Best Ways to Invest $50K: 7 Strategies to Put Your Money to Work (2024)

By any standard, $50,000 is a substantial sum to invest. However, deciding the best way to invest $50K can be overwhelming. Here are some strategies to help you make the most of your money.

Vault’s Viewpoint

• Review your investment choices and put your money where it aligns with your goals and risk tolerance.
• There are a range of investment opportunities from relatively safe to higher risk—but with potentially higher returns.
• Consider a mix of investments in line with your overall portfolio strategy.

How to Invest $50K

As you consider the best result for your $50,000, you have several choices. Carefully consider your own goals and your risk tolerance as you move forward.

1. High-Yield Cash Account

Considered one of the safest investments, a high-yield cash account can potentially keep your money safe. For example, savings and checking accounts, money market accounts and certificates of deposits (CDs) are considered cash accounts.

Money in both high-yield savings accounts and high-yield checking accounts is FDIC-insured for up to $250,000. Use the account to get a higher rate without worrying about losing the principal. You can also consider a CD ladder to protect against a lower-rate environment in the future. Money market accounts also offer a way to keep cash with flexible and accessible terms with a relatively high yield.

• Risk: Low
• Return: Low
• Who should consider it: If you’re looking to fund an emergency account or if you want accessible cash for short- to medium-term savings goals, a high-yield cash account can be a good place to put your money.

2. Tax-Advantaged Investment Account

If you have tax-advantaged investment accounts, now might be the time to top them off. With $50,000, you could potentially max out your 401(k), IRA and Health Savings Account (HSA). For many people, this amount of money is enough to top off contributions. Review the assets available in tax-advantaged investment accounts, since you might be limited to certain funds or face other restrictions.

• Risk: Low to moderate, depending on the investments chosen
• Return: Moderate, with tax benefits
• Who should consider it: For those who don’t need immediate access to their money and want to maximize their contributions for tax-advantaged returns, this can be a good choice. The money can grow over time and meet future needs.

3. Taxable Investment Account

Maybe you want to access the money sooner, or you have other goals you want to meet. A taxable investment account through a trusted broker might be a good choice. You’ll likely have access to a variety of mutual funds—including index funds—and individual stocks.

“I love using a taxable investing account to fund short-term goals like travel. It’s a great way for me to grow my travel fund consistently and then use the proceeds to take trips. You need to be aware of the potential for losses or for the consequences of capital gains taxes, but it can be a solid way to support ongoing short- to medium-term goals.”

— Miranda Marquit

Depending on your investment strategy and portfolio goals, you could choose dividend-paying investments or stocks with higher potential for returns. Just pay attention to potential capital gains taxes if you decide to sell assets down the road.

• Risk: Moderate to high, depending on the investments chosen
• Return: Moderate to high, depending on investment performance
• Who should consider it: Someone who feels on track for retirement and other goals might like the idea of putting money into a taxable investment account that’s more accessible than a tax-advantaged account.

4. Real Estate

When buying real estate, $50,000 can make a respectable down payment. If you want to house hack by purchasing a duplex, living on one side and renting out the other, you might even be eligible for an FHA loan. Additionally, $50,000 might be enough to buy into certain real estate investment clubs or take advantage of certain Real Estate Investment Trusts (REITs) that offer higher potential returns.

Depending on your goals with real estate, the leverage you’re willing to take on and the location, you might be able to turn that $50,000 into between two and four doors for rentals.

• Risk: Moderate, depending on the market
• Return: Moderate to high, depending on the market and cash flow
• Who should consider it: If you don’t mind having your money tied up for a moderate to long period, and you like the idea of returns from real estate, this might be a good choice. Someone interested in owning rentals and receiving cash flow could use $50,000 to get started.

5. I-Bonds

U.S. Treasury Bonds linked to inflation can be a good choice for those who hope to have a safe investment with a heightened return—at least for a few months at a time. I bonds work by having a fixed rate, which remains the same for the term of the bond, and by also having a rate tied to inflation. The variable portion of the I bond rate changes every six months—so as inflation falls, so does your yield.

There are restrictions on I bonds, though. For example, you can only invest up to $10,000 per Social Security number, and you must hold them for at least 12 months. Further, you lose some of your interest if you cash them in before five years.

• Risk: Low
• Return: Low to moderate, depending on the inflation environment
• Who should consider it: Those hoping to have inflation-protected yet low-risk assets in their portfolios can include I bonds when trying to decide how to invest $50,000. If there are others in your household, you can divide up the $50,000. For example, investing $10,000 on your behalf and $10,000 for your partner.

6. Precious Metals

Some people like the idea of having a tangible—or “real life”—asset. Precious metals, especially gold and silver bars and coins, can be popular among people who worry about a financial system catastrophe. Consider the premiums that might involved with precious metals investing. You also need to have a place to store your precious metals if you aren’t planning to pay for storage elsewhere.

• Risk: Low to moderate
• Return: Moderate, depending on market factors
• Who should consider it: If you like the idea of adding diversity to your portfolio with tangible assets and are willing to pay for or provide storage, this can be one way to potentially protect against inflation or future market shocks.

7. Alternative Assets

Alternative assets, ranging from cryptocurrencies to collectibles, might be intriguing. In some cases, you can buy directly from dealers. In other cases, you might be able to purchase “fractional shares” of things like artwork and collectibles through websites.

Depending on the situation, you might need to agree to keep your money “locked up” for a certain period of time. Additionally, depending on the asset, there might be higher risks, including the risk of a platform’s failure.

• Risk: High
• Return: Moderate to high, depending on market performance
• Who should consider it: For those who are already on track to reach their long-term financial objectives, putting some money into alternative assets can be attractive. It provides a way to potentially supercharge your gains. However, due to the often volatile nature of many alternative assets, it’s important to understand the risks and make sure your financial and emotional risk tolerance can handle these investments.

Investing $50,000 in Multiple Assets

You don’t have to choose just one investment for your $50,000. If you’re using a specific asset allocation as part of your portfolio strategy, consider using that as a guide. For example, if your portfolio is 70% stocks, 15% bonds, 10% cash and 5% alternatives, you might decide to divvy up your $50,000 in a similar manner.

Another consideration is using that $50,000 to invest in your quality of life. You might not see the same level of financial return immediately, but you could see non-financial dividends. Some examples include:

• Paying down debt: If you’re dealing with high-interest debt, using some or all of your $50,000 to reduce the load can make sense. Paying down debt comes with a “guaranteed return.” Once you have your debt under control, you’re paying less in interest and positioning yourself to start earning interest.
• Continuing education: Perhaps you want to get a degree, training or certificate. This might be because of your value of lifelong learning and a sense of accomplishment, or it could potentially lead to a higher income later.
• Home improvements: Even if you don’t see a dollar-for-dollar return for renovations, they can upgrade how you feel in your home. Putting in that addition or overhauling outdated decor can be an investment in your living space—even if you don’t see financial returns.
• Self-care: You could take a portion of your $50,000 and take a vacation with your family. This offers relaxation, as well as potentially improving your family relationships. You might also get something to treat yourself or just take some time off work to reset.
• Charity: Local charities often do good work in their communities. If you want to have a positive impact, giving to local causes can help you feel good and contribute to a healthier and safer place to live.

When deciding how to invest $50,000—no matter where you put it—think about your current situation and where you’re likely to get the most benefit. Consider your values and goals, then make a plan for using your financial resources in a way that resonates with you.