Explore popular options such as brokers or robo advisors to help you with your investments. Also look out for a savings account, peer-to-peer lending, or real estate.
If you have $ 20,000 the best thing you can do with it is to invest. Now there are a large number of options – for example, you can invest in yourself, real estate, the stock market, and more.
In order to decide where to invest better, study the most relevant options at the moment in order to let your money work for you.
6 Best ways to invest $ 20,000
- A robo-advisor
You may know that a robo-advisor is like a regular financial consultant, but there is a significant difference. Sometimes consultants offer expensive investments while the robot creates a series of algorithms to select and adjust your investments over time. Moreover, a robo- advisor is based on your tolerance for risk, resources, investment timing, and more. Thus, you can choose for example a regular or taxable investment account or set up an IRA. Thus, investing your money with a robotic advisor is a good option for investing in the stock market.
- A broker
If you do not want to invest with robot-advisor and would rather do it yourself, brokers can help you. Before the advent of online brokers, people had to pay huge commissions to the broker to transact on their behalf. Now you can turn to an online broker who, for a small amount, will help you get an idea of the stock market and tell you where to invest money.
- Real estate
Of course, you can always buy a rental property and become a landlord, but that will deprive you of the benefits of investing in large scale projects. You may be aware that until recently you needed to be an accredited investor in order to invest in large commercial projects. However, there are now real estate crowdfunding investment sites that help create loans for people who buy commercial real estate. Moreover, you will be surprised to learn that you can invest with as little as $ 500.
- A savings account
If you are thinking of investing in a high yielding savings account, it is recommended that you invest only half of your money, as the return on investment will not be great. High-yield savings accounts can give you about 1% annual interest rate, which is good enough for a savings account. However, you probably understand that it would be better to invest in the stock market. Of course, this is more risky, but the potential benefit is also much greater.
- Peer-to-peer lending
You probably know that peer-to-peer lending is a way to lend money to someone who needs it. These can be completely different situations, from a business idea to paying off a credit card debt. Many people choose exactly peer-to-peer lending because the potential profit can be much higher than if you were investing in stocks. However, you should also remember that you will have to face certain risks as many people do not repay loans on time or do not repay money at all. Therefore, before investing your money in peer-to-peer lending, you should do a research to make sure it is right for you.
- Your business
Of course, if you want to get great value over a long period of time, then you should definitely consider starting your own business. Remember that this is also quite risky, so it is not at all advisable to invest the entire $ 20,000. If your business is not successful, you will lose everything.
However, in order for your business to prrosper, you must first create a good business plan and consult with people who already have a successful business. You need to define the main goal of your business, analyze the market and competitors, define your products and services, create a marketing plan, and much more. In other words, if you do not have a great idea and business plan for its implementation, then you should not invest in the business.
