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How To Invest 200k (…And Become A Millionaire FAST!)

$200,000 is quite a bit of money. If you’ve got a windfall or have seen a huge boost in income like this, then you may be ready to start investing. But what’s the best way to invest such a large amount of cash? Here’s how to invest 200k…and likely become a millionaire in the process!

How To Invest 200k In Real Estate

$200,000 in certain markets can buy you a whole house, condo, townhome, and even land. So if you’re going to use it to invest in real estate, look into markets where you can purchase properties outright, or be able to comfortably manage a mortgage if you don’t have a tenant.

Another way you can invest in real estate is via commercial properties. While $200k won’t get you as far, it’s a great way to diversify your portfolio.

Related: How to Invest in Real Estate Without Becoming a Landlord

Is 200K enough to invest in real estate?

Absolutely! It will depend on your area, if you want to get into residential or commercial, and if you’re willing to invest the full amount. But, it’s entirely possible to do so.

Related: The BEST Form of Passive Income in 2022

Want to know how to invest 200k? Here's some great advice!How To Invest 200k In Passive Income Opportunities

Passive income will help you earn money for years to come if you time it right. But what is it exactly?

Passive income is the earnings that you earn after an initial investment or time commitment. This includes earnings from…

  • a rental property,
  • stocks with dividends,
  • turn-key business,
  • crowdfunding, and
  • online business (like drop-shipping with Spocket, our affiliate).

And that’s just to name a few different options!

So, when you think about passive income, know that it’s money that you earn every month, even after you’ve stopped working on the project. In other words, you won’t have to consistently trade your time for money.

When it comes to investing in passive income opportunities, you can get started with multiple options when you have $200,000. So it will really be up to you on how much you want to invest and where you want to earn your passive income from.

Related: Passive Income Examples (Increase Earnings WITHOUT More Work)

Is 200K in investments good?

Absolutely! Investing 200k and giving it 20 years to grow can easily turn it into almost $1 million dollars. And that’s being conservative! If you invest in real estate, high-risk investments that earn big returns, or passive income options, you may be able to earn more than that.

Related: How Much Should I Have In My 401k? (At Age 20, 30, 40, 50, and 60!)

Can you retire on 200k?

Yes and no. Really, it depends on how much you spend a year, if you have any debt, where you live, and other factors.

But, it IS possible to retire on 200k if you’re smart and careful with your investments. In fact, you could potentially retire for upwards of 20 years. And, if you’re able to make your money stretch with other payments, like passive income or social security, those dollars could go even farther.

Related: How Long Can You Live Off 200k? (It Might Be Longer Than You Think!!)

What is the safest investment with the highest return?

It’s important to note that no one investment is completely safe or guaranteed to earn you a high return. That’s why it’s crucial to diversify your portfolio income.

This will help you keep more of your money, avoid possible dips in the stock market, real estate, and more, and also give you more of a safety net if you need to retire early.

If you’re looking for some safer investments that have seen high returns in the last 20 years or so, try out:

  • Government Bonds
  • Corporate Bonds
  • REITs
  • Preferred Stocks

These are considered safer investments because they don’t tend to “ride the wave” like stocks and investing in real estate do. Instead, they’ve been a bit more steady over the course of the American economy.

Related: Keep Investing Simple: The Secret to Wealth

simple ways to manage your moneyWhat is the interest on $200,000?

The average annual rate of return is about 10% if you’re invested in the stock market. So this would mean that your initial $200k investment would make upwards of $20,000 a year.

If you want to be a bit more conservative, experts say to plan for around 6%-7%. So that would be about $12,000 to $14,000 a year earned on $200k.

However, you can grow this even more by continuing to contribute to your investments monthly. While $200,000 isn’t chump change and will grow over time, it can always get more help if you have the money to spare.

How To Invest 200k To Make $1 Million

Now that you know $200k can make you a millionaire, let’s talk about the details behind it so you can make it a reality!

Know What Your Finances Look Like

Before you invest that $200,000, think about where you are in your finances right now.

  • Do you have an emergency fund in place?
  • Are you overspending?
  • Do you have debt that is high in interest or won’t be paid off with your regular income?

These are all of the questions you need to ask yourself.

And then, you need to think about whether your $200k would be better put to use somewhere else. This is not to say you can’t invest any of it. But if you have high-interest debt that’s costing you thousands of dollars each month, it would be better to pay that off and THEN start investing with the money you’re saving!

However, if you look at your financial standing, and realize that you don’t really need to do or buy anything with the money (nope, wants like a brand new car don’t count!), then yes, go ahead and invest it.

Related: What Is A Reverse Budget? (And…Do You Need One?)

Raining MoneyDecide On Your Goals

  • Are you looking to retire early?
  • Want to have a home paid for in cash and earn you money each month?
  • Want to be able to afford health care when it’s time for you to retire?

It’s important to know what your goals now and in the future are.

Sure, these can change year to year, especially if you have life events happen like marriage, a baby, or even a cross-country move. But essentially, you want to invest your money into things that make sense for you and your lifestyle.

For example, if your goal is to earn money each month, look into passive income. But, if you want to retire with a fat wad of cash, you may want to invest in riskier stocks or higher rate of return options.

Also, remember that YOUR goals aren’t going to be the same as someone else. It’s important to note what you want out of life and how you expect to retire, not what others want for you.

Related: 3 Questions That Can Help You Prioritize Financial Goals

Start Investing NOW (If You Haven’t Already!)

Okay, let’s say you don’t have high-interest debt, have a fairly stable income, and are able to take care of your bills. But, maybe you haven’t started investing, or barely invest month to month. If that’s the case, why are you just holding on to $200k? Invest it!

Here’s the thing… the sooner you start to invest, the more chance your money has to grow. Investing earlier in life can earn you an extra few thousand to hundreds of thousands in interest alone.

Now, this is not to say that investing later in life is bad. In fact, there are many people who were able to retire easily, even though they started investing later in life. But, the earlier you start, the better your chance to earn more money.

Related: How to Invest Money In Your 20s (And Become a Deca-Millionaire!!)

things you should be saving forAutomate, Automate, Automate

You don’t need to have a financial advisor in order to invest your $200k properly. Actually, almost all of the investment information you need can already be found online (for free!). And, it’s possible to manage your money on your own with robo-advisors like Betterment and Ellevest.

And of course, even. if you invest 200k, you can continue to invest month-to-month. The easiest way to do this is to automate your investments and have them taken out of your check or bank account each month. You can’t miss what you don’t see!

Related: 5 Ways To Manage Money Better In 2022 (Are You Doing These??)

Make Sure Your Investments Are Diversified

Only investing in one type of niche, industry, or sector can be devastating to your finances if that market dips or goes kaput.

Instead, diversify your investments. Look into passive investments, real estate (both residential and commercial, that’s diversified too!), and even different types of stocks. That way, should anything happen to some of your money, it won’t happen to all of it, and you can rest a little easier.

Investing $200k To Become A Millionaire

As you can see, it can be easy (and pain-free) to become a millionaire with just $200,000. And, this isn’t to say that you have to invest that $200k at one time either! Sure, a windfall would be great, but that doesn’t always happen and some people have to take their investing one step at a time.

But, even if you invest $200k over time, you can still be a millionaire if you invest it wisely. No matter what. It’s totally possible!

Grow Rich Investing Money

AUTHOR Kimberly Studdard

Kim Studdard is a strategy consultant and course launching expert. When she isn't spending time with her daughter and husband, or crying over This Is Us, you'll find her teaching other mompreneurs how to scale their business without scaling their workload.

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