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How to invest $50k

Here are 5 of the best ways to invest $50,000 in Canada today.

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No matter how much money you make, $50k is a decent chunk of change. Invest it wisely with any of our top 5 picks for how to invest your cash. Plus, with an amount this large you have the freedom to choose as few or as many of these options as you’d like when deciding where to invest your $50k.

How to build a $50,000 investment portfolio

What should your $50k portfolio look like? It depends on several factors like your age, goals, risk tolerance and timeline.

Your investing goals will likely be more aggressive in your 20s to 30s than they will be in your 50s. If you’re in your 30s and looking to build a portfolio aimed for growth, this is what it may look like:

Investment typePercentage
GICs and bonds5% to 20%
Stocks, ETFs and mutual funds50% to 75%
Peer-to-peer lending, real estate and alternative investments0 to 25%

Before you invest $50,000

There are a few financial boxes you should check off before you invest $50,000:

  • Build an emergency fund. We recommend keeping 3-6 months of expenses in a high-yield savings account, so it’s available when life throws an unexpected curveball.
  • Save for your kid’s education. If you have children, consider setting aside a portion of the $50k to save for post-secondary education.
  • Create a vacation fund. Pay for your next adventure in full by keeping some money in a high-yield savings account.
  • Pay off debt. It’s always best to pay off high-interest debt before you invest because you pay more in interest than you’d earn in any investment vehicle.

Invest in the stock market with a self-directed trading account

The stock market can be a great way to grow your wealth, as long as you’re comfortable making your own trades.

Pros

  • Low-cost online brokers. Many online brokers offer low fees, small minimum investments and commission-free trades.
  • Comprehensive options. You can invest in a range of stocks, bonds, mutual funds and ETFs.
  • Easy to diversify. Spread out your risk by investing in ETFs and low-cost index funds.
  • Beats inflation. The stock market produces an average 5.6% yearly return (taking into account inflation), making it a good way to accumulate wealth and stay ahead of the cost of living.
  • Liquid investment. It’s easy to sell off some of your portfolio when you need it.

Cons

  • Volatility. The stock market is very volatile and experiences daily dips and swings.
  • Can be risky. If you throw all your money in stocks instead of making a plan to diversify, you could lose all your money.
  • Research is required. Depending on your level of skill and how comfortable you are with self-directed trading, you’ll need to do some research on the best assets for you.
  • Watch out for fees. Some brokers charge hefty fees and commissions, which could eat into your profits.

Name Product Available Asset Types Stock Fee Option Fee Account Fee ETF Transaction Cost Feature Table description
Interactive Brokers
Stocks, Bonds, Options, ETFs, Currencies, Futures
Min. $1.00, Max. 0.5% of trade value
$1.50 min. per order
$0
Min. $1.00, Max. 0.5% of trade value
Extensive trading capabilities and global investment tracking.
Access market data 24 hours a day, six days a week and invest in global stocks, options, futures, currencies, bonds and funds from one single account.
OFFER
Wealthsimple Trade
Stocks, ETFs
$0
N/A
$0
Free
Get 2 free stocks when you open a Wealthsimple Trade personal account and deposit and trade at least $150.
Pay no commissions when you trade Canadian stocks and ETFs with Wealthsimple Trade.
Scotia iTRADE
Bonds, Options, Mutual Funds, ETFs, GICs, International Equities
$4.99-$9.99
$9.99 + $1.25 contract ($4.99 + $1.25 contract if completed 150 trades or more a quarter)
$0
$9.99 ($4.99 if completed 150 trades or more a quarter)
Pay no annual account fees.
Buy, sell and trade ETFs, Equities, Options and more with competitive commissions.
CIBC Investor's Edge
Stocks, Bonds, Options, Mutual Funds, ETFs
$4.95 - $6.95
$4.95 - $6.95 (+$1.25 per contract)
$0 if conditions met, otherwise $100/year
$6.95
$4.95 - $6.95 is applicable for online stock, ETF and option trades only. Pay $4.95 when you qualify as an Active Trader (trade 150+ times per quarter).
An intuitive and easy-to-use platform with access to a variety of tools that help you make smart decisions and trade with confidence.
Questrade
Stocks, Bonds, Options, Mutual Funds, ETFs, GICs, International Equities, Precious Metals
$4.95-$9.95
$9.95 + $1 per contract
$0
Free
Get $50 in free trades when you fund your account with a minimum of $1,000.
Opt for self-directed investing and save on fees or get a pre-built portfolio and take some of the guesswork out.
OFFER
Qtrade Direct Investing
Stocks, Bonds, Options, Mutual Funds, ETFs, GICs
$6.95 - $8.75
$6.95 - $8.75 + $1.25 per contract
$0 if conditions met, otherwise $25/quarter
$0 - $8.75
Get up to 50 free trades. Be one of the first 100 new Qtrade clients to use the promo code 50FREETRADES and deposit a minimum of $10,000 (or top up to $15,000 to get $150 transfer fees waived). Valid until December 31, 2021.
Qtrade Direct Investing offers low trading commissions and an easy-to-use platform with access to powerful tools and a wide selection of investment options. Trade 100 ETFs free of charge and thousands more for $8.75 or lower.
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Invest in real estate

With $50k to invest, there are several ways you could invest in real estate. You could go through a company like Wealthsimple to purchase real estate investment trusts (REITs) through an exchange traded fund (ETD). Alternatively, you could connect with commercial property developers through a peer-to-peer lending platform like Lending Loop, or put a downpayment on a house and rent it out yourself.

Learn more about property investing in our detailed guide.

Pros

  • Passive income. Real estate is an attractive investment because it produces a steady flow of income.
  • Plenty of options. With $50k, you can choose to invest in REITs, commercial properties or your own rental property.
  • Safe options. If you want to invest in real estate in the safest way possible, you can purchase REITs, which are made up of hundreds of different properties and trade like stocks.

Cons

  • May need accreditation. Some crowdfunding sites won’t let you directly invest in real estate without qualifying as an accredited investor.
  • Possible risk of default. If you choose to invest in a single property, you could lose your money if it defaults.
  • Illiquid investment. Real estate can’t be easily sold or converted to cash, so it’s not the best option if you’ll need your money soon.

Invest in bonds

If you plan on making a big purchase in the near future, such as buying a home or sending the kids to college or university, it may make sense to invest your money in bonds. Terms typically range from a few months up to 30 years.

Pros

  • Little risk. In general, bonds are considered stable investments and carry less risk than other securities.
  • Provide passive income. Bonds produce a steady, fixed income and offer higher returns than other safe investments like savings accounts.

Cons

  • Risk varies. Government bonds are typically safer than corporate bonds, although this isn’t always the case. You’ll want to check what letter grade it was assigned by the credit rating agencies.
  • Higher investment minimums. Unlike stocks, bond prices usually start at $1,000. But some can cost much more than that.
  • Could lose value. Your bond could lose value if the issuing entity defaults or interest rates rise when you’re ready to sell.

Invest with a robo advisor

If you’d like some guidance on how to invest $50k, a robo advisor may be a good alternative to a traditional adviser.

Pros

  • Lower fees. Required fees and investment minimums are much lower than with a traditional financial adviser.
  • Goals-based investing. Robo-advisors make algorithmic recommendations based on your goals, risk tolerance and investing timeline.
  • Requires minimal time or effort. Robo-advisors keep your portfolio in tip-top shape by performing routine tax-loss harvesting and automatic rebalancing for you.

Cons

  • Limited flexibility. You typically can’t choose your own investments.
  • Not entirely personalized. Robo-advisors give advice based on the questions they ask you. But they can’t ask follow-up questions if your situation is unique.
  • Managed by a computer. While you can still communicate with customer service (and many times, financial advisors), if you prefer face-to-face discussions about investing, this may not be the best option.

Name Product Minimum deposit to invest Funding methods Management fee Available Asset Types
OFFER
Wealthsimple Invest
$1
Direct deposit, Bank transfer
0.40% - 0.50%
Stocks
Get a $50 bonus when you open and deposit $500 in your account. Trade and Cash accounts are not eligible.
Questwealth Portfolios
$1
Direct deposit, Bank transfer
0.20% - 0.25%
Stocks, Bonds, ETFs, Commodities
A robo-advisor offering low fee portfolios that are actively managed and dynamically rebalanced when market conditions change.
Moka
$0
Automatic bank withdrawals
$3/month
ETFs
The Moka app rounds up every purchase you make to the nearest dollar and invests the spare change into low-cost exchange-traded funds (ETFs).
OFFER
Justwealth
$5,000
Direct deposit, Bank transfer, Automatic bank withdrawals
0.50%
ETFs
Receive a cash bonus of $50.00-$500.00 when you open a new Justwealth account. RESP accounts require no minimum deposit to begin investing.
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Contribute to your RRSP (or Spousal RRSP)

If you’re looking to save for retirement, you can get a jump start by opening or contributing to your Registered Retirement Savings Account (RRSP).

Pros

  • Tax-deferred growth. You fund an RRSP with pre-tax money, so it can grow in the account without being subject to tax until you retire (when you’ll likely be in a lower tax bracket).
  • Use funds to buy your first home. You can withdraw funds before you turn 71 for qualifying expenses, such as your first home (through the Home Buyers’ Plan) or certain educational expenses (through the Lifelong Learning Plan).

Cons

  • Can’t use funds until retirement. You’ll pay a penalty if you withdraw RRSP funds before you’re 71.
  • Limited investment options. RRSP plans use simple investment vehicles like stocks, bonds and mutual funds.

Bottom line

Investing $50k is a large sum of money, which means you have potential for larger returns. If you have multiple goals you’re trying to reach, splitting it up among different investments may be the best option for you. Take some time to map out your goals, risk tolerance, and strategies you’re willing to use to diversify your portfolio. Then, compare investment platforms until you find the best options for you.

Frequently asked questions

Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading CFDs and forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades.

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