How to Invest $200,000 – Best Paths to Become a Millionaire

A fantastic resource for investing $200K, including the best retirement funds, investment newsletters, brokerage firms, real estate investments, bestselling books, and more.
Table of Contents
 
 
 

What’s the Best Way to Invest $200K For Me?

Those last two words are essential to deciding how to invest $200,000.

The strongest options include stocks, real estate, bitcoin, and investing in yourself. Of course, there are many options within each of these categories.

Investment Newsletters

Generally speaking, our favorite option for investing $200K is using opportunities from a reputable investment newsletter.

It provides even beginner investors access to elite investing opportunities, and the potential ROI is amazing. You pay a relatively small cost to tail off world-class investing experts, investing where they invest.

It’s key that the team personally invests in every opportunity they recommend, as with Insider Weekly.

When you have a large chunk of money to invest, you have an enormous advantage over everyone else. Often, hard work doesn’t create wealth–wealth creates wealth. An elite investment newsletter leverages that wealth powerfully.

If you have decent risk tolerance and want to maximize your wealth, JUMP TO INVESTMENT NEWSLETTERS.

Real Estate Investments

Real estate is generally lower risk and provides incredible tax benefits, but requires a lot of hands-on work and research. That’s especially true starting out.

Another issue is that your investments will be difficult and time-consuming to liquidate. However, a great option “in between” stocks and real estate are REITs, which provide the best of both worlds for some people.

If you have significant experience with buying, selling, and/or fixing houses, then Fix-and-Flip can be a great option that leverages your strengths.

For more information, JUMP TO REAL ESTATE INVESTING.

Bitcoin

Oh, Bitcoin. Warren Buffet called it “a worthless delusion and rat poison squared“. On the other hand, Elon Musk has over $5 billion invested in Bitcoin.

If you’re really interested, check out this In-Depth Guide to Bitcoin that Won’t Leave You Frustrated. Beyond that, JUMP TO OUR BEST BOOKS ON BITCOIN.

Essential Steps Before Investing $200,000

1. Set up an Emergency Fund 

Where to Put Your EF

An emergency fund should be a savings account with 3-6 months worth of living expenses. Generally, you should save 3 months worth if you have stable income and 6 months if you don’t. 

Alternatively, you can use Certificates of Deposit. But CDs offer low interest rates, charge penalties for early withdrawals, and require a bit more of a hassle to liquidate.

In our opinion, savings accounts are better, especially since you can find options with higher interest rates than CDs. 

Another alternative is a money market account (not a money market fund). It’s essentially a savings account with some checking account features like a debit card. 

MMAs aren’t a bad option, but we still recommend Discover’s savings account. It can be wise to keep your emergency fund separate from your regular bank account. 

It has a very competitive interest rate of 0.5% paired with exceptional customer service. MMAs typically have lower interest rates even with a jumbo deposit of $100K. 

Avoid Overfilling Your EF

Remember that in the investing world, cash is poorly optimized capital. As the classic book Rich Dad, Poor Dad teaches, most people work for money while the rich make money work for them. 

If you have $200,000 to invest, you are clearly in a position to make your money do the work.

An emergency fund should be robust enough to float you through a job loss. On the other hand, if you have more than enough in your EF, then you limit the total return on your investments. 

You may be most comfortable keeping $100,000 of your $200,000 in a savings account even though you only need $20,000 to live for six months. 

But if you invested that extra $80,000 in the stock market for 10 years instead, you would have earned another $80,000. In 50 years, you would have earned over $2.5 million assuming the market continued its 30-year trend of 7% ROI. 

When deciding how much to place in your emergency fund, be aware that saving too much can have a massive opportunity cost. [Block Quote]

Ask yourself if the peace of mind is worth potential hundreds of thousands of dollars. And remember you can still quickly liquidate stocks and many other investments. 

Generally speaking, try to avoid putting more than 5% ($10K of $200K) into your emergency fund.

2. Safeguard Your $200,000

This section should be a no-brainer, but it’s still worth mentioning.

By “safeguarding,” we mean protecting yourself from situations that can take a huge chunk out of your wealth. Ensure you have proper health care that won’t leave you with massive hospital bills. 

You’ll also need auto insurance and homeowner/renter insurance. Consider identity theft insurance and pet health insurance. Other large expenses include burglary, funeral costs, and educational expenses.

A $100,000 student loan with 6% interest paid over 15 years will cost over $50,000 in interest. Paying upfront can pay off in the long run. Of course, if your investment ROI would be higher than 6%, it would make sense to keep the student loans. 

It’s also key to ensure you don’t somehow entangle yourself in a lawsuit that could bankrupt you. Keep your ventures above-board. 

3. Pay Off Credit Cards 

Typically, credit card APRs (annual percentage rates) are significantly higher than all but the best-performing investments. Paying your high-interest balance(s) is always a wise financial decision before you begin investing your $200,000. 

Alternatively, you can transfer your balance to select credit cards and enjoy 0% APR for 12 months or so. But this only postpones the inevitable and doesn’t make long-term sense if you have $200K on hand.

4. Max Out Matched 401(k) Contributions

If your employer provides a great 401(k) plan, you’re in a great position. Except in rare cases, you can’t contribute directly with outside funds. 

But you can increase your payroll 401(k) contributions until you’ve reached the maximum amount that your employer matches. The most common match is 50 cents on the dollar for up to 6% of your paycheck. 

In a way, that’s like an investment with an immediate 50% ROI plus additional growth over time. Of course, there are significant contribution limits. Especially if your 401K is similar or better, you should take advantage immediately. Don’t leave that money on the table.

If your increased 401(k) contributions leave you with too little for living expenses, just take the difference from your $200,000 nest egg. 

Tips for Matched 401(k) Contributions

Pro Tip 1: Seriously consider getting a Roth IRA. This is not an investment fund, but a “wrapper” that goes around your retirement investments. You’ll pay taxes before adding funds to your retirement account. But then your withdrawals at retirement are tax-free. 

In other words, you pay taxes on your contributions, but avoid taxes on your dividends. Over time, that will add up to beaucoup bucks. 

Pro Tip 2: Contribution matching limits are often annual. So let’s say your employer matches up to 6% of your paycheck. If you haven’t contributed a dime for six months, you may be able to contribute 12% for the remaining six months. 

Best Ways to Invest $200,000

Ok, a huge windfall or inheritance just fell in your lap. We expect you’ll either want to prepare for retirement or hopefully become a millionaire before you retire. 

With $200,000, you can become a millionaire in under 20 years with a 10% ROI, the stock market average.

You can invest that weath in a traditional portfolio, real estate, or take more interesting investment paths like Bitcoin. We explore the best ways to pursue these options.

How To Invest $200K in Stocks and Bonds

When many people hear the words “stock market,” they think “risky”. But recent developments in investment options have mitigated that risk. 

Mutual funds and ETFs (Exchange-Traded Funds) allow you to invest in a single, widely-diversified fund. 

Best Retirement Funds: Vanguard

vanguard is the best retirement fund investment for $200,000

So you just want to find the perfect place to let your money grow until you move to a Florida beach house and buy yourself a sailboat for a retirement gift. Well, you have a whole fleet of options. 

The best option for many people will be a retirement mutual fund from an online brokerage. It should have a target end date (that is, a target retirement year), low fees, and a proven management team.

By going this route, you diversify greatly while keeping your portfolio simple. You gain expert support while paying extremely low fees. And you get an investment product tailored to your specific situation. 

Target date funds are especially great retirement investments because they change their risk profile over time. The closer you get to retirement, the less risky they become. Plus they are a widely trusted investment option.

“More than 75% of investors have some of their wealth (retirement or non-retirement) in at least one target-date fund.”

How America Saves, 2019 

Online brokerage firms have different areas of expertise. Perhaps the king of target-date retirement funds is Vanguard. For my own Roth IRA retirement account, I researched my options for days and landed soundly on Vanguard.

But I’m far from alone in my opinion. Check out this article detailing the best retirement funds. The majority of them are Vanguard funds. The same is true for Kiplinger and The Balance

Alternatively, there’s Morningstar’s rankings for the best target date funds. Keep in mind, however, that these funds are constantly changing rankings. Every year looks a little different, which is to say any given year’s rankings aren’t particularly meaningful.

Retirement investment funds typically last decades. The people managing your (and every other) fund will eventually change. 

Best Investment Newsletter: Capitalist Exploits

🥇 Editor’s Choice for Investing

capitalist exploits provides the best investment newsletter for new and expert investors

What is Capitalist Exploits?

Their claim to fame is a wildly effective investment newsletter.

Capitalist Exploits is a great resource for premium-quality investment advice, but they also have a huge bank of top-notch educational resources.

Check out this interesting article from investing experts on the best financial decisions of their lives. The resounding theme is financial education. It was less difficult than they imagined and paid off beyond their expectations. 

Capitalist Exploits Reviews

Check out the Trustpilot Reviews, where they got 4.9/5 stars. That’s rare for a market where so much is at stake. 

It’s important to understand that companies can leverage their marketing efforts in order to get strong reviews from satisfied customers. And Capitalist Exploits has many very satisfied customers. 

What’s even more impressive, however, is that there is only a single negative review across the entire internet. Or at least I did a very deep dive and only found one. That customer received an excellent response from CE and a full refund. 

What Services Do They Provide? 

The company is a lineup of heavy-hitting investment experts. They express their purpose here:

We identify asymmetric risk/reward opportunities wherever they may lie. We are not wedded to any asset, sector, jurisdiction or investment vehicle, but instead use subject-matter experts to guide us on diligencing opportunities that enable us to achieve outsized returns.

Capitalist Exploits

Their research target investment opportunities that can potentially give a 300% profit. For example, they might suggest that you invest heavily on farmland, which has outperformed the S&P for some time. 

Here’s a list of the services they provide: 

1. Insider Section – Access to premium advice and other services

2. Research Reports – Dozens of professionally researched investment ideas, across non correlated sectors and themes, all featuring truly asymmetric risk/reward profiles

  • Investment ideas often targeting 5x + returns
  • 60+ ideas you can take advantage of immediately
  • Chris & team invest in all opportunities
           (ensuring our incentives are aligned!)

3. Weekly Letter – The team updates you each with on the opportunities they’re watching, plus more stock tips for you to check out.

4. Monthly Q&A – Ask Chris and the team questions about existing investments in the portfolio of Insider investment ideas, or about money management in general.

5. Community – Join hundreds of existing subscribers who you can network with and discuss your investments in our secure chat room.

Why Choose Captalist Exploits?

In our opinion, this is the best way to earn the highest return on investment. It requires limited work and expertise, and you get extremely valuable information for relatively little cost.

Even better, you can do a free trial for one week. Plus, you get a 30-day money back guarantee once you’ve signed up. The service costs $1999 annually. I’d encourage you to check out the client reviews on their website and sign up for their free content.

You don’t need to be an experienced investor to make profitable use of their Insider Weekly newsletter. Or, for that matter, even to see how much value they can provide for the tiniest slice of that $200,000 you want to invest.

Best Books for Stock Marketing Investing

Deciding what to do with $200,000 is no easy task. It should be a well-informed process resulting in a slow-cooked decision.

“Risk comes from not knowing what you’re doing.”

– Warren Buffet

These bestselling books can be a great place to begin your education. Each one has wildly positive reviews from experts and casual readers.

Classic Must Reads

If you’re interested in investing in the stock market, you should read at least one of these books. Best case scenario, you read all of them three times. They’re that good.

Recent International Bestsellers

If you’re looking for recently published books, these titles are freshly minted and already widely admired. They’re fantastically helpful for trading on the stock market or generating wealth in general.

How to Invest $200K in Real Estate

Real estate is widely considered a solid investment. The NAR reports that home prices have increased more than 5% annually for the past 50 years.

However, “What’s the best way to invest in real estate?” is not the right question. You should be asking, “What’s the best way to invest in real estate for me?”

For one of the best free resources on real estate investing, check out this pdf eBook from Millionacres.

Best Real Estate Investing Books

These bestselling titles are the cream of the crop. They are among those rare resources that cost less than $20 but can be instrumental in generating significant wealth.

Minimize expensive mistakes in real estate investing.

Interesting Ways to Invest $200K

Bitcoin

As mentioned, Bitcoin has wild potential to generate extreme wealth quickly. But of course, it has major detractors as well.

If you want to get serious about Bitcoin, start with this online guide. Then graduate to these books, which are the best of the best on Bitcoin investments.

Best Books on Bitcoin Investing

best book on how to invest $200K
bitcoin book on investing $200,000

 

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Benjamin Wagner
Benjamin Wagner