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How to invest $50K

The stock market offers a variety of investment options, but there are other opportunities to consider.

Depending on your financial situation and other factors, you could invest your $50,000 in multiple ways, including stocks, ETFs and real estate. But not all options are suitable for every investor.

4 best ways to invest $50,000 right now

If you’ve got $50,000, there are a lot of investment opportunities available to you. Explore individual stocks or diversify your portfolio with ETFs. What’s more, you can easily max out your IRA account — which should take around 12% of your available funds — or get into real estate investment trusts (REITs).

However, which route you take and how much you’ll put into each investment depends largely on your age and how much risk you’re willing to take.

  • If you’re nearing retirement, a more conservative investment route with stable companies and low risk is often the way to go.
  • If you’re in your 20s and 30s, you can add in some risky investments, such as penny stocks or new companies with disruptive technology and services.

1. Dividend and blue-chip stocks are good choices

Why it’s a good option now: Having $50,000 allows you to invest in multiple individual stocks. Choose from dividend stocks, where you can earn up to 4% or more, or you can go with growth stocks if you’re willing to take some risk for a potentially higher return in the future.

And if you want to speculate — consider penny stocks. These are often known to fail, but if you invest in the right one, your rewards can far outweigh any other return on the stock market in a short period.

Another alternative for investors looking for stability and low risk are blue-chip stocks. What’s more, a lot of blue-chip stocks also pay dividends, which makes them a solid option for investors nearing retirement or those who want to minimize risk.

If you’re willing to diversify your investments even further, consider adding ETFs. ETFs have two main advantages over individual stocks: instant diversification and saving money on fees. That’s because you hold multiple stocks or assets with one purchase instead of buying them all by yourself.

Similar to individual stocks, you can invest in blue-chip ETFs and dividend ETFs if you want lower risk and passive income. Or you can invest in ETFs in growth sectors such as tech and healthcare if you’re willing to take the risk for a potentially higher reward.

How to get started: Invest in dividend and blue-chip stocks through an IRA or taxable brokerage account. The best IRAs and best online brokers offer reliability, minimal fees and plenty of research tools. Researching and understanding what you’re investing in is a must when choosing individual stocks.

What to watch out for: Individual companies may go bankrupt or get into legal problems. Avoid investing a huge chunk of your money into one stock.

2. Automate your investment with a robo-advisor

Why it’s a good option now: You can invest in the stock market without doing a lot of research. Robo-advisors are algorithms that allocate your money based on parameters that you set — like risk tolerance. Once you set it up, the robo-advisor will invest your money in mutual funds or ETFs.

How to get started: Research and compare robo-advisors by fees, minimum investment amounts and investment options. Robo-advisors rely on your responses to questions about your investment goals and risk tolerance, so be prepared to answer a short questionnaire before getting started.

What to watch out for: Computer algorithms aren’t perfect. Also, there may not be a wide variety of investment options. Plus, robo-advisors typically charge an annual fee. This can be a flat fee or a percentage, say 0.3% of your invested funds. Some robo-advisors, such as SoFi’s automated investing feature, have no fees.

3. Dip your toe in real estate

Why it’s a good option now: Interestingly, you don’t have to directly buy a house or any other property to get into real estate — you can invest in REITs or through crowdfunding platforms.

REITs can be either publicly-traded stocks that you can buy on the stock market or privately owned stocks that you can buy via the investment company’s platform for any amount you want. For private REITs, though, there are often minimums you have to meet.

REITs often come with dividend payments from tenants. This makes it a decent investment option for those who want passive income and relatively low risk. Also, to make it work, you often have to hold your investment for many years.

How to get started: Invest in publicly-traded REITs through a brokerage account or IRA just as you would stocks. Otherwise, crowdfunded real estate platforms provided access to non-traded REITs, private real estate funds and other real estate opportunities. Compare real estate investing platforms by fees, minimum investment amounts and liquidity.

What to watch out for: Private REITs aren’t as liquid as publicly traded ones, meaning you may find it hard to sell them whenever you want. Also, private REITs may lock your funds for at least five years, or you’ll pay a penalty if you withdraw sooner.

4. Max out your retirement account

Why it’s a good option now: Timing in the market is everything. The sooner you max out your retirement account, the faster you can reach your retirement goals.

If you have already maxed out your 401(k) or will do so by the end of the year, consider opening and maxing out an IRA account if you don’t already have one. Deposit a lump sum whenever you want in your IRA with an annual maximum of $6,000, or $7,000 if you’re age 50 or older. That’s 12% of your initial $50,000.

What’s more, you can invest in stocks and ETFs with your IRA. This makes it an excellent add-on to your individual investment account.

How to get started: If you have a 401(k) with a company match, invest just enough to get this free money. Use the remainder to max out your IRA. Once you’ve reached the IRA contribution limit, return to your 401(k). This will allow you to get the free money offered by your employer while taking advantage of the wider investment options offered through an IRA.

What to watch out for: In most cases, you’ll pay a penalty if you withdraw your money before the age of 59½. Also, consider whether Roth or traditional IRA works best for you. The main difference between the two is when you pay taxes. With a Roth IRA, you contribute after-tax dollars, and you can make tax-free withdrawals when the time comes. With a traditional IRA, your investment grows tax-free, but you have to pay taxes when you withdraw.

How $50,000 can grow

With $50,000, you can start building serious wealth with enough time and wise decisions. Here’s a look at how it might grow in three common investment classes.

$50,000 saved or investedSavings accountBondsStocks
1 year$50,500$53,000$55,000
5 years$52,551$66,911$80,526
10 years$55,231$89,542$129,687
15 years$58,048$119,828$208,862
20 years$61,010$160,357$336,375
25 years$64,122$214,594$541,735
30 years$67,392$287,175$872,470

For this table, we assumed a 1% annual return on a savings account, CD or money market fund —which is optimistic these days; an average 6% return for bonds or bond funds; and 10% on stocks, the market’s long-term annual return. Bond returns vary widely based on bond types, and the stock market has down years while individual stocks can go to zero. So consider these benchmarks only and consider risk as well as return.

Before you invest

One thing is certain: $50,000 is a lot of money. Make sure you prepare and understand your investment options before you invest this money. It may be better suited elsewhere.

  • Pay off your debt. You may earn more money by investing your $50,000 in the right way and then paying off your debt. But you could also lose money if market conditions change or you make a wrong investing choice. Make sure to pay off your liabilities first or at least have a repayment plan before you invest your money.
  • Create an emergency fund. An emergency fund will protect you in emergencies like job loss or a catastrophic event. If you invest all your money, you could suffer losses if you have to withdraw your investment sooner than you otherwise would.
  • Diversify your holdings. This doesn’t mean you shouldn’t invest all your $50,000 in the stock market alone: It means not putting all your money in a single stock or sector.

Alternative investments

Aside from the investment options we mentioned, consider other alternatives.

  • Cryptocurrencies. This is a relatively new investment option that comes with high risk and high reward. If you’re willing to take the risk, you could consider investing a small amount from your $50,000.
  • College savings plans. If you plan to send your kids to college, consider investing in a 529 college savings plan. The cool thing about this option is that you can withdraw your money tax-free for eligible college expenses when the time comes.

Compare investment platforms

Explore your options by asset types, stock trading fee, minimum deposit and signup bonus. Select the Go to site button for more information about a particular platform.

1 - 5 of 5
Name Product Asset types Stock trade fee Minimum deposit Signup bonus
eToro
Stocks, ETFs, Cryptocurrency
$0
$10
$10
when you sign up and deposit $100
Trade stocks in the app or online with $0 commissions. Not available in NY, NV, MN, or TN.
Client disclaimer: US Brokerage services through eToro USA Securities Inc, member of FINRA, SIPC. Crypto assets through eToro USA LLC.
SoFi Invest
Stocks, ETFs, Cryptocurrency
$0
$1
$10 - $100
when you open an account and place a first crypto trade of $50 - $5,000+
A free way to invest in most equities.
Tastyworks
Stocks, Options, ETFs, Cryptocurrency
$0
$0
$200 in US stocks
when you open and fund an account with min. $2,000 for 3+ mos.
Trade stocks, options, ETFs and futures on mobile or desktop with this advanced platform.
Robinhood
Stocks, Options, ETFs, Cryptocurrency
$0
$0
Get a free stock
when you open a Robinhood account
Make unlimited commission-free trades in stocks, funds, and options with Robinhood Financial.
Axos Bank Self Directed Investing
Stocks
$0
$1,000
$150
when you open an account and deposit at least $1500.
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*Signup bonus information updated weekly.

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