment, if it’ll yield dividends or crash in the nearest time. You’ll need to know when to adjust it over time.
To a lot of people, making such decisions can be very tricky. So, you can decide to:
#1. Hire a Financial Advisor
If you are just interested in making money with your 50,000 without caring about the whole process involved, hiring a financial advisor is the best option for you.
They are available to manage your investments and answer any questions you might have. They will advise you on the best investment strategy to use at different times in the market.
Generally, Financial Advisors work with investment banks and could be very expensive.
#2. Use a Robo-Advisor
If you choose to use online investment platforms, Robo-advisors can be an added advantage. A Robo advisor is an investment product that allows you to take risk surveys and helps you to build your investment portfolio such that it suits your investment goals.
With Robo-advisors, you don’t need to worry about all the details. Just sit back and let them work for you.
The good side of using Robo-advisor is that they are relatively cheap. Some cost around 0.20% per annum, while some others cost 0.15% yearly.
#3. Invest Yourself
Well, if you find any of the options above unappealing to you, then you can decide to be in charge of your investing styles. The first step to do this is to open a brokerage account for yourself because that is where all your stocks, and/or asset will be stored.
It is a good option because you will save broker management fees and lots more. However, if you make the wrong investment decision, you can lose your money.
If you are in a position where you have $50k to invest and you are wondering how to make money with it, then there are a lot of options to choose from. Whether you are a new investor or an experienced one, these methods can be of help.
But, You will have to put in the work to make these investments make money for you. It is not one of those get-rich-quick scams or money-making processes. These are methods a lot of people use to build wealth, as it wouldn’t just happen overnight.
Ultimately, you will have to choose which investment is right depending on your financial goals, and risk tolerance level.
I hope this helps you make a good decision.
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