Knowing how to invest $300k is important because one wrong decision could mean a major loss!
If you have $300k to invest, consider yourself lucky and learn the many opportunities you have to make your money grow.
Consider diversifying your investments in passive and active assets. Putting some of your money on autopilot allows your money to grow without any effort, whereas active investments may require some work either upfront or all the time, such as a side hustle.
11 Realistic Ways to Invest $300k
Check out these realistic ways to invest $300k today:
- High Yield Savings Account
- Stocks and ETFs
- Index Funds
- Real Estate
- Mutual Funds
- Alternative Investments
- Invest via Robo-Advisor
- Debt Investments
- Start or Invest in a Small Business
- Peer-To-Peer Lending
1. High Yield Savings Account
A high-yield savings account can help you if you want some of your $300k to be in cash investments. You can access your funds as needed, but when they sit in the account, they’ll earn a higher interest rate than a brick-and-mortar bank can offer.
You can find banks that pay as much as 10x the national APY. While it won’t be anything near what stocks or real estate might pay, it’s a way to invest some money conservatively to offset the risk of other investments.
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2. Stocks and ETFs
Investing in stocks and ETFs can be a passive investment, helping you make money monthly. Consider investing in dividend stocks and automatically reinvesting the dividends to compound your earnings.
Adding ETFs to your portfolio provides automatic diversification since ETFs are baskets of funds from a specific sector, such as healthcare or green companies. You don’t have to worry about diversifying because it’s done for you.
On average, ETFs and stocks yield a 10% rate of return every ten years, so consider them a long-term investment for the best results.
3. Index Funds
Index funds are another passive investment that diversifies your funds. Rather than focusing on a particular sector, index funds mimic an index like the S&P 500. Index funds have higher fees than ETFs, so keep that in mind when choosing your investments.
But index funds are a great way to diversify across an entire market without any effort. They are also passively managed, so the fees, while higher than ETFs, are lower than mutual funds.
Bonds are a good investment to provide your portfolio with stability. They are a conservative investment, so you won’t see a significant rate of return, but they offset other riskier investments.
You can invest in government or company bonds. Government bonds are usually risk-free but pay a lower rate of return. Company or corporate bonds pay higher rates but have more risk since there’s no government guarantee.
Like stocks, mixing up what you invest in can provide the best level of diversity.
5. Real Estate
You have many options to invest in real estate besides buying a property. Of course, that’s a great option too, but if you only want to invest a small percentage of your $300k in real estate, you have other options.
Rental properties can provide a good rate of return when you invest in the right area and properties. It takes much time and active work as a landlord to make rental property investing profitable.
You can rent a property you own in your area, across the country, or even a vacation home that you use a couple of weeks out of the year but then rent to tenants the remaining time.
You can also consider ‘house hacking.’ This requires you to purchase a multi-unit property and live in one of the units. This makes it an owner-occupied property, so you get better financing terms. You can rent out the remaining properties, collecting rent and making a profit while keeping your operating costs down.
Flip and Sell
If acting as a landlord doesn’t sound appealing, consider buying a rundown property, fixing it, and flipping it for a profit.
Like rental properties, this requires due diligence to find a property in an area where people want to live and understand the necessary work to improve the property enough to sell it for a profit.
Most real estate investors buy and flip a property within six months to keep the holding costs down and to increase profits.
REITs or real estate investment trusts offer an opportunity to invest in real estate without owning it yourself.
Rather than investing directly into a property, you invest in a real estate company. The real estate company must pay its shareholders 90% or more of its profits to maintain its REIT status.
REITs invest in income-producing commercial properties, allowing you to invest some of your $300k in commercial real estate, something that would typically require a much higher investment and take more of your time.
Instead, you invest how much you want and sit back to collect the earnings, whether rental or capital appreciation.
REIT returns, like stocks, can vary but average 7% to 10%.
Crowdfunding is another way to invest in real estate without buying property yourself. With crowdfunding platforms, you choose which properties you want to invest in based on their parameters.
Most crowdfunding opportunities are in multi-family units, such as apartment buildings. You invest in the property with many other investors and receive a prorated amount of the returns based on your investment.
The best part is the crowdfunding platform does all the research and due diligence. While you should evaluate each property based on the information provided, you can skip the extensive legwork to get that information.
6. Mutual Funds
Mutual funds provide another way to diversify your investment, but mutual funds are actively managed, unlike ETFs.
This means a professional manager decides which assets to include in the portfolio and which to sell. Because of the service provided in mutual funds, the fees are higher, so be sure to read the fine print and understand the expense ratios and any other hidden fees.
7. Alternative Investments
We often think of only stocks and bonds when investing; however, many alternative investments exist. These tend to be riskier options, so proceed cautiously and always diversify your portfolio with less risky investments.
Gold and Other Precious Metals
Gold, silver, and other metals are safe alternative investments. They serve as a hedge against inflation and are tangible assets.
The downside, however, is that the prices of precious metals vary considerably. If you’re in a bind and need to sell now, you may have some difficulty or experience a loss.
Investing in wine helps diversify your portfolio, especially if you’re a wine connoisseur. Wine is often a good asset for diversification because it doesn’t correlate with the stock market.
Wine values depend on the harvest, weather, and consumer demand. Like stocks, it’s important to diversify your investment in wine. Putting all your money into one wine is like putting all your money into one stock.
You can invest directly in wine, buy wine at auctions, or invest in wine investment platforms that allow you to invest as little or as much as you want in shares of wine while diversifying your investments. The wine platforms store the wine and ensure it.
If you’re a collector, you can use some of your $300k to invest in more collectibles. The sky’s the limit with what you can invest in, but a few options include:
- Vintage cars
- Sports cards
- Comic books
You might think investing in farmland is only for farmers, but today anyone can invest in this lucrative opportunity. Farmland is often a good investment because land is scarce. There’s a limited supply since you can’t make more of it, so you’d own a hot commodity by investing in farmland.
Like real estate, you can own the land directly, manage it, use it, rent it to farmers, or invest indirectly.
There are more opportunities than you might think to invest in farmland indirectly, including:
- Agricultural stocks – Instead of buying land yourself, you invest in the stocks of agricultural companies. This could include farm equipment manufacturers, crop producers, and fertilizer manufacturers.
- REITs – Just like REITs for commercial properties, you can invest in real estate investment companies that invest in farmland. You own a percentage of the land and earn a portion of the profits according to your investment.
- Mutual funds or ETFs – If you want a more passive investment opportunity, mutual funds and ETFs in farming companies are a great way to invest in farmland. Mutual funds may include companies from other related sectors, not just farming, but they diversify your investment.
Artwork is a 67.8 billion dollar industry globally, providing potential for great returns. If you’re an art fanatic and know how to pick pieces, you can invest in art directly. Ensure you can properly store and care for it to preserve its value so that you make profits when you’re ready to sell.
If you don’t want to invest a large amount of your $300k in art but like the idea, you can invest in an art investment platform like YieldStreet. Like most crowdfunding sites, Yieldstreet crowdfunds investments from multiple investors to invest in a single piece of art.
8. Invest via Robo-Advisor
If you want to invest but don’t want to make the decisions yourself, consider a robo-advisor. With a robo-advisor, you get financial advice from a computer or algorithm, and the investment process is hands-off.
You answer a few questions about your investment goals, risk tolerance, and timeline, and the robo-advisor does the rest, creating a portfolio it feels will best fit your needs. Many robo-advisors automatically reallocate your portfolio as needed; some even offer tax-loss harvesting.
Robo-advisors ensure a diversified portfolio and often have much lower fees than other investment advisory options.
9. Debt Investments
When you think of investing, you think of equity, such as buying property or a small company. However, there’s another side to it — debt investments.
The most common debt to invest in is real estate debt. Rather than choosing properties to invest in, you choose real estate investors you feel are a good risk and fund their real estate investments.
You earn interest on your investment monthly and a total principal return by the loan’s end.
10. Start or Invest in a Small Business
Investing in a small business is a great way to invest $300k. If you always dreamt of being an entrepreneur, you can start your own business and keep all the profits. But if running a business isn’t something you’d consider, you can invest in someone else’s idea.
You can fund startups yourself or use investment platforms that bring together small business owners and investors.
Be sure to research the opportunities, whether you’re starting or investing in a business, to determine its outlook and potential profitability.
11. Peer-To-Peer Lending
Peer-to-peer investors invest in consumers who need funding but don’t qualify for traditional bank loans. Peer-to-peer lending platforms evaluate each borrower and provide investors with essential details regarding the borrower’s risk.
Like most investments, the riskier borrowers pay higher interest rates, but you risk losing money. Most peer-to-peer platforms require low minimum investments, allowing you to diversify your capital across many loans.
Apps to Help You Invest Your 300k
Now that you know how to invest $300k, here are some top apps to help you start.
These apps are a mixture of the many ways to invest your capital to help diversify your assets and increase your earnings.
Acorns offers a simple way to invest money automatically by rounding up purchases and using its cash-back program.
Acorns is an excellent option for people looking for hands-off investing. In addition to the round-ups and cash-back, you can set up automatic or manual investments to increase your portfolio. Acorns invests funds in various assets, including stocks, ETFs, REITs, and bonds.
You can open a traditional taxable account or a variety of retirement accounts, and the monthly fees range from $3 to $5 plus any expenses for trading assets.
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Arrived Homes offers a platform for real estate investments, enabling anyone to invest in real estate. With Arrived, you purchase property shares and earn a prorated amount of the rental income and appreciation.
With Arrived, you earn regular rental income and then passively watch your investment grow with capital appreciation. You can invest from $100 to $20,000 in each property, allowing you to diversify across several properties.
Arrived Homes charges an annual fee of an estimated 1% of assets under management. However, they also charge a percentage of the rent if they provide property management.
RealtyMogul offers commercial real estate investments to accredited and non-accredited investors. RealtyMogul has a $5,000 minimum investment, and they invest primarily in apartment complexes.
Because real estate is a long-term investment, plan to keep your investment for five – ten years; however, they have a three-year redemption program if needed.
If you’re a non-accredited investor, you can invest in one of two REITs, but you can only invest up to 10% of your net worth.
Fundrise is another real estate investment platform for any type of investor, including non-accredited investors. Fundrise offers eREITs, which, like traditional REITs, invest in income-producing properties, such as multi-family and industrial properties, and sometimes mortgage debt.
Fundrise also offers eFunds, pooled funds from multiple investors to purchase land and build houses to sell. Investors can choose from multiple portfolios: Fixed Income, Core Plus, Value Add, and Opportunistic. Each portfolio has different risk levels and returns, so investors can choose based on what they can handle.
Betterment is a robo-advisor that offers hands-off investing. They offer 12 portfolios to find a portfolio that suits your goals and risk tolerance. You don’t need a minimum balance for a basic investing account, but if you upgrade to premium, you need a $100,000 balance across all accounts, including retirement, cash, and investment accounts.
A premium investing account gives access to a financial advisor for an additional fee of 0.15% of assets under management. A standard investment account costs $4 a month until you hit a balance of $200,000 when you’ll pay 0.25% of assets under management.
Mainvest is an investment platform for investing in small businesses. If you like funding startups but don’t know where to start or want to diversify your investments, consider Mainvest.
You can invest as little as $100 in each investment and earn a piece of the company’s revenue as long as you hold the investment. Mainvest only accepts 5% of the companies that apply for funding, and you can customize your portfolio to suit your needs.
Flippa is a platform that helps investors buy and sell blogs and other online businesses. It offers a unique way to invest in small businesses online while earning returns. The entire transaction takes place online through Flippa, and you can see all the necessary information to make an investment decision on their platform. As a bonus, Flippa doesn’t charge buyers anything.
Alto is an alternative assets investment platform. You can invest your retirement funds in art, venture capital, real estate, and other alternatives. They also offer an option to invest your retirement in crypto.
Because your investments would be in a tax-advantaged account, you can avoid the hefty tax liabilities that would occur if you sold the same assets outside of the protected account.
Alto IRA fees range from $10 to $25 per month, depending on the chosen plan.
Groundfloor offers fractional investments in real estate. They historically earn a 10% return. Groundfloor requires a minimum $1,000 investment, and all loans are short-term, usually nine months or less.
You can invest in multiple real estate investments nationwide and earn quick profits from fix and flips or longer-term loans that pay monthly interest. Groundfloor enables the everyday investor to invest in real estate, helping you make the most of your $300k to invest.
M1 is a super finance app that helps you save, spend, invest, and borrow. Their savings account boasts a 5.00% APY for Pus members and FDIC insurance to $5 million, and their investment platform charges no commission.
If you apply for an M1 credit card, you can earn cash-back rewards that automatically get invested in your account, and you can borrow on margin to invest or borrow for other needs, such as making a large purchase.
Streitwise is another real estate investment platform that makes investing in commercial real estate simple. Streetwise targets investments with a 5% to 7% dividend payment and offers institutional quality real estate investments that are typically only open to accredited investors.
The minimum investments vary based on the available REITs. Currently, they offer a Streitwise REIT with a minimum $4,000 investment, and it’s open to accredited and non-accredited investors.
EquityMultiple is a real estate crowdfunding app providing access to professionally managed commercial real estate investments. This option is only open to accredited investors; you must invest at least $5,000.
The typical fee is 1%, but it varies by property, and they allow investments in common equity, preferred equity, and debt, with average returns ranging from 10% to 18% depending on the investment.
Tips & Tricks for Investing $300k
So what’s the best way to invest $300k? The key is to take things slow and follow these tips.
- Don’t Put All of Your Eggs in One Basket: Diversify your portfolio as much as possible. Meet the minimum requirement of each desired investment, but be sure there is enough capital to spread through many sectors to ensure you don’t risk everything in one investment.
- Work With a Professional: Professionals cost money, but they are also great guides. You can get guidance regarding investment platforms based on your timeline, goals, current financial situation, and risk tolerance.
- Educate Yourself: Never hand money over blindly. Read as much as possible, and stay up-to-date on the latest news. If an investment you are holding takes a nosedive, have a plan. Adjust as needed, but never make rash decisions. The more informed you are, the easier it is to choose the right investments.
- Consider Your Risk Tolerance and Time Horizon: The closer you are to your goal, the more important it is to choose conservative assets. But the more time you have, the easier it is to invest in riskier assets because you have time to make up for any losses. Some investments, such as real estate, are typically longer-term, whereas stocks, ETFs, and bonds can be shorter-term.
Frequently Asked Questions
Knowing where to invest $300k is important so you avoid putting it all in one place. This allows you to increase the chance of high returns.
Is 300k Enough to Retire On?
Retiring on $300k isn’t possible in the US because of the high cost of living. It could be a good start for someone trying to achieve FIRE, but you’d have a long way to go. However, if you choose to live in cheaper countries, $300k may be enough, although that’s not feasible for most people.
What Return Can I Expect From a $300,000 Investment?
Returns vary by the investment, and there’s never a guarantee of a certain return. Diversifying your portfolio increases your chances of a higher return on your $300k.
Do I Have to Pay Taxes on Investment Earnings?
Typically, you owe taxes on any investment earnings, depending on your situation. If you invest in a retirement account, you may defer taxes or even avoid them if it’s a Roth IRA. You may also defer or lower taxes using tax-loss harvesting and 1031 exchange opportunities in real estate investing.
How Should You Invest $300k
Knowing how to invest $300k is the key to reaching your financial goals.
With $300k invested in short and long-term investments, you can reach short and long-term goals and make the most of your capital. So whether you’re saving for retirement or a much shorter goal, investing is the key to reaching them.