Investing feels very hard for many people and can be stressful.
No one wants to put money into an investment and have that investment tank.
When you move up to a larger sum, like investing 30k dollars, it can feel even more heavy.
The good news is that as long as you are diversifying your investments you can make sure that you aren’t exposed to too much risk while ensuring your investments grow at a reasonable rate.
These ways to invest $30,000 will make it easy for you to identify which investments will work best for you.
Ways of Investing 30k Dollars
If you do not have a solid emergency fund then putting money into a savings account should be your first step before any sort of investment.
That being said, you also want to make sure that you also have a savings account with decent interest. For that I use an online bank to get much higher interest rates.
There are a lot of these banks out there with rates more than 10 times as much as traditional savings accounts.
Fundrise allows you to invest in several real estate investment trusts (REITs) for as little as a $500 investment.
What makes this so exciting is that until companies like Fundrise made these available to most levels of investors, you had to be a certified investor. This means you would have to have at least $1,000,000 in assets.
While the starter portfolio only requires an initial deposit of 500 dollars, Fundrise offers other REITS with different goals. This can include income, aggressive growth or more balanced philosophies.
No matter which you choose, Fundrise is an excellent option to invest in real estate without having to manage a property.
Betterment has emerged as a big name among the top robo-advisors. They help you with your investments by doing all the investing for you.
You don’t give up full control, instead you are able to guide the platform by answering a short series of questions. These question determine how much risk you want to take in your investment mix and then handle the investments for you.
We give more details in our Betterment review, but the service is really top notch, they automatically help with avoiding taxes, and they have added talking to financial advisers as a part of their offering.
ETF stands for exchange traded fund. That is a fancy way of saying that you can purchase a large group of stocks the same way you would buy a single stock from the stock market.
ETFs are great in that you can purchase a small piece of hundreds of stocks all at once and you can see how that mix of stocks has performed over a long period of time.
Even better is that M1 Finance has made it easy to research and invest in more than 2,000 different ETFs with zero trading fees.
Worthy Bonds allows you to invest in the short term debt that many businesses need to bridge cash flow problems.
They do this through issuing business bonds that you can invest in with a return of 5%. This is an extremely low risk investment because the bonds are backed by collateral that must be put up in order for the money to be released.
The value of the loan the business receives cannot exceed 80% of the value of the collateral. This means that if the business owner were to default they can sell the collateral off at a discount and still get all the money invested back.
Mutual funds are the anchor of Dave Ramsey’s retirement investing strategy. They allow you to invest in a large number of stocks all at once and the stocks are managed for you by a fund manager.
Currently, Ally Invest offers more than 8,000 mutual funds that you can invest in with very low transaction fees. This allows you to invest without paying the brokerage anything for the trade.
If you do your research and choose and choose solid mutual funds, you can get very good returns and keep fees low. One of the keys to doing this is to keep your purchase costs low.
Stocks have been the primary way Americans save for retirement and grow wealth. We are used to investing in stocks in our retirement accounts, but mostly through ETFs and Mutual funds.
In this section I am talking specifically about picking your own stocks. This could be for the value they may become or for dividend investing.
Either way, you will need to do your research if you are going to invest large sums into stocks that you pick. While there are less expensive options on the basis of fees, I would still go with Ally Invest here because the tools they have for research are top notch.
If you have not started saving for retirement then there may be no better place to invest your $30,000 than in tax advantaged retirement accounts.
Since our goal is financial independence, retirement accounts provide an avenue to grow our investment while avoiding taxes eating away a portion of that investment.
The most popular retirement accounts are:
Brokerages that can help you with those accounts include:
Since diversifying out of stocks is a good goal for your $30k investment, LendingClub should be on your radar.
LendingClub works by allowing you to purchase pieces of loans that go out to other people. As those individuals or businesses pay of the loans, you get your money back with interest.
The concept is called Peer to Peer lending and is just like what banks have been doing for centuries, but in an easy to access platform for anyone.
You can even choose how much you risk you want to take based on the credit rating of the person wanting to take out the loan.
Overall, LendingClub provides a great way to get good interest on your investment.
Investing in real estate scares a lot of people. The idea of purchasing and doing something with a piece of property can feel overwhelming, but the potential profit of these investments is huge.
Once again, research and understanding is a big part of any investment and real estate is one of the most important avenues to do proper research. Making sure you get a property that is right for your risk tolerance and developing an investing strategy that works for your lifestyle will be key to making this work.
Cryptocurrencies have made some people rich and others have lost a ton of money. As with any investing you need to do your research and understand what you are investing in.
I have several crypto investments now and used Coinbase as my starting point. They make it very easy to get money in and start investing.
While charitable giving will not return a financial gain directly, it does something inside of us that is well worth the investment.
Not only does giving to charity help causes that we believe in, it also helps us to connect with our larger world and puts into perspective why we spend so much time working and investing our money.
For my family giving is a major component of our spiritual lives, so leaving this one out is not an option.
Get Rid of Debt
This doesn’t really feel like an investment, but let’s break it down. If you have 30k dollars to spend and you have $10,000 in credit card debt, can you really get a better return on that money than getting rid of double digit interest?
On top of that, you get rid of the monthly payments, freeing up your monthly budget to do more for you forever.
Investing in yourself has never been more important when it comes to being able to generate revenue. Whether it is taking college courses, getting certified in a new skill, or purchasing knowledge to further a business, this can be a great investment.
For many people there is nothing more rewarding than starting their own business. This can have both financial and intrinsic value.
If you have an entrepreneurial bent, then investing a portion of your $30,000 can be a big step
How I would Invest 30,000 Dollars
Whenever I look through all the options of investing a specific amount of money, I like to run a scenario on how I would take advantage of that opportunity.
These five options are how I would make a $30k investment.
Charitable Giving ($3,000)
In keeping with our religious beliefs, Amy and I would tithe 10% of the money that has come to us. That math is really easy and this $3,000 investment would go directly to our local church.
I always want to get a large portion of my portfolio out of the stock market, but it is hard to forfeit the upside that you can get with stock investments.
Fundrise allows me to get very good returns that are much more stable than stocks.
M1 Finance ($5,000)
Getting into ETFs is an important step to a complete portfolio and being able to invest in them for free is a major bonus.
With more than 2,400 ETF options available. M1 Finance is definitely on my list of investing my 30k dollars.
It is always nice to put some of your investing on auto pilot. By having Betterment invest 20% of my stock investments based on my risk tolerance is very appealing.
Ally Invest ($5,000)
Ally is a top full-service online brokerage. With that full service comes access to all sorts of investments.
Instead of using Ally to invest in some sort of stock based investment I would use it to purchase into bond based mutual funds.
Once again the goal is diversification. With 40% of my portfolio already in stocks, I want to make sure I have some safety, and couple of solid bond funds can do just that.
Savings Account ($4,000)
This isn’t going to blow the doors off your investing, but I like the idea of having a little money that is ready for the next opportunity.
For that reason I am going to put a $5,000 investment into a high yield savings or even short term CD if I can get a better rate. The best rates now include:
Worthy Bonds ($2,000)
This is another place I would hold money for an opportunity that comes down the
Worthy is a really interesting company. They have a decent track record but I will feel much better once they have been around a decade and have survived an economic downturn.
For now I would only place a $2,000 investment until I feel more secure about their future, which looks very bright.
Crypto has been all the rage the last couple of years, but it takes time and learning. While investing $1,000 is a pretty low number as a percentage of my overall investment, this is money I would use to learn the industry.
Coinbase is the best place to get started in cryptocurrencies for people living in the USA.
Investing $30,000 Final Thoughts
Whether you are making a $100 investment or a large one like 30k dollars, the most important thing is to come up with a strategy that works for you.
As you grow the investment, reevaluate that strategy and make sure it is still working as your investments grow.
With the right mix of diversification and growth, you can grow your money to an amount that can benefit both you and your heirs.