Invest $300,000 is a significant accomplishment. Bravo!
Whether you have been saving up over time, made a large sum on the sale of some assets, or inherited the money, investing $300k gives you a ton of options. It also gives you plenty of opportunities to make mistakes.
You can make sure to avoid mistakes by knowing your investment options and understanding how they work.
Ways to Invest $300k
Savings accounts are the safest way to store money due to being FDIC insured. However, because they are so reliable, a savings account is not going to make you a ton of money.
The reason to put this at the top of our list is that you want to get a savings account where you can store your money and get a decent rate of return while you figure out where to put your investments. The top savings account rates right now are:
Betterment gives you the advantages of a financial advisor at a fraction of the cost. Instead of working with a person all the time, Betterment is a robo-advisor that does all your investing for you automatically.
How aggressive your money is invested is determined by a series of questions you answer when you open your account. A person close to retirement that wants to preserve their gains will be invested less aggressively than a person in their 20s.
Our review of Betterment details how easy the platform is to use, that it does an excellent job of helping you diversify, and it reduces the taxes you pay on your investments.
Fundrise makes real estate investing easy for anyone. With as little as $500 to invest, you can get started in one of their real estate investment trusts.
These trusts take money from many different investors and purchase real estate that can either generate income through rent or can be fixed up and flipped. The properties tend to be in very reliable markets, and they have an excellent track record on return on investment.
Think of Fundrise as investing in real estate without having to research or manage the properties yourself and a great way to diversify investing $300k.
An exchange-traded fund is an investment tool that allows shareholders to own a large number of investments at one time. Its biggest advantage is that to invest, you only need to buy a single share, which is usually very affordable.
Just like buying a share of stock in a company, you can buy ETF shares through an online brokerage. Shares can be purchased for no fees through Ally Invest.
ETFs are an easy way to diversify into many different kinds of investments.
Bonds have been one of the safer investments for people looking to shield against the rise and fall of the stock market. In exchange for this safety, you give up the potential for higher yields that the stock market can provide.
You can purchase bonds from the federal government through TreasuryDirect.gov or as a part of your ETF and mutual fund investment strategies.
You can also purchase corporate debt through corporate bonds. One platform that I have been using to invest in business debt is WorthyBonds.com.
Worthy allows you to invest as little as $10 at a time in bonds. This money is used to give loans to small to medium size businesses.
The loans are secured through physical property (think inventory), so you can be sure you will get your investment back if the business were to default on the bond. For your investment, you get 5%. For a secured investment with no withdrawal limits, that is a very nice number.
If you are willing to make an effort to understand the benefits of investing in individual companies, then stocks can quickly increase the value of your $300k.
What makes stocks even more appealing than just a couple of years ago is that Ally Invest and other online brokerage accounts allow you to trade stocks with no trading fees. They also have great tools to help you find the right investments.
Mutual funds are another great investing tool for diversifying your investments. Like ETFs, Mutual funds allow you to get into many different investments at once.
The advantage of mutual funds is that once you have enough to get into the fund, you can invest small amounts over and over and never worry about any brokerage fees.
This used to be a major advantage over ETFs. However, with ETF transaction fees going to zero for many brokerages, you need to seriously consider whether mutual funds are a good idea for you anymore.
I mentioned real estate earlier with Fundrise, but with $300,000 to invest, you could easily purchase your own real estate investments.
In some areas of the country, you could buy an entire house with less than a $100,000 investment. With all real estate, make sure you understand the real estate market entirely and the condition of the property you are buying.
If this is your first time investing in real estate to have an income property, I would consult a property manager who can help you avoid many of the pitfalls first time owners face.
Giving to charity is frequently overlooked as an investment choice. For my family, charitable giving is the first place we invest any income that we earn.
Not only does this help us keep our perspective on what is important in life, but it also helps us to manage the money we have more effectively.
I highly encourage you to give away a portion of your money either to your preferred religious organization or to a charity that works with causes you feel passionate about. For me, this is the one investment that brings the greatest returns every time.
Educating yourself can pay instant dividends. Whether you need to go back to college, take online courses that compliment your current occupation, or go through a curriculum to earn a new certification, gaining more knowledge can only help you to grow your value.
Another place to look at education is for your children. I regularly place money into 529 plans to help pay for my children’s college.
Both of these options can be good ways to invest a portion of your $300,000.
If you have an entrepreneurial spirit, then there are probably several business ideas you have that could make good use of $300k.
If you aren’t the business owner type, this does not exclude you from business opportunities. You might try your hand as a silent partner in an existing business that needs new capital to take the next step to success.
Either way, keep your eyes and ears open to business opportunities that could pay off big with a little investment.
Having debt in your life is like having a negative investment. Instead of earning interest, you are paying interest.
This may not be a bad thing for debts like a mortgage, which has meager interest rates. However, if you have high-interest debt like credit cards, then getting that out of your life can be the best way to use your $300,000.
Some credit cards have interest rates of more than 20%. There are very few investments out there that can beat that amount, and not having those monthly payments hanging over your head will ease your stress levels.
Crypto is short for investing in cryptocurrencies. This new technology is exchanged just like you would exchange money inside the foreign exchange markets.
Crypto has become a hot topic for investors because they saw Bitcoin make people a lot of money. This isn’t a market I would get into lightly. It will require a lot of research into how the technology works and which coins/tokens are worth the investment.
One of the most reliable exchanges is Coinbase. They are FDIC insured for any money that is held in dollars and make investing in the most popular currencies very easy.
How I Would Invest $300,000
Whenever we consider investing a large sum of money, writing out your options on paper can be the best way to make sure you understand exactly what you are doing.
In the below example, you will see my main priority is diversification. I am not going to invest $250k of my total into a single investment option. That would be foolish.
To help you think through your options, here is how I would invest 300,000 dollars.
Amy and I give 10% of all the money we make to our local church. Above that, we give to other charities we believe in when we are able.
Investing $30,000 in our local church provides for people to receive help when they need it financially, emotionally, or spiritually.
Betterment will be the bulk of my stock investing. Having this section of my portfolio be hands-free makes placing a $75k investment or 25% of my portfolio in Betterment.
Getting into real estate and away from the stock market is a priority in my life right now. Fundrise allows me to invest in real estate while keeping my normal busy schedule.
While I am making a $50k investment here, I will be revisiting real estate in a bit.
Worthy Bonds ($25,000)
I always want to have some money in reserve so that if a new investment opportunity comes up, I am ready to take advantage. While a $25k investment is less than 10% of my gross, it puts me in a good place for that next investment.
I used to keep this money in a savings account, but with money invested in Worthy Bonds being 100% liquid, I have moved there to take advantage of the 5% interest with a low risk investment.
Real Estate ($70,000)
One of my next steps is to purchase investment properties. In my area of South Carolina, investing $70,000 is a great number because it will allow me to have a down payment on a property and money for any repairs.
I am not an expert at investing in individual stocks, but I have pretty good instincts on companies that look like they may be ready to take off. Having $20k to invest will allow me to test these instincts and learn more about researching stocks.
I firmly believe in investing in myself and my children. I would take this $15k investment and split it into a single $6,000 investment and three $3,000 investments.
The $3k investments would go into my children’s college accounts and the $6k into online training dealing with this website and investing.
There is always money that I can sink into this website or other parts of my business. An investment of $10k here can make a big difference in those businesses.
Cryptocurrency fascinates me. The technology is really useful and can have major improvements in our supply chains.
That being said, I don’t know enough to make a serious investment. This $5,000 investment is seed money for me to learn and invest more later.
Final Thoughts on Investing 300,000 Dollars
No matter how you choose to Invest $300,000, the most important thing you can take away from this post is to make sure you diversify your investments.
I didn’t put more than 25% of my investments into a single option, and I put only 10% into investments where I am learning.
I want to end this post by letting you know that you can do this. Do not just hand your money off to someone else to manage. Manage it yourself even if you have a financial advisor.