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How to Invest $250k and Generate a Solid Return

Saving up to $250,000 for investment purposes is a milestone achievement. It's pure proof that you're on the right track to a life full of riches. Sadly, you still have a long way to go, and a wrong turn can leave you worse than before.

So now that you've decided to invest such a big amount, you'll need to devise a concrete investment plan that'll yield profits in the long term.

Here, we'll look into some of the best investment plans and some major tips on how to invest $250k. Before we continue, it's best you know that before making any investment, especially with such a large amount; you'll need to factor in your risk tolerance and capacity. Reflecting on these factors is important and the bedrock of any successful investment.

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How to Invest $250k and Generate a Solid Return

As the popular saying goes, "Never put all your eggs in a single basket." It's not advisable to invest your entire money in a single venture. Spread the investment out; not only is it risk contingent, but it also gives room for exposure and helps you develop different experiences that can aid financial growth.

Here are some of the various ways you can invest $250k.

●     Invest in Real Estate

If you're searching for the best way to invest 200k for passive income, real estate is your best bet. There are different aspects of real estate investing to choose from, and you can select the one that suits your goals.

You can choose to buy a property in an "up and coming" city, and as the city gains prominence, so does your property and investment. $250k won't get you a decent property in any of the mega cities like Los Angeles or Miami. But with good research, you can find cities with good prospects and invest early.

Also, you can buy properties in areas populated by students or young professionals and rent them out. Their monthly rent payment can serve as payment for your mortgage and serve as a source of passive income.

If you don't want to involve yourself in the hassles of being a landlord, you can register with professional real estate platforms like Real Estate Investment Trusts (REITs). You can also opt for real estate syndication, a passive way of making real money in real estate.

Lastly, real estate isn't the fastest way to turn a 250k investment into millions. It's a slow, steady process, and with adequate time, you'll surely be rewarded. So if you're looking for how to invest 200k for monthly income, or how to invest 200k in property, go into real estate.

●     Invest in Stocks

Stocks and bonds are probably the most common forms of investment. They are the bases of most tax-advantaged retirement plans like SEP IRA, Solo 401(k), and 401(k). 

However, if you're looking for long-term wealth, you'll have to expand your thinking beyond tax-advantaged retirement plans. For starters, you can try learning stocks trading.

Though people like to speak about the complexity of trading stocks, your success is mostly determined by how well you do your homework. Thoroughly research a business before buying their stocks and if all this sounds like something you don't have time for, consider using a brokerage account.

Sadly, when you use brokerage accounts, you won't be getting the tax advantages that are common with retirement plans. But there are other benefits of using a brokerage that’ll entice you.

For example, you can invest in a wide variety of stocks and even ETFs. Also, brokerage accounts offer more liquidity.

Lastly, retirement plans have penalties for any withdrawal made before the retirement age, but with brokerage accounts, you can withdraw whenever you like, without worrying about any penalty.

However, you'll have to consider capital gains taxes when you're doing this. If you're looking for how to invest 250k without much stress, stocks and bonds are perfect for you.

●     Invest in Cryptocurrency

Some years back, the concept of cryptocurrency was very vague, and many believed it was one of those scam programs that'll only last a short while.

Fast forward to 2022, and most of the world's major industries are now finding ways to incorporate cryptocurrency into their system. But can you blame them? The cryptocurrency market industry hit an all-time high of $2.43 trillion in 2021. Everybody wants a piece of that large cake and you're not exempted from having a share.

Coins like Bitcoin, Ethereum, and Solana are seeing solid growth yearly. The price of one Bitcoin was $13,737.03 in November 2020, and it hit an all-time high of $69,045.00 in November 2021. That's roughly a 500% increase in less than a year.

You can buy these solid coins and hold them for a long time; their prices might increase and bring profit. All you need is a good cryptocurrency platform that allows you to buy and sell coins, register with them, and you're set to go.

However, it's good you know that while cryptocurrency might be an answer to how to turn $250k into $1 million in the short term, it isn't necessarily the best option.

The cryptocurrency market is insanely volatile. It's a very risky investment, and you might lose everything you have. In May 2022, the UST/Luna crash cost investors a combined $40 billion. Cryptocurrency might be the best way to invest 200k short-term, but you could lose everything in an hour.

Other Ways to Invest $250k

If you didn't find what you were looking for in the above list, here are some other investment opportunities you could try:

  • You could buy a business and build it into something that'll give you long-term passive income
  • You could invest in gold. It's one of the safest forms of investment, and since most investors usually turn to it when the economy is down, you might be able to make money off it.
  • If you own a business or are self-employed, you could try to invest in a solo 401(k). It comes with tax advantages and has features not common in the 401(k)

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The Bottom Line

If you've made it to the stage where you want to invest $250k, you have every right to be proud of yourself; you've done well.

However, there's more work to be done, and you'll have to invest properly so you don't lose your money.

We've briefed you on how to invest 250k in different financial sectors. You can invest in real estate, or you could buy stocks, a business, or cryptocurrency. Whichever one you choose, always factor in your life goals, age, and risk tolerance before you make a decision.

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