What to do with 25000 dollars | best ways to invest $25,000 in short-term – Nowadays, people first think about how they can earn money by investing their money. But as they want to grow their money they also fear that they lost their money. That’s why they want to know about the safest ways to invest their money. When someone has the amount of 25000 dollars or more than this or less than this, they think why they keep it with them, can they invest that much amount or get some benefits from it, but they one question in front of them that is “how”.
What they can do with that much amount that this amount will give them better results in the future or did not need to do work in their elderly years. If you also have a big amount like 25k dollars and want to invest it or want to know what you can do with that amount, then you can read this article. Here you will find many amazing ways that are safe for investing your money as well as using it in the proper way for the future. So, read this article and get helpful information from there.
- 1 17 Smart Ways to Invest $25,000 Safely and Confidently
- 2 Best Ways to Invest 25K safely (short-term investment options with high returns in the USA)
- 2.1 Try Portfolio Management
- 2.2 Index funds short-term investment option with high returns
- 2.3 Max out your retirement accounts
- 2.4 High-yield savings account
- 2.5 Invest in yourself
- 2.6 Donate to charity
- 2.7 Treasury bonds
- 2.8 Invest in art
- 2.9 Pay off your debt
- 2.10 Mutual funds
- 2.11 Annuities
- 2.12 Real estate
- 2.13 Peer to Peer lending
- 2.14 Start a business
- 2.15 Invest in an emergency fund
- 2.16 Invest using a Robo advisor
- 2.17 Invest in cryptocurrency
- 3 Where to invest $25000
- 4 Invest $25000 in stock market
- 4.1 Plain Old Taxable Brokerage Account
- 4.2 REITs
- 4.3 401 (k)
- 4.4 Health Savings Accounts (HSAs)
- 4.5 Syndications
- 4.6 Angel Invest
- 4.7 Roth IRA & Backdoor Roth IRA
- 4.8 Cryptocurrency & Bitcoin
- 4.9 Your Children’s Education – a 529 Plan
- 4.10 Buy Rental Property
- 4.11 Start a Blog
- 4.12 Real Estate Crowdfunding
- 4.13 Invest for Charity – Donor-Advised Fund
- 4.14 Your Own Education
- 5 Things to Keep in Mind Before You Invest $25,000
- 6 Frequently Asked Questions
- 7 Where should I put $25000?
- 8 How can I double my money in the short term?
- 9 What should I invest in right now for the short term?
- 10 What can I do with an extra 25000?
- 11 Conclusion
17 Smart Ways to Invest $25,000 Safely and Confidently
If you want to earn money by investing $25,000 then you are on the right platform. This document is all about how to invest $25,000 safely and without any type of risk. So, if you genuinely want to earn money in smart ways then go through this document fully means till the end as here all the simple and best ways of investing $25,000 are described in quite an easy language.
Because if you are reading this article or document, then it probably means you are either working and looking actively towards amassing wealth to the tune of 25k and especially by looking smart ways or you are hoping that you may win a lottery from somewhere at any time which is going to help you in dealing with your financial issues.Either way, it’s a very good and smart move to learn how to invest $25,000 smartly and you must not spend this huge amount without any investigation and further knowledge as it hits your account badly. The reason is that $25,000 will not guarantee financial security unless the money is invested in ways that allow it to compound.
So, it is very important for everyone out there who is reading this article that you have to invest $25,000 with full caution as in the future you will be safe from any kind of unavoidable risk.
Best Ways to Invest 25K safely (short-term investment options with high returns in the USA)
Let’s look here, at the different, safe, and best ways to invest $25k money that will be going to help you in fulfilling your needs and future dreams. So, before that $25,000 burns a hole in your bank account, let’s take a look at investing it.
Try Portfolio Management
Portfolio management is also one of the good options for investing money in a less risky way. If you are having $25,000 in liquid form that is cash and with that amount, you are considered a high net worth client or individual. So, as a high-net-worth client, you are eligible to get various benefits including personal meetings and personal touch. You are having $25,000 which is a good amount of capital and you can use this personal capital for securing your future just by investing it in good securities.
There are various methods available in the market where you can invest your capital but the best two options are explained here in this document. The first method is the free planning tool, this tool collects information from your financial accounts and helps you in making improvements to increase the return from your invested amount. This first option is considered as best for everyone out there. There is either no issue regarding your bank that where is your bank and in which bank you are having an account or no issue regarding the amount of investment that you made. You can learn more about this system and method through the Personal Capital review. This app contains a large number of reviews that will surely help in getting a good amount of knowledge.
The second option for investing your capital is by using asset management services. If you are using these asset management services then you have to fulfill some basic conditions of this method. The starting point is that you have to open an account with a minimum size of $100,000. Once you are done with this account opening step then you will get help from asset management services in setting your goals for future investments for your money and it primarily covers the time of your retirement. If you invest your money here and make up your mind to invest with asset management services then the app will invest your money based on the Modern Portfolio Theory (MPT) which ensures true diversification of the amount in different securities. This system will also help you with one more step which taxloss is harvesting. This system will optimize your tax burden and make your portfolio of different securities tax-efficient.
According to the company’s tests, these securities will outperform the S&P 500 means they perform more than 1.5% in a year with less volatility. Overall, it is a safe and less risky bet. So, you can choose this method too for investing your $25,000. You can open an Account at Personal Capital and this will help you in growing your $25,000 safely. Therefore, portfolio management is very important to eliminate risk to some extent.
Index funds short-term investment option with high returns
Index funds are a good short-term investment option with high returns and best for investing your $25k. Investing in Index Funds is like investing in the stock market but here you are free from that much risk which is present in the stock market. The risk in Index funds is low as compared to the stock market. So, the risk of investing in Index funds is very minimal yet the benefits are either massive or very high. The trick that applies here in these index funds is diversification. Just by diversifying your stocks with the help of the largest companies that are present in the market by using your index fund you can earn a good amount.
According to Bankrate, the best index funds to own this year are as follows:
- Fidelity ZERO Large Cap Index (FNILX)
- Vanguard S&P 500 ETF (VOO)
- SPDR S&P 500 ETF Trust (SPY)
- iShares Core S&P 500 ETF (IVV)
- Schwab S&P 500 Index Fund (SWPPX)
These index funds help in tracking the S&P 500 Index Fund and offer you a way to invest your $25,000 in stocks of the S&P 500 at a low cost, one more and the best thing here is that you have the opportunity of enjoying diversification and low risk at the same time.
Max out your retirement accounts
You can earn enough through these retirement accounts as well. Here, you can invest in index funds as well as mutual funds in your retirement accounts and can wait till they reach their maximum limits means they shoot for the maximum.
Where you are employed and if your employer offers a 401k that matches employees’ contributions, and you are not from that category means you aren’t currently contributing enough to earn that match, then you have an option. You can use your extra 25k as an investment that you already have and by using this you can free up some space from your budget.
The other option in the retirement scheme is that you can contribute to a Roth IRA or traditional IRA. These two retirement accounts do have annual contribution limits of $6,000 which are analyzed in 2021 and this limit may change for those who are at the age of 50 or more than that then the limit is $7,000. You can pad these retirement accounts to help prepare yourself for retirement down the road. Your retirement accounts commonly invest in index funds and ETFs, mutual funds, and are low-risk investments because your investments are diversified.
High-yield savings account
A high-yield savings account is also one of the best ways to invest your 25k. This account is much more profitable than a normal savings account. So if you want to earn a good amount of interest then open your high-yield saving account. In this system, your money may sit in the accounts and accrue some interest until you are ready to invest your earned income in bigger and more profitable ventures.
After many types of research, most of the experts come to the common recommendation that opens your high yield saving account with Axos Bank’s High Yield Savings. Here, in this bank, you may be able to earn a very impressive percentage yield that is up to 0.61% annually which is an APY means that is 6X of the national average. The biggest advantage here is you don’t have to bear any monthly maintenance fees means monthly maintenance fees are fully zero and there is no minimum balance requirement for the account. As you are looking for ways to invest your $25k, here with your $25k balance, you will surely earn $153 in a year. If you compare this to $25 only (national average) then it’s a really good amount of interest.
Invest in yourself
Investing in you is one of the best options or investments that you could ever make. You can invest in yourself through various options and in different forms like pursuing a course creative project, enrolling in a course of nurturing talent, or learning a new skill in any field in which you are interested. Excluding all these, you can pick up a new side hustle to make $1,000 fast by utilizing your free time.
While not everyone out there feels good and is not likely to invest $25,000 in self-grooming but if you put this amount as an investment on yourself then you may yield a high return with a short-term investment for your future. When you put your wellness first, your energy and production will increase at work which generates better results and more revenue overall.
Donate to charity
Donating to charity is also one of the best ways to invest if you are competent enough to make money easily then charity is a good option for investments. Investing 25k in charity is to make an impact in the lives of less fortunate people out there. Investors who are into impact investing then they will get tax deductions easily which is a very good advantage. Mostly all charitable organizations qualify for charitable contribution deductions.
If you are going to itemize your deductions then you have to deduct charitable contributions that you have made from your money or property to the qualified organizations. So by doing this, you may deduct up to 50 percent of your adjusted gross income, but in some cases, this percentage is not fixed to 50 percent it may change to 20 percent or 30 percent according to the circumstances and only these limitations apply in some cases
Treasury bonds can be an excellent investment for those who are looking for safety and a fixed rate of interest that is paid semi-annually means until the bonds mature. There are various kinds of treasury bonds available in the market and the best four treasury bonds are as follows:
- Treasury bills (or T-bills): Short-term debt securities that mature in less than one year. Though T-bills are sold with a wide range of maturities, the most common terms are for four, eight, 13, 26, and 52 weeks.
- Treasury notes (or T-notes): Intermediate-term debt securities that mature in two, three, five, seven, and 10 years.
- Treasury bonds (or T-bonds): Long-term debt securities that mature between 10 and 30 years.
- Treasury Inflation-Protected Securities (or TIPS): Another type of Treasury bond, adjusted over time to keep up with inflation.
So, after all these four types and their features you can evaluate their performance easily. Overall, treasury bonds play an important and very strong role in portfolio asset allocation because it provides steady returns and also helps investors in offsetting the volatility that is present in the stock market. You can purchase Treasury bonds directly and easily from the Treasury Department through its website, Treasury direct, or any brokerage account. So, this option also works well for investment purposes of $25k. You can roll your eyes over this as well before choosing any other option.
Invest in art
Investing in art is also considered the best option for making investments. The plain and simple art did better and offers better returns as compared to stocks. This say is by the data for 2020. While you all know 2020 was a very difficult year for everyone due to the pandemic. The year 2020 was sharply volatile for most parts of the public market, the art market in 2020 looked remarkably similar to the previous years.
According to the data, contemporary art has offered an annual return of 14% over the last 25 years, as of December 2020, versus a 9.5% annual return from the S&P 500. These percentages are recorded and mentioned here by the Citi Global Art Market chart.
With these advantages in mind, Masterworks has become the first company to allow investors to buy shares of great masterpieces by artists like Picasso, Monet, and Warhol. This is a great step that is only done by Masterworks. Before this, for too long, access to these blue-chip art investments has been limited to the ultra-rich people and only connected to them.
Now, it is not going like this for long as through fractional ownership, Masterworks has opened the door to top-tier, blue-chip art investments for everyone interested in art and who wants to invest in art. So, if you are also from the category of people who love artwork then this will be your cup of tea and give this method a try.
Pay off your debt
Pay off your debt is one the best and easiest ways to earn and save money as it consists of the high amount of interest charges which is sometimes going to trouble everyone in the coming future because it is not easy to pay that much amount of interest for those who are taking debt from somewhere. It may sound odd but paying off your debt is the first and biggest investment that you can make with your $25,000 which lies in your bank account. If you pay back your debt amount then it is easy for you to survive with ease shortly as you will not have to pay any interest amount which grows with time.
So, you all should know about this method (paying off high-interest debt) as this is the secret to success and mode of saving money. It is surely obvious that saving money and spending less money is very important to secure your future but getting out of debt is also a worthy goal to save money, especially from the risk as debts contact a high level of risk. Before you make up your mind about paying off your debt by utilizing the $25,000 that lies in your bank account, make sure that you will pay off your highest interest rate debt. In many cases, this is going to be the credit card interest rates.
According to the latest reports, the average credit card interest rate is 17.98%, this rate is only for new users and the rates for the existing users and accounts are different which 14.58% is. While the average return of the stock markets for the 10 years is 9.2%, this percentage is by the Goldman Sachs data which contains the data for the last 140 years.
So, after knowing all the facts and figures if you are ready to pick this method for the investment of $25,000 then this is a good option but before making up your mind you must have to look over the other methods too that are explained here in this document. So, let’s move on to the next method.
Another way to invest your $25,000 in the stock market is through mutual funds. Mutual funds are also a very good option to earn money from the investment. A mutual fund is an investment vehicle that holds a much-diversified portfolio that includes stocks, bonds, or other related securities. This is also considered the best way to invest 10,000 in the short term.
Since here in the mutual funds, the portfolio of securities is very diversified means they hold many different kinds of securities, this makes it a very attractive investment option for someone who has $25,000 and wants to invest it for further future growth. There are various benefits available for investing your money in a mutual fund instead of individual stocks including diversification, convenience, and lower costs. So, these benefits indicate that it will turn out good for everyone as compared to individual stocks.
According to Investopedia, the top 5 biggest mutual funds on the stock exchange are:
- Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX)
- Fidelity 500 Index Fund (FXAIX)
- Vanguard Institutional Index Mutual Fund (VINIX)
- Fidelity Government Cash Reserves (FDRXX)
- Vanguard Federal Money Market Fund (VMFXX)
Some people may wonder and have questions in their mind that how mutual funds are different than index funds? So, here is the answer, An index fund only seeks market average returns which are also known as a safe return and active mutual funds have fund managers that always try to find a situation where securities outperform the market. This means that the fees for active mutual funds are much higher than index funds. Mutual funds offer less predictable returns. So, if you want to play safe then you may go for index funds and if you have a nature to take dares regarding risks in the stock market then go for mutual funds.
An annuity is a good option for retired persons or only work well during retirement as annuities are a low-yielding investment that could pay as less as 3% on your capital. So, it is considered the best way to supplement your income during retirement. Annuities are considered the best short-term investment plans with high returns in the USA.
Annuities can be a smart option as well since it provides regular payments, tax benefits, and a potential death benefit. In this system, it contains one more big advantage your capital is kept safe here and your returns are guaranteed. So, it is a risk-free method. Therefore, if you want to play save then go for it.
Real estate is one of the best methods to invest in as it offers the highest returns as compared to other methods. According to one joint study, this is performed by the University of California and the German central bank. With this study, they found that over the last 145 years, real estate is the one that offered the highest amount of return on your investments and assets of any class. One more thing that is even better, it did it with far less volatility as compared to stocks. Stock is more volatile than real estate so, it is the best place to invest money right now.
So, this study tells us that real estate is one of the easiest and best ways to grow your money. So, start investing in real estate today. There is a one-person named, Robert Kiyosaki, who is the author of ‘Rich Dad Poor Dad. He is the one who learned the strategy of growing his money quickly just by making down payments for the rental properties and after this, he gained a lot more profit by selling the property at a higher price. You can also adopt this method as this method offers a higher amount of profit.
One another very popular way to invest in real estate is that you only have to buy a property and then you have to rent it out. Here, you have several options of companies from which you can rent your property easily. The best company for this resting system is ‘Arrived’. In this method, due to the changes in inflation rates, renting amount that you earn also changes. For example, if the inflation rate is increasing, then rents will also go up but your mortgage payments stay the same. This directly increases your cash flow and your rental yield as an investor in properties.
There is one more option in real estate; you could also invest your 25k in raw lands. You can do this with the companies like AcreTrader. There is one major advantage of investing in land is that it is a more profitable venture because of one key reason: the land is scarce and its demand will always exceed its supply. So, you can also give this option a try to earn from investing.
Another option to invest in real estate is a REIT. REIT stands for a real estate investment trust. There are various real estate investment trusts available in the market and one of them is Fundrise. Fundrise is one of the best and first investment platforms that create a very simple and low-cost way for everyone out there or users to access real estate with historically consistent and exceptional returns. So, if you want to earn a good return with low risk then you can invest your $25,000 through Fundrise as it will help you in go way longer. Here, you can consistently make 8.7% – 12.4% from historical returns. This percentage means you can earn a profit of $3,100 for your $25,000 with this Fundrise. So, this method also sounds good and if you want to earn something good then give it a try.
Peer to Peer lending
Peer to Peer lending is a way to make a direct impact on the lives of people. As the name suggests, you only have to offer your money for lending purposes to others and the whole method is very simple and direct to understand. The working of this system includes, you have to sign up on a platform like LendingClub or Prosper, and then you have to start giving loans to the peers who registered on the platform. Here, you can easily diversify your risk by investing in different peers. You can buy thousands of different loans to spread out risks and earn profit in the form of interest. This method also works well for many investors. This method is best for the short term investment of 3 months.
Start a business
Many of you who are reading this document find the best way to invest $25k then if you are interested in doing business then give it a start because through businesses you can earn a sufficient amount of money. So, invest your 25k in that promising business venture that you put back on the burner because of lack of money. If the business you choose is a high-risk business then before investing your valuable 25k into it conduct a good amount of research according to your prospect, and if needed then seek expert advice. When you feel satisfied with the outcome of your research then develop a solid business plan and give it a start.
Of course, the amount of money that you need to start your business fully depends on your business model and industry. However, a 2009 study conducted by the Ewing Marion Kauffman Foundation puts the average cost of starting a business is around $25,000, which means you have no money left with you for other investments if you are investing the full $25k in your business.
Alternatively, excluding the option of investing $25k, if you want to start your business with no money might initially seem like a far-fetched idea, but it’s not impossible. To get sufficient money for starting your business you can even have an option to take a personal loan to start a business but this is possible in n certain situations. So, here the bottom line is that nothing is stopping you from launching a business. The only thing that you need here is full motivation and dedication toward starting a business.
Invest in an emergency fund
Investing in emergency funds is one of the secure ways of making investments as it yields a large number of benefits to you in your coming future. It is considered the wise way because it will work as a shield and protect you from unpleasant surprises. It is best for the short-term investment of 3 months.
As you may have guessed, there are so many ways to invest $25k with confidence and without any risk. You only have to choose the right option which works well and works in your favor. You might choose one particular method or you might choose the option of diversification. Before investing, you have to keep one thing in your mind you can offset inflation with your investment and this will increase your returns as well.
Invest using a Robo advisor
Robo advisor is also turned into the best platform for investment. There are a large number of users available out there who are currently using this platform for their investments. This platform is based on the concept of diversification which means the classification of your investment into different securities. In simple words, don’t put all your eggs in one basket.This is also considered the best short-term investment plans for 6 months. When you are going to choose this platform for investing your $25k then you have an option of tax-loss harvesting which will help you with capital gain taxes. It also focuses on low fees and overall generates the best performance. There are several Robo advisors available in the market from which you can get help. The best Robo advisors are as follows:
- Betterment: overall, this is the best Robo advisor.
- Acorns: this one is good from the point of the fee.
- Blooom: this one is considered best for 401k management
- Wealthfront: best for DIY financial planning
Ultimately, some investors majorly choose two platforms from the above-mentioned platforms for their investments. These platforms are Betterment and Acorns. These platforms are the pioneers in the Robo-advising space and these platforms are very user-friendly and take care of their needs. If you compare these two platforms then you may come to know that Betterment uses a tax-loss harvesting system to help maximize returns on the one hand and reduce taxable income on the second hand but these advantages are not available with Acorns.
So, after knowing this entire thing, if you want to invest your $10,000 by utilizing a hand-free approach with goal-based planning and automated investing tools then the best option is Betterment rather than Acorns.
Betterment provides an automatic portfolio management system and only charges 0.25% every year. This amount of percentage is very reasonable as compared to other Robo-advisors management. The fees of other advisors are greater than this. One more thing is that there is no other platform available that offers this much value to its customers as Betterment did.
Some investors opted for DCA which stands for dollar-cost average into the market using Betterment instead of making one big lump sum investment (would be unsettling if the market tanked).
In addition to a standard taxable account option, those who want to save money for the long term then they should check out Betterments retirement accounts. They also have to check a traditional individual retirement accounts IRA choice. These two options Roth IRA and a SEP IRA are considered as best for small business owners. So, small business owners can choose among these two options.
Overall, the Robo-advisor is a smart and less risky way to invest any amount with ease. In fact, according to the data, since 1928, the S&P 500 (a collection of the 500 largest stocks in the USA) has reported averaged and roughly 7% returns in a year for investments. This percentage is even after adjusting all the inflation gaps which is a good return. So, if you want to earn that much return then give this option a try.
Invest in cryptocurrency
The key for every type of investment is the diversification among securities that you choose for your portfolio. Investing in cryptocurrency is one of the newest and most exciting asset classes for investments that is available to investors in the market. This is the best place to invest money right now.
As you all know, Bitcoin is one of the world’s largest crypto markets by market cap and has fallen half of its value since it is hitting a high record. There are various cryptocurrency apps are available in the market through which you can invest in it. According to some experts, the best and most trusted app for investing in crypto is Coinbase. Coinbase is one of the largest platforms in the whole world. It is one of the most established cryptocurrency exchanges in the United States.
According to the research, over 73 million people and businesses trust this Coinbase platform to buy, sell and manage crypto investments. Most of the investors prefer using Coinbase as it includes some other benefits as well like it links up your budget planners such as Mint, Personal Capital, and even Fidelity.
For those who are not interested in buying digital currencies like Bitcoin and Ethereum as these investing platforms require a high level of knowledge and sometimes it creates a hurdle for investors. So for those, there are dozens of ways to score free Bitcoin available in the market. You can explore yourself with these ideas as well.
Therefore, these are the ways that will help you in investing 25,000 efficiently and effectively. You can choose any of the above-mentioned methods according to your convenience and that suits you the most. If you feel that these methods are not helpful for you then you don’t have to worry about this as there are some more strategies available that you can follow and the best part is all other methods are also mentioned in this document. So, just read it further.
Where to invest $25000
One question that always bothers a lot of people out there is that if you have a lot of extra money or dollars with you then where to invest it and that number of dollars varies widely but $25,000 is a number that is most common and mentioned quite often everywhere. So, here in this document 16 different ways are mentioned to invest your $25,000 in a very unique and better way. If you have confusion regarding your investment then follow this document.
Unfortunately, where to invest? This question is very hard to answer because there are so many ways available in the market that you can use while investing your money. If you try to choose one answer for this question then it may be real estate crowdfunding. However, this may be your personal choice depending upon your convenience and situation as crowdfunding sites are widely used everywhere for investment purposes.
If you are in that situation then first of all congratulate yourself as various countries struggle to save anything substantial, you may also be the one who has put some part of your funds aside with different intentions that those funds will help you in building your future and one more thing that delayed gratification is not easy. Here, is the one incident that will help you in understanding this situation in a better way. There was one person who was walking in the parking lot at their workplace and walked through Porsches, Teslas, and Bentleys, it help them in taking a fair amount of discipline to stay focused on the larger priority which is financial and time freedom. So, here this incident indicates that the proper time and knowledge are required before taking any decision before investing.
Therefore, if you genuinely have $25,000 and you are looking at ways of investing then firstly define and set your goals clearly and the time frame as well because these factors may affect your returns in the future. So, here this document contains different 16 strategies with the mindset that you all need to invest your money for more than 3-5 years if the period of your investment is shorter than 3-5 years then you don’t have to invest it because it may not offer a good amount of returns then you can put that money in the safe place with minimum volatility where you can access it easily means in liquid form that can be used at any time. So, if your priorities are decided over your investments then look into this document.
Here are the 16 ways to invest your $25,000 that will help you in choosing the best strategy.
Increase Your Savings – High Yield Savings Account or CD
Investing money with a high-yield savings account or CD is one of the best ways of investment as it is the safest place of investment and best for those who don’t have the caliber to take too much risk. Unfortunately, interest rates are quite low in high-yield saving accounts or CDs. If you can find an online saving account & CDs then you can earn 5% APY as online saving accounts offer you this rate. However, online saving accounts & CDs blow away the interest rates of bricks and mortar banks as of the time of this writing, you can get 1.3% APY, and CDs are quite similar to this. The major benefit of this strategy is that it is the safest place to put your money and is backed by the FDIC up to $250,000 which is a very good amount.
However, you can consider the average rate of inflation of up to 3-4 percent in this strategy, and stashing away full money only in savings account for the long-term is similar to continually filling a bucket of water with a tint leak in it. One more thing that you should keep in your mind before investing in saving accounts, over time, the purchasing power of that money is slowly diminishing so better to have some funds elsewhere as well means diversification in your investment is a must to reduce the risk to some extent and to earn more profits. For some other great options, you can check the other strategies as well that are mentioned in this document.
Pay Down Debt
This strategy is not truly an investment it is a type of guaranteed return that means you are saving yourself from interest payments that you have to pay on your debt in the future.
For example, if you are taking debt on your credit card and the interest rate that is sitting on it is 15-19 percent. This means you are not doing many investments in diversified securities which refers to unsafe matches that you make and your return on investment (ROI) will not match.
If you have a significant amount of student loan debt that you may take for your studies then consider refinancing if this option is available to you for your debt but if it’s not the option then weigh whether it’s better to pay down that amount or invest. This will surely help you with your investments.
Invest $25000 in stock market
There are so many ways to invest in the stock market but here are some of the more popular ones:
Plain Old Taxable Brokerage Account
A plain old taxable brokerage account is not designated a tax-advantaged account. There are various people available who prefer to use low-fee brokerage accounts. The list of low-fee brokerage accounts contains Fidelity, Vanguard, and Robinhood. It may be sure that you could pick the individual stocks as one of the famous investors Warren Buffet also chose individual stocks to invest their money. So here you have to wait till the market is loosening the proposition as it would help you gain more. Therefore, if this strategy is followed by the renowned investor then you may also take advantage of this.
So, here if you make up your mind to pick up the individual stocks rather than going for a day trade then you should probably stick to the broad-based and well-diversified index funds. Now the question is how you can do that means what is the strategy? Well, you have to set up a three-fund portfolio like the Wall Street Physician did. One more thing you can choose 150 Portfolios better than yours for your three fund portfolio. You could also use a Robo-Advisor, like M1 Finance. So, you can choose an option that is mentioned above and can see the benefits of using them. These options carry very low fees that you can afford easily and these options may also have the ability to be hands-off. So, for investing your money give this strategy a try.
Investing in REITs is also one of the best options. This is almost similar to mutual funds. REITs also hold various real estate projects same as mutual funds. This strategy of investment is perfect for those who want exposure to the real estate market and wants that their investment to be passive.
REITs are the ones that offer higher amounts of dividends to their users as compared to stocks but the level of transparency and liquidity are often lacking in this strategy. However this is the one that allows exposure to the real estate market even with a smaller amount of capital so, anyone can invest in it without any difficulty. A great example of this strategy is Fundrise. So, give this strategy a try if you have a small amount of capital and want higher dividends.
This strategy also works well for investment. A 401k is a retirement plan which is sponsored by employers to their employees. In this strategy, a contribution limit for individuals has been raised to $18,500 in 2018. If your contribution is a pre-tax contribution then the growth in your account is completely tax-free. Here, you only have to pay all the taxes for your contribution at the time you withdraw your funds. The age of withdrawal is 59.5 which is under the policy of this strategy. If you withdraw your funds before this age limit then you are liable to pay a penalty which is of 10%. The contribution limit is increased by 18,500 in 2018 for the benefit of employees. Some people or employees fund this early on in the year as a lump sum to take advantage of the potential growth which is happened in a year. If you also want to make your future beautiful after retirement then invest in this strategy, this will surely help you.
Health Savings Accounts (HSAs)
There are a lot of people here who want to invest their money to deal with their health issues shortly and many of you might have the ability to contribute or invest in a Health Savings Account. The contribution in this is depending on the high deductibility of health care plans. This thing is referred to as the Stealth IRA and some of you may already know about this. If you don’t know about this then investigate it and make yourself knowledgeable.
HSAs are considered a triple tax-advantaged system because you pay for it with pre-tax dollars. If you use it for health-related expenses then you don’t have to pay taxes on it and through this, you can grow a tax-free amount in your account. The contribution limit in Health Savings Account has gone up in 2018, and it’s now $3,450 for individuals and this limit for families is $6,900. So, for health security, you can invest in it. This is also considered the best way to invest 10,000 in the short term.
Syndication is almost similar to crowdfunding and if you don’t know about it much then for in-depth knowledge of syndication you can check real estate syndication. In the syndication strategy, you can pool your funds with other investors and can invest with a sponsor who operates the deals. One more thing is that most syndication has the same minimum and maximum limits. The minimum limit of investment in syndication is $25,000 and you can invest more than that as well. Standard investment hold times are for 3-5 years during which dividends are paid along the way and your initial investment amount plus a shared portion of profits are returned to you in the given time scale for which you are investing your money.
Now after knowing all the facts and figures the question is, where to find this syndication? So, some of these syndications can be found on some crowdfunding sites and some can be found through networking, and some by attending local real estate investor meetings. So, try this strategy out.
Angel investment is also a better option of investment that can offer you a good amount of return. It may be the case that many of you don’t have the time and desire to start a business on your own. So, for these people, an angel investor is a good option as you may have a good amount of capital with you that you want to invest in businesses. So, here you can work or invest as an angel investor just by investing in and owning a piece of a startup or a small business. This is also considered the best way to invest 10,000 in the short term.
This document contains all the details related to this strategy that you can use to get a fair idea. If you use crowdfunding sites for angel investment then it may work in your favor as there are various opportunities available for the angel investor like you can invest even with smaller amounts as well. These crowdfunding sites include Crowdfunder, AngelList, and SeedInvest. So, use these sites to make your investment successful.
If one of the businesses turns out to be the next Uber, it can be quite lucrative, however, the chance of success is small so, you have to invest wisely. Some of the investors invested in some ventures to participate in some unique opportunities.
One of the more interesting investments that can be made by most people in real estate is in real estate-related game apps. It includes House Flip with Chip and Joanna Gaines from the well-known HGTV show Fixer Upper. A lot of people out there who love this show and a fans of the show. It had been a fun game so when it is presented with the opportunity to invest with some friends then most people go for it and invest in it. This game comes under one of the best games in this category. Since its release date, it gain a huge market share. So, it looks like this bet is going to be a decent investment for you to earn a good return.
Roth IRA & Backdoor Roth IRA
Roth IRA & Backdoor Roth IRA is one of the best ways to invest your money. In short, a Roth IRA is funded by post-tax contributions that can grow tax-free. The contribution and return can be withdrawn tax-free after the age of 59.5 or if you withdraw it before the age limit of 59.5 then you have to pay a 10% penalty. There are some exceptions also available in penalty-free withdrawal but this is available only in certain scenarios. Those scenarios are not covered here in this document you can research them on your own. The contribution limits may vary according to the policies in 2018, the contribution limit was $5,500 unless you are over the age of 50 whereas the limit is $6,500. This is the best way to invest 10,000 in the short term. There is also an income limit in this scheme if you are unable to fulfill that income limit then you are not eligible to contribute to Roth IRA. According to the data of 2018, the hard cap for singles is $135,000, and for married couples, if they file it jointly is $199,000.
The above-mentioned things are all about Roth IRA. Now, what is Backdoor Roth IRA? So, for the higher earners, there is something called the Backdoor Roth IRA. It allows you to contribute your money by converting a traditional IRA to a Roth IRA. Here, in this strategy, a good thing is you still have the option to do this for the 2017 tax year up until you file your taxes. To know more and to know how to do this, you can check the physician which is available in Fire’s post which is Vanguard Back Door. Moreover, before investing in any option you have to research on your own as it enhances your capability and capacity.
Cryptocurrency & Bitcoin
Cryptocurrency and Bitcoin are also one of the most used methods of investment that can be used by most people out there. This is the best place to invest money right now. If you roll your dice and check over the market then the thing is Bitcoin was in the talk but the year 2017 and there is one more term named Altcoins. Altcoins are also a type of cryptocurrencies like Ethereum, Ripple, and Litecoin. These Altcoins may supposedly be the next to pop the market. It may be that market could crash and they could all be quite worthless. In this fence of the business industry, there are very smart business minds are available on both sides. The bitter truth about this system is that no one knows where this will go and what will be the future of this. So, please don’t invest your money where you can’t afford to lose your money. Before investing in research fully and then making a decision.
This year, there are various people all around who invest in this strategy with small amounts with the motive to test this strategy and some of them report about its performance and consequences in their blogs. Some people may also have that type those who are doing regret not jumping into this strategy 4-5 years ago when they knew about it and thought about it. If you don’t want to regret like others then start investing today. If you want to know more about Bitcoin and want to know the correct position of you invested money in this that you invest 4-5 years ago then check out what’s the deal with Bitcoin? This will surely help you out with your queries and problems.
Your Children’s Education – a 529 Plan
The 529 plan is a post-tax savings plan that can help you with your children’s education. While once the policy of this 529 is limited to college and higher education but with the new tax laws, a portion of the 529 plan can be used towards private school education as well which is considered a good change in tax policies.
The deposit limit in a 529 plan is now $15,000 per individual in a year and $30,000 for married couples in 2018. Here, one more thing is that it is also possible to front-load five years of contributions early, so you could contribute $75,000 or $150,000 as a married couple at one time. So, for your children’s education, you can take advantage of a 529 plan.
Buy Rental Property
Investing money in rental property is one of the great ways to invest $25,000. Unfortunately for many of you, $25,000 is not going to go too far in your locality in terms of buying real estate projects. However, in some parts of the country, it’s plenty to purchase rental properties to generate a good amount of cash flow. So, if you want good earnings and a monthly basis earning then investing in rental is a good way. Purchasing a rental property out of your area means the area that is outside of your reach comes with its own set of challenges. Here, you may not know about the local area or local market or local people and also not know whom to trust when it comes to building a local team. So, it’s always better to invest in known areas.
There are various options available in the market through which you can take help in choosing the right property in your locality. One option among those is called a “turnkey company.” This will surely help you in finding the right property, access to the financials, and the management of the property. One more that is true, these companies will charge you some additional fees, but that’s a price that you pay for their local expertise, the time they devote, and the level of convenience that you received from these companies. There are some different flavors also available from turnkey companies like Norada and Roofstock but the company that is us we d by many of the individuals is Homeunion/Investigate. So, give these companies a try to connect you with the best rental property.
If you are a DIY-type person then you can put your team together with them if you would like to do it. Before making your team just make sure that your team consists of local agents who know how to think like an investor and have good knowledge, educational certificates, and skills, and through this, you can make a good reputable property management company.
Start a Blog
This is a business of sorts but this business also deserves its category. In today’s era, blogging is at its peak and social media marketing comes under one of the successful businesses. Thankfully a typical blog business doesn’t require that much working capital. So, anyone can easily give this a start to earn profit and it is the best short-term investment plan of 6 months. The only thing you require and need for running a successful blog business is time that you devote and dedication to work. It is a type of business that doesn’t require full-time work you can start it as a side business and can grow it into a profitable side business. One most important thing is that your topic of the blog must be unique and interesting through which you can grasp more market share. If your topic is not effective then you may not be able to earn a good amount and your investment may go waste. After deciding on the topic just buy a website domain (How to start a Blog), and you could have it up and running within minutes.
If you want to know the exact details of the profit how much profit you can generate per blog? So, the answer is it depends on your interest and efforts. If you are genuinely interested then let us know and after that, through the newsletter, you will get full details about blog stats and income. Just let us know if you want the quarterly newsletter, income reports, updates, and more.
Real Estate Crowdfunding
Investing in real estate is one of the best ways of investment as you can earn or build long-term wealth here. One thing that you should note about real estate crowdfunding is that in some cases, it requires a decent amount of capital as an investment which is of course more than $25,000 but this applies to some specified areas.
However, with the emergence of real estate crowdfunding, there are various benefits are attached to them. In today’s era, you can participate in real estate crowdfunding through online platforms as a lot of online platforms are available in the market. The major thing is the returns on real estate investments may vary based on deals. The return percentage that varies from 7-20% fully depends upon the type of deal. While most of the options are available for the accredited investors in this strategy now, some options are also available for non-accredited investors and the minimum amount of investment is $500. So, everybody can take benefit from it.
There are some people out there who invested nearly $300,000 so far in crowdfunding and continue doing it as they earn a good amount in return. The best real estate crowdfunding sites include EquityMultiple, RealtyMogul,Rich Uncle’s, and many more. If you want to explore more then you can check the list of real estate crowdfunding platforms.
Invest for Charity – Donor-Advised Fund
A donor-advised fund is a type of investment account that is used to contribute to the charitable organizations that you choose to invest in. The good thing is you are free to choose any charitable organization according to your convenience. When you contribute funds or other assets then you are eligible to take an immediate tax deduction. Here, other assets include stocks and mutual funds in the account. In this, a donor-advised fund your account can grow tax-free until you designate some or all of the funds towards any qualifying charity.
There are various people all around that have not opened one up yet, but some of them probably think and made up their minds that they will likely open one this year. If you also want to open this and want to know more then read a debate on this subject and check WCI versus PoF: A Pro/Con on Donor Advised Funds. It will surely help you out with your queries.
Your Own Education
Last but not the least, Investment in education for yourself is one of the best ways to make your future secure. In today’s era, on the internet, there are so many sites or research and free resources available to help everyone. If you think you are in need then you can utilize them as a good resource same as this document. There are a lot of people around there who think investment in education is the best investment and are not afraid to invest in education by purchasing books, courses and even getting officially certified. Officially certified courses include a real estate license. These courses will help you in dealing with market risk and opportunities. So, to invest in the best education you can check your favorite investment area, business, and finance books as these books will help you regarding your financials.It is the best short-term investment plan of 6 months if you want to opt for any course and the duration of most courses is 6 months.
Therefore, these 16 ways will surely help in investing $25,000. Hopefully, now you may get a full idea about the different and effective ways of investment which are available in the market, the only thing is you have to choose accordingly.
Things to Keep in Mind Before You Invest $25,000
Before investing $25,000, take a deep breath and go over your financial situation and circumstances and try to find out that do you have any pressing financial issues that are bothering you and you need to deal with them first before deciding on investing $25k. So, before investing this liquid money of $25k, you should make sure that everything is in order and if you invest this amount somewhere else then your current situation is okay with it. If you are facing any financial trouble then don’t simply go for these investment methods. Firstly analyze your situation then take any further steps.
So, this means that if you already have an emergency of three to six months then you must pay your debt or solve that situation first with this $25,000 and you should have to understand what type of investor you are.
You are the only person who knows about yourself and your level of risk tolerance. So, you are the alone who will help you decide which way suits you the best and in which method you want to invest your money. Whether you want to use it as a down payment on a rental property, pay off some expenses, invest in a CD, or a taxable brokerage account, it’s all up to your risk tolerance level. If you are looking to invest a larger amount of money, then you can see how to invest $100k or $50k safely.
Frequently Asked Questions
Here are various questions and answers are given that are asked by various people. These questions are related to how to invest 25k dollars or where to invest them or what to do with them and lots more questions. So, you can also read them out and get solutions for those questions and others as well.
Where should I put $25000?
You can invest your $25,000 in various ways:
Paying off your debt as it is the easiest way to invest your $25,000.
Max out your retirement accounts.
Start a business.
High-yield savings account.
How can I double my money in the short term?
Here are some options through which you can double your income even in short term as well:
Tax-free Bonds. Initially, tax-free bonds were issued only for specific periods.
Corporate Deposits/Non-Convertible Debentures (NCD).
National Savings Certificates.
Bank Fixed Deposits.
Public Provident Fund (PPF).
Mutual Funds (MFs).
What should I invest in right now for the short term?
The best short-term investments that you may consider for your investment as these options may also offer you a good amount of return even in the short term. So, the list is as follows:
High-yield savings accounts.
Short-term corporate bond funds.
Money market accounts.
Cash management accounts.
Short-term U.S. government bond funds.
No-penalty certificates of deposit.
Money market mutual funds.
What can I do with an extra 25000?
Here are 22 ways to invest $25,000 that you may consider:
Pay Down Debt.
Increase Your Savings – High Yield Savings Account or CD.
Peer to Peer (P2P) Lending.
Roth IRA & Backdoor Roth IRA.
Plain Old Taxable Brokerage Account.
Health Savings Accounts (HSAs).
Hopefully, you will get a fair idea about two things after reading this document as this document contains two situations firstly, 17 smart ways to invest 25,000 safely when you are struggling with money and want to earn a good return with minimum risk, and secondly, the situation where you have 25k and you want to invest them with the best strategy then it contains 16 different and unique ways that will guide you in making investments. So, this document contains all the relevant and best methods or strategies that will help you in coming out of these two situations. You only have to keep one thing in your mind before adopting any of the above-mentioned strategies that don’t fully rely on the details that are mentioned in this document it means you have to research well on your own before opting for any strategy this will help you in getting full details otherwise the details that are mentioned here are fully correct and sound. So, just choose the strategies that suit you the best and improve your current situation and make your future better.