Learn How to Invest $200k to Become the Next Millionaire on the List
Learn How to Invest $200k to Become the Next Millionaire on the List
Investing $200k at a go is certainly not the kind of adventure many investment newbies will be glad to indulge in. Nevertheless, it’s this kind of investment bold step that brings new folks into the list of millionaires each year. What separates successful investors from others is knowing the right place to put their money and the right time to do so. A good investment knowledge can turn your $200k into $1m in record time. In this article, you will learn smart ways to invest $200k in some world’s top, high-yielding investment opportunities. We will touch on various investment windows to give you a good start.
Explore Some Awesome Investment Options for $200k and Watch Your ROI Pile Up in Millions.
The first step towards a good start is to analyze your investment strategy, which will basically fall under short-term or long-term classifications. Short-term investment windows come with relatively lower risk than those of the long-term but also is the potential yield. Let’s look at profitable long-term and short-term investment windows:
Long-term Investment Categories for $200k
If you find yourself here, it can only mean that setting your $200k aside for a long time will not undermine any aspect of your life. That’s great!
Most long-term investment opportunities are fairly safe, tax efficient, and have tendencies for high ROI but it also means that your money will be tied up for a long time depending on the agreed duration. Here are some options to consider:
Growth Stocks: I consider growth stocks to be at the peak of stock investment because they promise higher ROI, than other stock investment.
The dividends are plowed back to encourage greater returns. This is a good avenue for you when considering investing $200k long-term. But before delving into this, make sure that you’ve critically analyzed the companies and find that they have favorable prospects.
Bond Funds: bond funds can be issued by municipality or federal government, as well as corporate entities. Upon entering this type of investment, you agree to be paid a specified amount yearly by the bond issuer. And when the bond matures, you can as well get back your capital or reinvest it.
This option is good if you don’t want to be bothered about the ups and downs in the market because the interests on bond funds are relatively stable.
Dividend Stock: this is similar to growth stock. The notable difference is that dividend Stock pays you dividends each year while growth stock plows it back for fast growth.
If investing $200k for a long time will drain you financially, consider buying and holding dividend stock so that you can get a part of the profit from time to time.
Real Estate: Considering that real estate investment requires a good amount of money to get things done rightly, it’s a smart way to invest $200k under the long-term category.
The downside is that you will likely hold for a long time before reaping good returns.
Short-term Investment Options:
People who ply this route do so for 2 main reasons – (1) fear of uncertainty, (2) they need their money soon.
Short-term investment is best for newbies who are still learning the ropes as it offers them easy exit if the need arises. Consider picking any of the following for your investment:
High-yield Savings Account: this type of investment is essentially great for risk-averse investors. It allows banks to regularly pay interest on your deposit. You’re very unlikely to lose any money because these accounts are insured. Though usually small, you can always be sure that your deposit will fetch money from time to time.
Note that the interests on high-yield savings accounts vary across banks. You can start your journey by approaching any bank that is reputed for high interest payout.
- Short-term Corporate Bond Funds: Investing $200k through this channel is great if you are hoping to retrieve your capital in a few months. The issuers of this bond are major corporations who use it to raise money for their investment.
- Cash Management Accounts: this type of account gives you the liberty to diversify your short-term investment.
- Cryptocurrency: there are thousands of old and newly launched cryptocurrencies to buy and hold. It’s my wish, however, to inform you that cryptos are highly volatile assets. They can be an easy lift for you. But they can as well do the opposite in no time. You can try this option with just a fraction of your $200k investment.To invest in cryptos, you need to either subscribe to the services of professional portfolio managers or sign up on crypto exchangers and do the buying by yourself.
Risk Management for a $200k Investment
Some investors will rather use their initial investment as a litmus test, and a learning phase than give out the portfolio to an expert. But since we are talking about how to invest $200k, it doesn’t sound like the amount anybody will toss around carelessly.
The risk management for a $200k investment needs an expert’s proficiency, not a newbie’s guesswork. It’s, therefore, our sincere advice that you take the first step by getting sound financial advice from recommendable experts.
You ought to evaluate your status before venturing into any kind of investment. By status, we refer to your level of activeness in the overall deal. You certainly belong to either of the subsequent status:
- Active Investors – those that take part in the day-to-day activities of their investment. They put in effort to learn and follow market trends.
- Passive Investors – those that entrust the affairs of their portfolio to third party experts to manage it for agreed commission.
Best Ways to Invest $200k without Getting Your Fingers Burned
If you know where, when, and how to make your investment, then you’ve got no need for an expert. As a matter of fact, you are an expert already and can handle your own portfolio at ease, but that is if you have all the time needed for it. Otherwise, you may just find out that knowing what to do isn’t enough.
A good investor will never put all their eggs in one basket. Wisdom, they say, is profitable to direct. Diversification is key to sustainable investment adventure. Diversifying a $200k investment will give you a balanced portfolio. Understand your goal and define your approach. This will give you a clue on where to pitch your tent.
How to Invest $200k for Passive Income
You are probably one of those who don’t deem it fit to embark on the pressing task of learning all it takes before starting their investment. Good thing is, most of the people like you have some decent chunk of passive income because whatever kept them so busy likely brings some streaks of passive income here and there.
If you have no immediate use of this passive income, your best shot would be a long-term investment. Consider exploring the services of reputable portfolio managers with verifiable track records.
If you have the intention of investing $200k, you can design your contract to allow you to inject the funds in bits, just as it comes to you.
Bottom Line
Not all investors are billionaires but all billionaires are investors. What this means is that for anyone to really be on the ladder of wealth creation, they must be investors who grow wealth in multiple dimensions. Investing $200k is an excellent way to start your portfolio but caution must be applied. When you are not sure of the right thing to do, don’t hesitate to subscribe to the services of experts. Be on the lookout for new things because investment windows are dynamic. Follow the trend, learn the ropes, and invest when your analysis shows good prospects. More importantly, don’t forget to diversify your investment.
Good luck!
