- May 16, 2021
- Posted by: Roger Walker
- Category: How to invest
Now that you see them in cash in the image, it seems that you have much more to see the virtual number on the screen, right? Do you have 50k and do you want to be profitable? Do you know what I recommended to invest my sister in? I will tell you how to invest 50k.
How to invest 50k?
Before looking at the riskiest options, I detail those options so that you can put your money in less risky options so that you can live calmly. First, I will recommend that you set aside a couple of amounts for certain occasions, and then we move on to the issue of investing them.
First of all and if you don’t have it, determine the amount of money you need to set aside in an emergency. First, you will need to determine how much it costs you to live a month, and then multiply it as in the example.
- Cost of living 1 month: 1,200 dollars
- Cost of living 6 months: 7,200 dollars
- Emergency fund: 8,000 dollars
- Remaining amount to invest: 42,000 dollars
As you can see, you can round it up because you never know. I’ve been very conservative, but 3 months of anticipated bank expenses would be the right thing to do for the average user. The concept is clear, but if you want me to expand it, you can expand it by clicking here.
Don’t leave money in the bank
The worst thing you can do with the savings you accumulate is to leave them in the bank. You know why? By inflation. Very quickly: every year the price of products and services goes up 3%.
This means that if you have not invested your money, you can buy less each year and therefore lose 3% of your money per year.
Have 5% cash on hand
When I say “have on hand” I do not mean that you have them in cash under the bedspread. You can have them in the bank perfectly, but what I was referring to in the previous point is that you do not leave all the 50k there. My favorite bank, in my opinion, is HSBC. I love it because it’s all online and with zero commissions.
Invest 50k in the stock market
For most small investors who are unsure of where to invest 50,000 dollars, the best way to invest in stocks is through long-term funds. If you can be unconcerned when there are downs, history has shown that in the long run, they always go up.
The advantage of index funds is that they invest in a real stock index, such as the S&P 500. This gives you the greatest possible exposure to the market without considering the specific risks of investing in a small number of stocks in a limited number of sectors.
Invest 50k in a business
The risk of investing this amount in a company or business will depend on its nature. It could be that you decide to put your money in something that already exists or create something new, but here you will have to do it with a lot of head and get good advice.
If you want some help, you can contact me by email and tell me what I think about this.
Make the entry of property and mortgage the rest: I only recommend it if you know 100% sure where you want to live
Buy a property to invest in. In this case, consider that there are houses in other countries that are much cheaper. Some countries like Croatia or Cyprus have a property tax of 0%. Home prices take much longer to recover in times of crisis than the funds I recommended. If you will buy it at your usual address, it seems like 50k well invested, but if you are going to do it to speculate, you better choose the above.
What NOT to invest 50k?
While the top options are a yes or yes, watch out for these.
In a 50,000 dollar car
By the time you take it out of the dealer it is already worth 21% less.
In a property that you are not going to use
You have already seen it above. There are better options with faster and safer returns.
What will an investment portfolio of 50k look like?
Here is a summary of what this portfolio could look like. Of course, you should bear in mind that it could vary depending on your preferences and personal circumstances.
If you are 35 years old, the portfolio could have this composition:
Emergency fund Basic 3-month expenses on bank assets 7,500 dollars (15%)
Cash Money market funds 2,500 dollars (5%)
Bonds Bond funds 7,500 dollars (15%)
Actions Index funds 32,500 dollars (65%)
Total – 50,000 dollars (100%)
This would provide a 35-year-old who doesn’t know where to invest 50k with a solid mix of profitable investments and capital conservation.
Of course, you can see that everyone has a different opinion about it. Still, the basic idea is to create a portfolio that allows you to achieve your investment objectives while accumulating provisions for the things that may happen to you while investing.