Having $75,000 to invest is a great opportunity and will give you many different investment options.
What makes this decision hard for people is not realizing what options they have available and the wave of information that comes your way when you try to figure it out.
These ideas for how to invest 75,000 dollars can help you find the right place for your money.
Ways to Invest $75k
While this isn’t a long term solution to your investing, placing your $75k investment in a higher interest saving account until you know how you want to invest and will give you some interest.
Savings accounts are FDIC insured, so your money is completely safe while you take the time to make the right choice. The latest interest rates on savings accounts include:
Betterment is a robo-advisor that allows you to invest without having to learn anything about investing.
When you sign up for Betterment, you will fill out a set of questions so they can understand how much risk you want to take in your portfolio. From there on, you deposit your money, and the platform takes care of the investing.
Betterment is one of the best hands-off approaches you will find.
Fundrise is an excellent way to diversify your investing into real estate, without the hassle of owning and maintaining real estate.
Instead of researching, buying, selling, or renting, Fundrise allows you to deposit money in your account and let them do all the real estate investing for you. They do this using a real estate investment trust (REIT), where many people invest in large real estate projects together.
The trust managers do all the hard work while you gain a good return on your money. Signing up for Fundrise is easy and only requires an initial investment of $500.
Worth Bonds makes it easy to invest in secured debt for small businesses. Instead of placing your money in a savings account, you can help fund short term loans to small businesses.
These loans are secured by the physical property of the business (usually inventory). If a company were ever to default, Worthy Bonds would seize the property and sell it off so that they get your investment back.
You can invest with Worthy for as little as $10, and you get a 5% return from one of the lowest risk investments you can find.
Stocks are one of the riskier, but also most rewarding ways to invest your $75,000. Stocks work by allowing you to buy a small piece of a company.
As an owner, you get the benefits of company success, and it becomes worth more money. You can also receive dividends that are profits taken and distributed to the owners (shareholders).
Stocks can be purchased more cheaply now than ever before. Brokerage accounts form Ally Invest allow you to buy stocks without paying any trading fees.
Exchange-traded funds (ETFs) make it very simple to invest in hundreds or thousands of stocks at one time. What makes this investment unique is that you can purchase shares of an ETF just like you purchase shares of stock.
You will need a brokerage account, but like stocks, most brokerages have gone to zero fees for purchasing and selling ETFs. Ally Invest is one of the better accounts for doing research with their tools and getting zero fees.
Mutual funds are another way to invest in many investments at one time. Like an ETF or REIT, they allow many investors to pool their money to buy a large number of investments.
In this way, they are “mutually” funding investments. A fund manager chooses the investments, and you can see how well the mutual fund has done over a long period.
There are mutual funds that have been around for decades where you can feel great about where you are putting your money. Many of these funds will require at least a $3,000 investment, but there are some that start lower.
Making an investment that helps your fellow man will not return to you with a financial gain. It is, however, one of the most rewarding investments you can make.
In my family, we give 10% of every dollar we earn to our local church and then give additionally to other charitable organizations as we feel led. These dollars that we give have helped ups appreciate the money we have and the responsibilities we have to help others.
In many markets investing $75,000 for a real estate investment is more than enough to get started with one or two rental properties or with doing a flip.
If you are going to be a landlord, then you will want to make sure you fully understand your taxes and regulations, or you should work with a property manager. For flippers, make sure you know what you are getting into before taking on a renovation.
Owning your own business can be an excellent investment.
If you already have a side hustle that you think is ready to take the next step or if you have a business idea you are sure will take off, then this may be the best place to invest $75,000.
There are many ways to make yourself more marketable. Education in either college classes, certifications, or online courses that expand upon your current skills or teach you new skills can result in a quick return.
Another option is to place some money in a 529 college savings plan to be invested for your future education or your children’s.
If you do not need to draw any income from your investment of $75k, then retirement accounts are a great place to invest.
Depending on your income and marital status, you could be able to invest $40,000 in tax-deferred or tax-advantaged accounts between self-employed, personal, and employer-sponsored retirement accounts.
The most common retirement accounts are”
Annuities are one of the safest ways to invest for retirement. You can put money in, and it gains a rate of return that can be pegged to an index.
What makes them appealing is that once you start withdrawing money, you get the same amount for the rest of your life, no matter what. You can think of annuities as a way to fund your own pension plan.
Cryptocurrency is a topic that brings a lot of opinions. The understanding of this new investment is nowhere near what it needs to be, but if you are willing to put in the time, there is money to be made in trading.
You can get started with Coinbase, which provides an easy interface to purchase several cryptocurrencies and has a blog to help you learn the basics.
How I Would Invest $75,000
Having a plan in place before you invest is the best way to make sure you are not making poor investments.
If I were to receive $75,000 to invest, this is how I would diversify my portfolio.
As I stated above, charitable giving is a top priority in our family. Giving a full tithe on our $75,000 will be where we invest our money first.
There is something about not having to worry about how the money is being invested and re-balancing my portfolio that makes Betterment appealing. An investment of $10,000 that I don’t have to manage at all seems right for me.
I am not currently interested in owning a lot of properties. I do, however, want to have the diversity of real estate. Placing a $15,000 investment with Fundrise can get me into three of their best REITs.
Mutual Funds ($29,000)
This number may seem like a large percentage of my investment, but I will be doing most of this into retirement accounts. In these accounts, I already have several mutual funds that I invest in.
So the $29,000 will be split up into five different mutual fund investments.
I have never been much of a stock trader, but learning new things is important. I know the basics, so taking a portion of my $75k to learn more about options and another stock trading will help me get better with individual stocks.
Worthy Bonds ($5,000)
I want to be ready to invest when a real opportunity arises. Using Worthy bonds to hold $5,000 to invest while it gets a nice 5% interest rate gives me flexibility and a good return.
Savings Account ($3,000)
Just like with Worthy, I want to have money that is ready to go. While savings accounts get lower interest than Worthy Bonds, they are the safest place to store money.
With a $3,000 investment sitting in a savings account, I have a total of $8,000 ready for the next great deal.
I am not as familiar with cryptocurrencies as I am with stocks, so I am only willing to risk investing $500 in crypto as I learn how the markets and trading work.
Final Thoughts on How to Invest $75k
Anyone looking to invest $75k needs to understand the investments they are making. Even if you go with a robo-advisor, you need to know how that service determines your investments and feel good about their methods.
If at any time you are not comfortable with an investment you are about to make, take a step back, ask questions, and be in a place where you can explain to someone else how that investment work.
The only other thing you need to do is get started. Get that money working for you!