Investing $50,000 is an exciting opportunity to grow your wealth and secure your financial future. Whether you’ve been saving diligently or have come into an unexpected windfall, deciding how to invest a significant sum of money like $50,000 takes careful consideration.
You’ve got plenty of investment options with $50,000 in capital, each with a level of risk and potential returns. Investment opportunities typically grow the more money you have.
Here are seven ways to invest $50,000, how this money can grow over time in different assets and money moves to consider before you invest.
Probability of Member receiving $1,000 is a probability of 0.026%; If you don’t make a selection in 45 days, you’ll no longer qualify for the promo. Customer must fund their account with a minimum of $50.00 to qualify. Probability percentage is subject to decrease.
Terms and conditions apply*. For 401k rollovers, existing SoFi IRA members must complete 401k rollovers via this link For SoFi members without a SoFi IRA, a SoFi IRA must first be opened, and 401k rollover must be completed utilizing Capitalize via this link. SoFi and Capitalize will charge no additional fees to process a 401(k) rollover to a SoFi IRA. SoFi is not liable for any costs incurred from the existing 401k provider for rollover. Please check with your 401k provider for any fees or costs associated with the rollover. For IRA contributions, only deposits made via ACH and cash transfer from SoFi Bank accounts are eligible for the match. Click here for the 1% Match terms and conditions.
Trade stocks, ETFs, options, futures and bonds all in one place
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Most people can’t beat the market when it comes to investing and are better off investing in ETFs, but you may choose to invest a portion of your $50,000 in individual stocks of companies.
Stocks are considered to offer the greatest potential for growth over the long term. Historically, the stock market has delivered annual returns of about 10% — 7% or so after inflation. If you’re willing to take on more risk, spend time researching companies or don’t want exposure to certain stocks that may be included in an ETF, there may be a place in your portfolio for investing in individual stocks.
Pros
Great performance over time. The average annual return of the stock market is around 10% historically. Dividend stocks provide the added benefit of income.
Variety of options. More than 4,500 companies are listed on the New York Stock Exchange and Nasdaq, from small-cap companies to large blue-chip stocks.
Fractional shares. Trade stocks for as little as $1 with many brokers.
High liquidity. Buy or sell most stocks during market hours without limitations.
Cons
Volatility. Stocks can be volatile — some more than others. If you don’t plan to hold the stock for the long term, you could end up selling for a loss.
Stock picking requires time. While you can pick stocks willy-nilly, developing a strategy and performing proper research on companies takes time and effort.
2. Simplify investing with ETFs
Hands-on investors who want to limit risk but still enjoy choosing their own investments may consider a fund-investing strategy — in particular, exchange-traded funds (ETFs). ETFs give you exposure to a basket of stocks, bonds, futures or other assets through pooled investments similar to mutual funds, but with generally lower costs. A single share of an ETF can instantly diversify your portfolio and potentially lower your risk exposure.
ETFs come in many types, but ETFs that match the moves of indexes, such as the S&P 500 or NASDAQ Composite, provide a simple way to invest and gain broad market exposure without requiring much market knowledge.
Examples of popular index ETFs include the SPDR S&P 500 Trust ETF (SPY), which tracks the performance of the S&P 500, and Invesco (QQQ). This ETF tracks the performance of the component stocks of the Nasdaq-100, an index of the largest 100 non-financial stocks listed on the Nasdaq.
Pros
Variety of investment options. Some funds only hold stocks in particular sectors, like technology and healthcare. Bond ETFs, commodity ETFs, currency ETFs and other types of ETFs are also available.
ETFs trade like stocks. Buy and sell ETFs any time during market hours.
Convenience. Instead of buying stocks individually, ETFs give you exposure to numerous securities through a single fund.
Cons
Expense ratio. A type of fund management fee, most ETFs cost less than 1% annually. But this is still a fee you must pay that doesn’t apply to individual stock picking.
Lack of control. Though you can choose the ETF, you can’t choose the individual stocks in the fund.
The IRA is a foundational investment account that offers tax benefits for saving for retirement and should be one of your primary investment accounts until you reach the contribution limit.
IRAs are versatile investment accounts in that they let you invest in everything from stocks and bonds to ETFs, options and futures, all while offering tax benefits for saving. Meanwhile, self-directed IRAs let you diversify your retirement savings with alternative assets, including real estate, gold, cryptocurrencies and pretty much every other investable asset that exists.
The best IRAs offer plentiful investment options, low costs and fees and a trading platform suitable for your experience and needs as an investor.
Pros
Tax benefits. Pay taxes on your contributions now with a traditional IRA or in retirement with a Roth IRA.
Matching contributions. While matching contributions have typically been reserved for 401(k) accounts, Robinhood offers a match of up to 3% of all contributions if you subscribe to Robinhood Gold.
Trade most assets in an IRA. Federal law permits most investments in an IRA, which gives you great flexibility in how you invest your money.
Cons
Withdrawal penalties. Withdraw your funds before you reach age 59 and a half and you’ll pay a 10% early-withdrawal penalty.
Deposit limitations. IRA contributions max out at $7,000 in 2024.
Income limitations. You cannot contribute to a Roth IRA if your modified adjusted gross income exceeds $240,000 for married couples filing jointly.
Alternative assets are those outside traditional stocks, bonds, ETFs or mutual funds and include things like real estate, private equity and fine art, among other things. In addition to the potential for outsized returns, alternative assets bring diversity to one’s portfolio. And since many alternatives offer low correlation to traditional markets, they can help reduce overall portfolio risk.
Today’s investing platforms make it incredibly easy to diversify your portfolio with alternative assets. Both Fidelity Investments and Interactive Brokers, for instance, offer precious metals investing. Meanwhile, investing app Public offers a growing list of alternative assets, including cryptocurrencies, non-fungible tokens (NFTs), fine art and collectibles.
Pros
High return potential. Alternatives carry more risk but also have the potential for strong returns.
Portfolio diversification. Diversify your portfolio beyond traditional investments, such as stocks, bonds, ETFs and mutual funds.
Generally uncorrelated to the stock market. Many alternatives move without relation to the stock market, which can help reduce portfolio risk.
Cons
May be illiquid and difficult to sell. Many alternatives have lock-up periods, which prevent you from selling for a certain time. And a lack of a secondary market can make it difficult to find a buyer for certain assets.
Can be highly volatile. Certain alternative investments can be extremely volatile. The value of certain cryptos, for instance, can change dramatically and unexpectedly.
You no longer have to buy physical property yourself to invest in real estate. Crowdfunding platforms like Fundrise, Yieldstreet, RealtyMogul and Ark7 have brought real estate investing to the masses with user-friendly platforms that let you invest in private real estate with just a few clicks. And with much less upfront capital.
These platforms typically offer fractional investments in private real estate investment trusts (REITs) and single real estate projects. REITs are companies that invest in income-producing real estate such as office buildings, shopping malls, hotels, resorts and apartment complexes, all without the burden of having to physically own and manage the property.
Pros
Earn rental income. REITs are required to distribute 90% or more of their taxable profits to shareholders in the form of dividends.(2)
Capital appreciation. Equity ownership in property lets you profit from property appreciation when the property sells.
Cons
High taxes. Depending on your tax bracket, you could pay as high as 37% for REIT’s dividend payments.
Low liquidity. Privately-held REITs inherently come with lower liquidity, so selling your investment whenever you want could be hard.
6. Invest in cryptocurrencies
Crypto is a high-risk, high-reward asset class that continues to grow in popularity. First launched in 2009, Bitcoin is the face of crypto worldwide, with a level of popularity that drove the value of its coin through the roof — from a value of $0.0009 per Bitcoin in October 2009 with the first Bitcoin transaction to a peak of over $68,000 per coin in November 2021.
Unlike just about any other asset class, crypto trades 24 hours a day, 365 days per year. And while its price has pulled back dramatically from its high, Finder’s expert panel expects Bitcoin to exceed $100,000 per coin by 2025.
Pros
Potentially high returns. The global crypto market cap is around $1.17 trillion as of August 2023, according to CoinMarketCap, which is less than half the $2.8 trillion market cap of Apple (AAPL). If cryptocurrencies become mainstream in the future, the growth potential is could be significant.
24/7 trading. Cryptocurrencies trade 24/7, meaning you can buy or sell whenever you want.
Strong market infrastructure. Lend out or stake the most popular cryptocurrencies, which lets you earn income.
Cons
Volatile. Don’t be surprised if your crypto portfolio sees major swings to the upside and down. Because the crypto market is smaller than the stock market, it can be more easily affected by large amounts of money entering and exiting the market.
Variety of risks. The crypto market is mostly unregulated, which comes with risks such as exchange collapses and scams. If you’re not using a hardware wallet or you forget your private keys, you risk losing your cryptocurrencies.
Fifty thousand dollars isn’t chump change and may be best left in the hands of a professional with expertise in various aspects of investing, especially if you don’t have the time or interest to manage your own investments. Even if you don’t want to outsource portfolio management entirely, an advisor’s knowledge can help you make informed decisions and navigate the different markets.
Financial advisors get to know you and your goals and how much risk you’re willing to take. They build a personalized, holistic financial plan tailored specifically to you. Advisors of this sort typically charge a one-time planning fee or annual management fees if they manage your portfolio on an ongoing basis. This fee is typically between 0.5% and 2%.(1)
Great for hands-off investors. Let a professional build and manage your portfolio based on your specific needs, goals and nuances of your situation.
Saves you time. Financial advisors help investors without the time or interest to manage their portfolios. Otherwise, you need to research investments yourself and stay on top of market news.
Cons
Fees can add up. You may have to pay an annual advisory fee no matter how your portfolio performs.
Reduced control. Relying on an advisor might mean you’re less involved in your own financial decisions.
How $50,000 can grow
With $50,000, you can start building serious wealth with smart decisions and enough time. Here’s how it might grow in three common investment classes.
A 7% return on stocks, based on the market’s average long-term annual return after inflation.
No additional contributions.
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 as benchmarks only and consider risk as well as return.
3 money moves to consider before you invest $50,000
Pay off your debt. If you’re paying more in interest on your debt than you will likely earn on your investments, you’re losing money. Consider paying off your debt first.
Create an emergency fund. An emergency fund can provide a cushion if you lose your primary source of income. Experts recommend saving at least three-to-six months’ worth of essential expenses.
Save for other goals. With interest rates as high as they are, now could be a good time to put aside some money for other savings goals, whether that’s a vacation, a new car or an addition on your house.
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Frequently asked questions
What should you invest $50,000 in?
What you should invest $50,000 in depends on your time frame and risk tolerance. Investors typically turn to bonds and other fixed-income products for reliable returns, while stocks can provide higher returns but with more risk.
How much interest will $50,000 earn in a year?
How much interest $50,000 earns in a year depends on where you invest the money and that investment’s rate of return. If you invest your $50,000 in a bond that earns 5.1% in yearly interest, you can expect $2,550 in interest in a year.
How can I turn $50K into more money?
While there’s no guarantee, you can typically turn $50,000 into more money by saving and investing.
How to create passive income with $50K?
One way to create passive income with $50,000 is to invest in income-producing assets, such as dividend stocks and real estate.
Kliment Dukovski was a personal finance writer at Finder, specializing in investments and cryptocurrency. He's written more than 700 articles to help readers compare the best trading platforms, understand complex investment terms and find the best credit cards for their needs. His expert commentary has been featured in such digital publications as Fox Business, MSN Money and MediaFeed. He’s also well-versed in money transfers, home loans and more — breaking down these topics into simple concepts anyone can understand. In another life, Kliment ghostwrote guides and articles on foreign exchange, stock market trading and cryptocurrencies.
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Matt Miczulski is an investments editor and market analyst at Finder. With over 450 bylines, Matt dissects and reviews brokers and investing platforms to expose perks and pain points, explores investment products and concepts and covers market news, making investing more accessible and helping readers to make informed financial decisions.
Before joining Finder in 2021, Matt covered everything from finance news and banking to debt and travel for FinanceBuzz. His expertise and analysis on investing and other financial topics has been featured on Yahoo Finance, CBS, MSN, Best Company and Consolidated Credit, among others. Matt holds a BA in history from William Paterson University.
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