How To Invest 500k: 15 Best Ways To Grow Your $500,000

Do you have $500,000 on hand? If you are reading this article, it means that you have either amassed a wealth of around 500k, are striving to accumulate it, or aspire to have this much one day. If so, you may have wondered about how to invest 500k.

While there is no hard and fast determinant of the most successful investment strategy, it all boils down to your risk tolerance temperament, investment preferences, and returns timeline. 

So, if you are wondering how to invest the money to yield fruitful results in future years, you are in the right place. Read on. 

15 Best Ways to Invest Your 500k

While having 500k to your name is quite an achievement and an advantage that can open many doors, it can also be overwhelming. 500k is a significant amount and can substantially impact your life. 

The key is to invest your 500k to provide a healthy return on investment.

If you have unpaid debt, you can start from there. You can balance paying off your debt and investing depending on your risk tolerance.

Here are 15 ways you can invest $500,000 to make the most out of the amount and grow your wealth in the future. By opting for a wise investment strategy, you are not only devising means to increase your future wealth but also improving your quality of life. 

It is also important not to put all your eggs in one basket. You may choose to invest $200K of your 500k or consider a mix of investment options so that you can spread your risk. 

Without further ado, let’s get started.

1. Invest in the Stock Market

Investment in the stock market may seem scary at first, but you can overcome the anxiety. If you are in it for the long haul, you can opt to invest a hefty percentage of $500k in the stock market and leverage it when you retire. 

You can open a brokerage account and invest in a diversified portfolio of stocks, bonds, and index funds. You can also have the power to sell stocks or other securities from your account without penalization.

Investing in the stock market keeps your investment somewhat liquid, which is why it is a preferred mode of investment over other retirement plans. However, you must remember that returns are not guaranteed, and you may have to pay an account management fee. 

It is important to do your own research and find the best brokerage firm that suits your needs, such as: 

• A stock and ETF company, M1 Finance, is where you could build your stock portfolio for free. Starting from $100, you can already invest and open an account. Read our M1 Finance review and learn about this platform’s services. 
• Vanguard – One of the biggest investment companies and a great place to buy your index funds. 
• I’m personally using DEGIRO, a low-cost European broker which I have written about. Check out my full DEGIRO review here.
• A micro-investing platform, Acorns is a suitable app for new investors and can help you invest a minimum amount. Here is my full Acorns review.

2. Invest in Real Estate

If you have 500k, it suggests you can invest in real estate by making a down payment on some properties that are expected to increase in value in the future. Alternatively, you can invest in Real Estate Investment Trusts (REITs) if you do not want to become a property owner. 

Check out these platforms for your consideration:

• At a low cost, you can invest in private commercial and residential properties through Fundrise, an online investment platform. 
• An innovative platform, Groundfloor lets you start investing in real estate for as low as $10. Learn how through our full Groundfloor review. 
• A secure and transparent platform, Reinvest24 is a property crowdfunding site that allows you to cash out anytime. Here is our full Reinvest24 review. 
• If you prefer a European real estate crowdfunding platform, check out EstateGuru and read our full EstateGuru review for details.

Another option is to purchase property with the purpose of renting it out. This asset would provide a steady monthly income stream that you can use for different purposes. 

Investment in real estate is encouraged as it offers good returns and provides exposure to the residential or commercial real estate landscape, which can be handy in the future. 

However, the downside is that returns are not guaranteed as property value may drop due to market conditions or other reasons. Moreover, real estate is not a liquid investment; if you need to take your money out, it might not happen immediately.

3. Invest in Cryptocurrency

If you have a high-risk tolerance and want to adopt a futuristic approach, invest some portion of the amount in cryptocurrency. The rise of bitcoin has not gone unnoticed by the investors’ community, and the trend of investing in this area is gaining traction rapidly. 

Investing in cryptocurrency is easy with many readily available apps. But, you must determine the currency you want to invest in and how long. The investment can be lucrative in the short and long term, but the element of risk is always there, and you may lose all you invest.

It is important to do some research before deciding to invest.

For free cryptocurrency to start you off on your investment path, check out these platforms:

Exchange	Bonus	Requirements	Sign Up
	$25 in Crypto.com Coin (CRO)	Must use our link, open an account with referral code usmefwh2jp, and stake CRO	Get FREE Crypto!
	$5 in Free Cryptocurrency	Must use our link and open SoFi Invest Android or SoFi Invest iOs account, then redeem a $5 bonus to a new SoFi Crypto account	Get FREE Crypto - Android Get FREE Crypto - iOs
	Up to $250 inFree Bitcoin, dependingon deposit amount	Must use our link and make an initial deposit within 30 days	Get FREE Crypto!
	$50 in Free Bitcoin	Must use our link and deposit at least $400 of crypto within 30 days	Get FREE Crypto!
	$25 in Free Bitcoin	Must use our link and buy at least $100 of crypto within 30 days	Get FREE Crypto!
	$10 in Free Bitcoin	Must use our link and buy at least $100 of crypto within 30 days	Get FREE Crypto!
	$10 in Free Bitcoin	Must use our link and buy at least $100 of crypto within 30 days	Get FREE Crypto!

4. Start or Buy a Business

You can buy or start a business if you want to be actively involved in an investment and generate a regular income stream. If the idea is a hit, you can expand your business, hire more people or sell it if you want to move on. 

For instance, you can acquire a franchise, which requires a hefty investment of around 100k to 200k. You can also invest in the transportation business. 

Setting up an online business that you can manage from home is also a good option if you do not want to invest that much. You can start by making a blog to market your products or services.

✨ Start My Blog Today

There is no limit to how much you can grow, provided the business sells, but experience and good knowledge would give you an edge.

5. Opt for Peer-to-Peer Lending

Peer-to-peer lending (P2P) started in 2015 and is a relatively new investment option. This option allows you to extend loans to individuals to pay off their loans or mortgage. 

However, there are risks inherent in P2P lending and, thus, not advised if you have a low-risk tolerance. It is also important to consider the income score, credit scores, and other details about individuals seeking to borrow money.

Many platforms, such as Mintos, facilitate P2P lending, so you can easily find a medium. Here is our full Mintos review to check the platform’s benefits for yourself. If you sign up using my link, you will get a bonus of 0.5% of your invested amount in the first 90 days!

Try Mintos Now

6. Open a High-Yield Savings Account

Another investment option is to open a high-yield savings account to have an effective source of passive income. Your money stays safe in the account while you continue receiving a monthly income depending on the return percentage.

It is, however, important to note that while a high-yield saving account, as the name suggests, will provide higher returns than the conventional savings account, it offers a lower yield than other investment options like the stock market.

7. Invest in Mutual Funds

Another sound investment option is mutual funds. Go for the blue chip companies if you want to invest in a mutual fund that provides a significant return. Such funds can give a return as high as 10%. 

A good understanding of mutual funds and how the system works is a good idea before you go ahead with the investment decision. 

Check out these comparative reviews to give you a better idea about a mutual fund investment: 

• FSKAX Vs. VTSAX – Which Fund Performs Better?
• FZROX Vs. FSKAX – Which Fund Is For You?
• FXAIX Vs. SPY: Which One Is For You?

8. Invest in ETFs

ETFs (exchange-traded funds) offer a good way to diversify your investment portfolio. ETFs constitute a basket of securities that track an underlying index performance. ETFs are a low-cost investment compared to mutual funds but offer similar features. 

So, the benefit of investing in ETFs is that you do not need to put in a hefty amount. If you do not have much experience in this regard, you have the option to start small.

Check out our tips on how to start investing in exchange-traded funds and these reviews on the different ETFs in the market:

• ARKK Vs. ARKW – Which Tech ETF Is A Better Choice? 
• VIOV Vs. VBR – Which Small-Cap ETF Is Better?
• QQQ Vs. SPY: Which Is The Better ETF Investment?

9. Opening a Solo 401(K) 

If you have self-employment income, you can open a Solo 401(K) account. If you own a business, you must be the sole employee except for any business partner. A Solo 401(k) lets a self-employed individual defer 100% of the compensation (the maximum limit in 2021 is $19,500 for individuals under 50 years of age)

In addition to being a good source of income in the long term, one benefit of this option is that you can reduce the tax bill in the year you contribute to the account. However, it requires extensive IRS paperwork. Additionally, you will have to pay the penalty if you want to access the fund before retirement.

To open a 401(k) account, choose among the best online brokerage firms online, such as Charles Schwab, Vanguard, and Fidelity. These companies also manage different funds that may suit your preferences. 

Here is an overview to give you an idea of these funds’ features:

• SWPPX Vs. SWTSX: Which Index Fund To Buy?
• FXAIX Vs. SPY: Which One Is For You? 
• VUG Vs. VOO: A Comparison Of Two Popular ETF Funds

10. Invest in Bonds

Want to go a safer route? Invest in bonds! 

They may not provide the highest returns, but your money will be safe. You can have a diversified investment portfolio in bonds and add municipality, treasury, and corporate bonds to the mix to improve your prospects.

11. Invest in Art or NFTs

Investing in traditional art, such as paintings, sculptures, and the like, has been around for a long time, but investing in NFTs (non-fungible tokens) is a relatively new option. Nowadays, some platforms facilitate investing in NFTs art pieces without requiring you to store and keep them safe. 

While valuable art pieces are worth millions, you can invest in smaller pieces. Such investment can yield a lucrative profit of 10-15% and significantly increase your wealth. 

12. Invest in Gold

The option to invest in gold has been around for a long time as people have invested in gold and other precious metal assets as a safety net against inflation. Gold values usually rise during economic uncertainty, so you may need to consider that. 

Nowadays, there are easily accessible marketplaces, such as Oxford Gold Group, where you can buy or sell gold assets. However, gold is valuable, and the risk of theft is always there.

13. Opening a Money Market Account

Money market accounts are similar to a conventional savings account but offer a higher return. They are also quite safe, as the Federal Reserve backs them. 

Investing in a money market account may not give higher returns, but if you need to put aside some money for saving purposes, you can consider investing some part of the 500k in a money market account. 

14. Invest in Fixed Annuities

If you want to invest a significant amount of your 500k in one place, invest in a fixed annuity offered by an insurance company. Since the amount is fixed, the value will not decrease in value.

So, if you want to create a safety cushion when you are nearing retirement age, consider fixed annuities. They are low-risk but have a downside. Since the value is constant, it may not fare well in times of rising inflation.

15. Opening a Retirement Account

You can consider opening a retirement account. It will help you save for retirement and offer a tax cushion. Moreover, in times of economic uncertainty when social benefits are being compromised, the money you put aside in the retirement account may be highly useful. 

Alternatively, if you are at a stage in life where you want to grow and improve your prospects, you can invest some amount of money in yourself to learn a new skill or improve your education. It may improve your professional and personal growth prospects and help you progress.

Frequently Asked Questions – How to Invest 500k?

How Much Interest Does $500,000 Earn a Year?

Let’s assume you invest at a rate of return of 5%. If that is the case, your $500k investment will increase to $525,000 in one year, earning you $25,000 by the end of the year.

What Is the Best Return on $500,000?

Some investment options are more lucrative than others and can provide a higher yield. 

The S&P 500 Index can yield the best return on $500,000. With an average return rate of 7%, the 500k can become $1.83 million in ten years. Similarly, private equity or hedge funds also offer the same returns. 

How Should I Invest 500k for Monthly Income?

If you want to invest 500k to receive a monthly income, you can buy rental property or REITs, invest in dividend stocks or mutual funds, etc.

Where Could I Invest $500k Safely?

There are multiple ways to invest 500k and keep the amount safe. For instance, you can invest in a savings or high-yield account, bonds or fixed annuities, etc. 

Conclusion – How to Invest 500k?

It is important to remember that the investment decision you make today will significantly impact your financial circumstances in the future. On the other hand, if you decide not to invest this amount, the money’s value will only depreciate.

The first thing is to determine your financial goals, investment preferences, and other personal considerations on why you will invest your 500k. Grounded on those factors, choose wisely among the suggestions we offered in the previous sections. Take the first step towards your financial empowerment!