Do you have $200k and wondered about investing it for income? We’ll serve you a spicy guide on the best options to invest in. Basically, the only way to make more income is by making lots of profitable investments, right?
The bold step to invest such a huge amount could be that turning point that your life needs to gear towards the best.
So, while others prefer to stick to their 9-5 jobs, you can make the most of that $200k by investing it.
See what this article says by reading on;
Table of contents
What do I Need to Know Before Investing?
There’s a lot you can know before taking that move that can either make or mar you as there are a plethora of investments in existence.
All you need to do is to study which is best for you and go with it but first of; seek financial advice.
When seeking financial advice, it is important that you find an expert financial adviser.
The role of financial advisors cannot be overemphasized. They understand what the market situations are and give you a distinct ROI that a particular investment can yield.
Also, a financial advisor who knows his onions has the ability to study circumstances surrounding your finances and then, suggest the best one you should invest for income.
No! the consultation isn’t free but trust me that what you will end up paying will pass a token for what that invaluable advice can cost you.
READ MORE: Saving vs Investing: When to Choose & How to Do It
What are the Best Options for me to Invest my $200k?
These are the best ways you can invest $200k for more income. But, see what considerations you must make; age and investment goals.
A financial advisor will ask you to split this bulk sum into several investment buckets to increase your earning potential.
Take a close look at the best options of investment you can ever have.
#1. Invest in Real Estate
This is a very rewarding investment opportunity you can take up especially if you won’t be accessing your fund every now and then.
You can allocate 10-15% of your $200k into and buy properties while you let the payments from your tenants serve as a passive source of income for you.
Also in real estate, you can invest in some Real Estate Investment Trusts where you get some proceeds from real estate without doing the work of a landlord.
In real estate, you can do any of these;
- Buy a house and fix it up
- Invest in a REIT
- Buy and hold rental properties.
READ MORE: What is Thematic Investing? How it Works, Pros and Cons
#2. Stock Market
Here, you can allocate about 40-50% of the money you have and invest for income it expedites your savings for retirement in earnest.
With the help of a brokerage account, you can invest in a number of stocks easily.
Alternatively, you can become a do-it-yourself investor but before that happens; you will have to learn the rudiments of stock marketing and perhaps, find a dependable Robo-advisor.
#3. Certificate of Deposit
Another way to generate a passive income for you is by investing 200k for income in a certificate of deposit. This is if you wouldn’t be having an immediate need for your money within the next 6 months.
Then, you can get a better interest rate than that which your checking account will give you.
However, there are two things you must consider. They are;
- Interest rate: This helps gives you a better perspective of what the interest rates are like so you’ll probably know how if you will settle for either the short-term or long-term investment.
- Time: The mental calculation of how long you can stay without the $200k you invested is yours to do. Bear in mind that the longer you invest in a certificate of deposit, the more mouth-watery your interests are.
Below are some of the common types of certificates of deposit that you can invest in. Choose which suits you best.
- Bump-Up Certificate of Deposit: This type of investment does not restrict you to low-interest rates as long as you remain committed to the same bank.
- Liquid Certificate of Deposit: Here, you can take out your funds and not pay a penalty. However, the interest rate for this investment is relatively poor.
- Step-Up Certificate of Deposit: This type is often accompanied by increased interest rates from the available one as at when a CD was bought.
- Jumbo Certificate of Deposit: This requires a high balance of at least, $100. and comes with a higher interest rate too.
READ MORE: How to Start Investing Money for the First Time
#4. Cryptocurrency
Investing in cryptocurrency is a way to go but not one for the faint-hearted. It runs on blockchain technology with no government backing. (harappa.education) Hence, it is very risky.
There are several digital currencies that have marketable values that you can trade on crypto exchanges.
It is important to note that there are downtimes in the crypto world.
#5. Mutual and Exchange Traded Funds
This is a conglomerate of investors putting in several fractions of deposit to be invested in a list of ventures.
A manager of the funds sees an opportunity worth investing in and grabs it with all of his might.
The risks in this kind of investment are shared among the investors unlike one where you have to bear the risk alone.
READ MORE: 15 Real Estate Investing For Beginners In 2023
#6. Peer to Peer Lending
This too can serve as an alternative option on how to invest your $200k in 2023.
You can boycott the bank’s strategy of lending out your money to people so you stand the chance of making more income for profit.
Deposit the money with a peer-to-peer lender who will replicate the bank process and give you a viable amount as your profit.
READ MORE: How to Invest: A Beginner’s Guide to Investing in the Stock Market in 2023
#7. Savings Account
As much as there are lots of investment opportunities, you may choose not to gamble with your money. Hence, they resort to saving it up in a regular account.
Most times, the interest rates are ridiculous, so you can actually make more income by locking it up for a certain period.
READ MORE: What Is Dividend Growth Investing? | A Full Guide To Massive Wealth
#8. Invest in Full-Service Brokerage
The full-service brokers generally provide the whole portfolio options which you are able to avail yourself of at a price that is discounted.
However, the primary difference among the entire service brokers is in fact organizing the best portfolio for you.
They may take care of all of the investing methods for you, though this will set you back comparatively much more when compared to a standard discount broker. The typical amount is given for coping with the portfolio at a mere one.
READ MORE: What Is Trust Investing? Overview, And How It Works
#9 Invest in Gold
Loads of experts think investing in gold along with other precious metals is actually essential, mainly because these choices offer a hedge against inflation.
You can start by finding a plethora of opportunities that allow you to invest in physical gold.
It is best for you if you are always perturbed about the unsteadiness in the market. Investors who wish to buy valuable commodities which have stood the check of time must also think about gold.
#10. Plan Ahead to Get Yourself a Better Life
This is the best decision you can ever take as a person. This is because, asides from the options listed above for more income, there are other things you can do to live a better life.
They are;
- Pay off some of your outstanding debts
- Buy some insurance to protect your assets and;
- Save for retirement
READ MORE: Why You Should Consider Long Distance Real Estate Investing?
Final Thoughts
Considering your age and goals, $200k is a huge sum if you can invest it wisely but can quickly go down the drain if you fail to take a wise decision.
Ensure you involve the right persons to guide you through the investment processes and you will be glad at where you see yourself a few years from now.
Go with any of the options and invest your money to secure a stress-free financial future for yourself and your family.
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