How to Invest $200K: 9 Best Ways in 2023

Congratulations! You want to know how to invest $200K!  $200,000 is an important threshold in your financial journey. Once you get to this level, you’ll be able to build a well-diversified portfolio.

But you didn’t get here overnight. Now is the time to make intelligent decisions about how your money is allocated so you can help it grow, and protect it from drastic shifts in the market.

So, what’s the best way to invest $200,000? Let’s take a look.

How to Invest $200,000

Here are 9 great ways to invest $200k:

  1. Work with a Financial Advisor
  2. Invest in the Stock Market
  3. Invest with a Robo Advisor
  4. Invest in Real Estate
  5. Invest in REITs
  6. Invest in Your Personal Real Estate
  7. Invest in Cryptocurrency
  8. Invest in an HYSA
  9. Invest in a Health Savings Account

1. Work with a Financial Advisor

When you invest a larger sum of money like $200,000, consulting with an expert could be well worth your time. Financial advisors can provide expert guidance to help you reach your financial goals.

They can also assist you with identifying your risk tolerance and making informed investment choices that align with your financial goals. Knowing you’re working with an expert can provide you with peace of mind as you make decisions about your investments and manage your portfolio.

Our top pick is J.P. Morgan’s Personal Advisors Service, one of the most reputable companies in the financial industry. The service gives you access to a team of financial advisors who work with you to create a tailored financial plan based on your goals.

That includes selecting expertly-curated portfolios to invest your funds in and rebalancing your accounts to keep you on track. You also get ongoing support, with annual check-ins and access to your advisors by phone or video call for advice. For a limited time, the service is free for the first six months.


2. Invest in the Stock Market

Savvy investors know that $200,000 will grow at an exponentially faster rate in the market than it would in your savings account. By investing a large portion of your money in stocks, bonds, mutual funds, and ETFs, you can, with good decisions, turn your $200,000 into a much larger amount.

For example, at the stock market’s average rate of return of 10%, let’s say you invest your entire $200,000 into the market and make an annual contribution of just $1,000. After 30 years you would have over $3.5 million in the bank. More strategic investments could generate, even more, setting you and your family up for a retirement free from financial worry.

Top Reasons to Invest in the Stock Market:

Compound Interest

Compound interest is so powerful, Albert Einstein called it the eighth wonder of the world. The higher rate at which your $200,000 will grow in the market, thanks in part to compound interest, makes it foolish to ignore. The idea here is that the returns you earn… earn more returns. If your $200,000 earns a 10% return, you’ll have $220,000 working for you. Add another 10% to that pile of money and you have $242,000, and so on.

Market Upside

Even if you play the stock market very conservatively, there is always the chance that one of your investments can take off in a big way.  For example, imagine you’re an early investor in Amazon, and you bought into the company at just $18 per share after the initial public offering (IPO). Today, the stock is worth $3,218.51. So if you bought 100 shares of Amazon after the IPO and kept it, your investment would be worth six figures today.

But you don’t even have to get lucky with new stock. In the summer of 2009, Amazon shares were still trading under $100 apiece. Find great companies with bright futures and watch them soar.

Accommodating Your Risk Tolerance

Remember that as an investor, you can’t control market volatility. However, you can control the investments you make and spread risk around.

One of the first things you’ll want to do is determine your overall risk tolerance, which is how much risk you are willing to take with your investments.

Risk tolerance tends to depend on your age, income, and financial goals, not to mention your temperament. If you’re a young whippersnapper with decades of income-generating years ahead of you, your risk tolerance should be much higher than someone approaching retirement whose livelihood will solely depend on financial investments and fixed retirement income (e.g., pensions, and Social Security payments).

When your $200,000 is in the market, you have full control over how much risk you want to take, allowing you to be aggressive, moderate, or conservative, depending on your goals and life status. Whichever strategy you decide to take, you should be able to earn much more in the market than if you were to invest the funds in a savings or money market account.


How to Invest $200K in the Stock Market:

Next, let’s take a closer look at how to go about investing your $200,000 in the stock market.

Find an Online Brokerage

To start investing your $200,000 in the stock market, sign up for an online brokerage account.

You can’t go wrong with any of the leading U.S. brokerage institutions, like J.P. Morgan, Vanguard, Schwab, or Fidelity. There are also many top-notch discount brokers, such as E*TRADE and Ally Invest.

Before selecting a platform, poke around to find a provider that resonates with your needs. Do you plan to trade stocks frequently? If so, a discount broker that offers a fee-free trading platform might make the most sense. On the other hand, if you prefer to purchase just one or two ETFs and leave the money there until retirement, you might want to go with a larger firm.

Either way, make sure your choice offers excellent customer service, low-cost or free trades, and an easy-to-use online platform. After all, the goal is to park millions of dollars here over time, so only choose your brokerage firm after fully vetting your options.

Brokerage vs. Retirement Accounts

Once you select a brokerage account, the next step is to set up one or more accounts.  There are generally two types of accounts to choose from:

Retirement Accounts

Retirement accounts include individual retirement accounts (IRAs), Roth IRAs, SEP IRAs, and individual 401ks. These investment options provide tax-deferred growth for your investments and are a must-have for long-term investing.

With a Roth IRA, you pay taxes on contributions and receive tax-free withdrawals later in life. With a traditional IRA, you deduct contributions upfront and pay taxes on withdrawals you make at a later date.

You can’t go wrong with either option, but generally speaking, the account you select should be determined by your expected tax bracket at retirement age. Roth IRAs are the way to go if you expect to have a higher income at retirement (because you don’t have to pay taxes on your withdrawals at that time).

Regardless of which you choose, both come with an annual contribution limit of $6,000. So, your best bet here is to invest $6,000 into the IRA so it can start growing on a tax-deferred basis.

If your current employer offers a retirement plan, you definitely want to max that out each year, especially if they offer matching funds.


Like most people, you probably have some short-term goals you want to achieve before reaching retirement age that will require capital. This may include starting a business, buying a house, starting a family, or all three!

To grow your money, but also have access to it for short and long-term initiatives, open a brokerage account, which gives you full access to investing in the stock market.

For starters, consider taking $100,000 or 50% of your original lump sum and put it into a brokerage account so you can buy individual funds, ETFs, mutual funds, and bonds. You can always deposit more later.

Diversifying Your Market Investments

You now have $100,000 set aside to grow in the stock market. The next step is to allocate your money into various funds for diversification.

Here are some of the options you have.

Individual Stocks

One option is to buy individual stocks from companies like Apple (AAPL), Disney (DIS), or Coca-Cola (KO).

Generally speaking, you should pick companies you know and like that have a proven track record of success. It’s sometimes said that the best stock is the one you never have to sell.

Also, remember that when you purchase individual stocks, you are buying slices of ownership in those corporations. The more shares you purchase from a company, the more ownership stake you have in that organization.

Disclaimer: Buying individual stocks is not for the faint-hearted. If you really want your money to grow, you must be willing to ride out market volatility.

Index Funds

Another approach is to buy index funds, which are portfolios of stocks or bonds that mirror a specific index. Buying an index fund can give you access to a broad range of holdings. They also tend to come with low management fees, meaning more of your money goes towards investing and growth.

Mutual Funds

Mutual funds are a bit different from index funds, as they are actively managed and designed to outperform specific markets. Mutual funds are typically more expensive than index funds, and there is no guarantee that they perform better. However, they are still a solid way to diversify your holdings.


ETFs are like index funds, except they are bought and sold throughout the day much like stocks. ETFs are passively managed, meaning they are automated and do not require oversight from a fund manager.


A bond is a form of debt security, where a lender issues a loan with a set interest rate. There are many types of bonds, some of which include Treasury bonds, municipal bonds, and corporate bonds. Bonds can provide strong and predictable returns, but they offer limited flexibility.

Bonds are known as a safer investment category because they are not as prone to market shifts as individual stocks and funds. That said, many investors allocate a portion of their holdings toward bonds. Another wise option is purchasing bond index funds.

Tips for Allocating Your Stocks

How much you allocate to each asset category above depends entirely on your investment strategy.

Are you a set-it-and-forget-it investor? If so, you might want to focus more on long-term growth assets, like ETFs and index funds.

On the other hand, if you are more of a hands-on investor and want to try your luck picking individual stocks, you’ll probably want to assign more of your money in that direction.

How you allocate your stocks depends entirely on your personal financial goals. If you’re having trouble forming a strategy, it’s worth consulting with a certified financial advisor or signing up for a stock advice service. The more investment advice you digest, the better prepared you will be to help your money grow.

That said, here are some other general tips for investing in stocks.

Focus on Diversity

Best practices suggest that your asset allocation includes a mix of blue-chip growth stocks and secure areas like index and mutual funds. Build a core around stability, but don’t be afraid to take some risks to fuel growth if you are able.

Learn to Read Stock Charts

Instead of blindly following what you read online, learn to identify stocks yourself. A stock chart tells you a variety of details like the price-to-earnings ratio (P/E ratio), dividend yield, and more. By learning to read stock charts, you can cut through the noise and identify bargain stocks and companies poised for breakouts—along with companies trending in the wrong direction.

Ultimately, there is a lot of nonsense circulating online (and among peer groups) and it’s easy to make a reckless decision if you don’t know what you’re doing. By learning to think for yourself in the stock market, you can reduce risk and increase your chances of success.

Keep Your Emotions in Check

One of the hardest things about investing is remaining unemotional. Investors often get into trouble when they react to trends. It’s very hard to time the market, and doing so is an easy way to lose money.

Instead, focus on long-term projections and companies likely to generate steady growth and generous dividends. This way can take longer to get rich, but it’s a tried and true method that protects your assets over time.

Pay Off Other Debt

Do you have any high-interest car loans or unsecured credit card debt?

If so, the best financial advice I can give you is to settle up your high-interest debt right away so you can begin investing with a clean slate and liberate your monthly income from those payments.

Some student loan debt and mortgage debt are OK because your market ROI should outweigh your interest costs on those loans. However, if you are locked into a high-interest student loan, you’ll want to pay that off.

3. Robo-Advisor

A robo-advisor is an automated investing service that uses algorithms to allocate your investments.

Two of the most popular robo-advisors are Betterment and Wealthfront. Thanks to demand from millennials, many leading brokerages offer robo-advisor accounts as well.

Some robo-advisor accounts allow you to take advantage of tax-loss harvesting at certain investment thresholds, which is a buzzword you’ve probably heard lately.

Learn about the top robo advisors.

4. Real Estate

Real estate investing is the next avenue to consider. To be clear, it’s not for everyone, but here are some reasons why you should at least explore your options.

Buying real estate investment property is an excellent option for a few reasons.

  1. It allows you to increase your net worth and diversify your investment portfolio.
  2. It can also offer some nice tax advantages.

For example, if you get a good deal on a rental property, you can build it up and sell it for a profit. To avoid paying capital gains on your profits, you can complete a 1031 exchange, which allows you to contribute your profits toward the purchase of your next investment property.

You can also generate recurring cash flow by renting your properties to residential or commercial tenants.

Over the course of a 15- or 30-year mortgage, the equity value of the property should far exceed what you originally paid. Oftentimes, investors try to sell around the 27.5-year mark when they can no longer write off depreciation on their taxes. At that point, it could make sense to do a 1031 exchange and diversify your holdings across several smaller properties.

5. REITs (Real Estate Investment Trusts)

Not everyone has the resources or desire to manage a property. After all, it can be very expensive and it can require a lot of time unless you hire a management company (which eats into your profits).

As an alternative, many investors choose to invest in real estate investment trusts (REITs) through an online service like Fundrise.

A REIT is a trust that owns and operates real estate investments. You can invest in REITs and receive dividends, just like you would with an index fund. As a result, you can enter the real estate market in a much easier and more cost-effective way than buying a property outright.

If you are an accredited investor, meaning you personally earn over $200,000 annually (or if you and your spouse earn over $300,000) consider signing up for CrowdStreet or Yieldstreet. Non-accredited investors should check out Fundrise.

6. Personal Real Estate Holdings

Are you still renting, but considering buying a place?

If so, consider taking roughly 10-20% of your original lump sum of $200,000—or $20,000  to $40,000—and putting it into a down payment on a house, condo, or apartment.

Just remember that if you buy a primary residence, you should keep an extra $10,000 to $20,000 on hand to cover closing fees and expenses (on top of your down payment).

7. Cryptocurrency

Over the last year, cryptocurrency has exploded in popularity. All of a sudden, cryptocurrency is generating attention from mainstream investors and institutions — meaning it should be on your radar, too.

Cryptocurrency is a type of digital currency where transactions are completed and maintained using cryptography. Cryptocurrency is stored in an encrypted, public digital ledger that is both open and tamper-proof.

Some of the leading cryptocurrencies on the market right now include Bitcoin, Ethereum, and Litecoin. However, Bitcoin is the global king of cryptocurrencies, following its 2021 bull run that saw over 300% growth in just a few months. Some analysts predict that one Bitcoin could be worth as much as $100,000 or more.

How to Invest in Cryptocurrency

To invest in cryptocurrency, open an account through a leading cryptocurrency exchange like Coinbase or Bitfinex. Some brokerages are now offering cryptocurrency management, too.

Once you open an account with an exchange, you have to link your account to a payment source like a bank account. From there, you can buy and sell a variety of cryptocurrencies and watch your progress over a dashboard.

How Much Cryptocurrency Should You Buy?

Only you can make this determination. Go back to your risk tolerance and how comfortable you are exploring a highly volatile—not to mention unregulated—investment class. Cryptocurrency is extremely risky, and you have to go in expecting that a coin could crash at any time. As such, it’s a good idea to go in with a strategy like buying the dip or holding on for dear life.

Now that you’ve learned how to invest in the stock market, with a robo advisor, in cryptocurrency, and in real estate, the final step is to put some into savings so it can remain secure and generate a small annual return from interest.

8. High Yield Savings Account (HYSA)

A savings account is a low-risk, FDIC-insured deposit account available at most traditional and online banks.

For the sake of simplicity, the only savings account you should consider is a high-yield savings account (HYSA). An HYSA is a savings account from an online bank. With an HYSA, you get a variable APY with a much higher interest rate than what you can expect from a traditional bank.

One thing to remember is that with an HYSA, there’s a limit to the number of transactions you can make during a monthly cycle, so you can’t treat it like a checking account.

9. Healthcare Savings Account (HSA)

Don’t forget to put money aside for healthcare expenses. If you have a high deductible healthcare plan, consider investing in a healthcare savings account (HSA) so it can grow on a tax-free basis just like a retirement account.

This means you can grow and invest your funds and use them for qualified healthcare expenses like doctor’s visits and medicine.

Frequently Asked Questions

Do you need an emergency fund?

Yes. If you don’t already have a healthy emergency fund ready, this is one of the first bases you should cover. The amount you set aside varies depending on your situation and budget, but most financial experts will advise you to set aside at least 6 months’ worth of expenses. Emergencies can come out of nowhere, so it’s critical to be prepared.

Is $200,000 a lot of money?

Yes, $200,000 is a large amount of money. However, it’s definitely not enough to retire on, and it can go very quickly if you make reckless decisions and aren’t careful about sticking to a budget. If you want to see your money grow to millions when you retire, you must stick to a plan and invest. Otherwise, you could wind up burning through $200,000 in no time at all.

Are Penny Stocks a good investment?

No. Avoid getting lured into this trap and focus on proven investment methods like the ones you learned about above (e.g., stocks, bonds, mutual funds, index funds, ETFs, and real estate).

How Should You Invest $200K?

How you allocate your $200,000 is completely up to you and depends on your lifestyle and investment goals.

Leaving those variables aside, by building a diversified portfolio and investing in proven companies and funds (or in real estate) you’re bound to see success, just like me and so many others.

Keep learning, keep investing, and before you know it you can experience true financial independence.

J.P. Morgan Wealth Management is a business of JPMorgan Chase & Co., which offers investment products and services through J.P. Morgan Securities LLC (“J.P. Morgan”), a registered broker dealer and investment adviser, member FINRA and SIPC. Millennial Money is a publisher of J.P. Morgan, (“Publisher”). The Publisher will receive compensation from J.P. Morgan if you provide contact details to speak with a J.P. Morgan representative. Compensation paid to the Publisher will be up to $500 per completed contact form. Compensation provides an incentive for the Publisher to endorse J.P. Morgan and therefore information, opinions, or referrals are subject to bias. J.P. Morgan and the Publisher are not under common ownership or otherwise related entities, and each are responsible for their own obligations. Investing involves market risk, including possible loss of principal, and there is no guarantee that investment objectives will be achieved.

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