We’ve been discussing different ways I would put money to work, whether it’s $100,000 or $250,000. Now, let’s tackle the big one: how I’d invest a cool million today.
Putting a million dollars into investments is a different ball game from dealing with $100,000 or $250,000. Losing that smaller chunk might sting, but it’s bearable. But if a million dollars were to vanish, it could send you spiraling into despair!
Once you’re sitting on a million bucks in investments and your house is all paid off, the game changes. You don’t have to gamble on risky ventures. You can settle into a comfortable groove with low-risk options and enjoy life.
But we all know that more is often better, so let’s explore how to make that million grow without being reckless.
Investing a Million Bucks Isn’t One-Size-Fits-All
There’s no single way to invest a million dollars because it depends on your personal situation. How did you earn that money? If it took blood, sweat, and tears, you’ll probably be more cautious with it, and rightly so.
Your age factors in, too. If you’re already comfortably off in your later years, losing a significant sum would be a gut punch. So you’ll probably be conservative there as well.
How big is that million in the grand scheme of your wealth? If it’s just a small part of your net worth, you might be more daring with it.
And don’t forget your income. Someone raking in a million a year can afford to be bolder than someone living on $50,000.
In this article, let’s assume this million came from over a decade of hard graft and maybe some luck – like striking gold with a startup, selling a longtime home, or landing a windfall from a divorce or accident.
Most people don’t save up a million dollars and then throw it all into investments at once. Usually, it’s a sudden windfall that prompts such a move.
Hitting the Million-Dollar Mark Feels Like Winning
Reaching that seven-figure net worth is an awesome achievement. You’ll probably bask in the glory for a while before setting your sights on the next financial goal, such as investing that million.
Investing or spending a million bucks opens up a world of options. Want to spend your days on a Hawaiian beach? You could do that for a while or invest to earn even more. The dream is having money that works for you, providing a never-ending stream of income.
A Glimpse Into My Recent Million-Dollar Moves
In 2020, I stumbled upon my dream home and made a bold move. I didn’t have a million in cash, but I scraped together over a million by selling off some municipal bonds. I used that to make a down payment, borrowing the rest at a decent interest rate.
Today, that down payment has turned into about $1.7 million, including a 57% gain thanks in part to some clever leveraging.
A Trip Down What-If Lane
Had I known what I know now, I might have played things differently back in 2020. Maybe a smaller down payment and investing the rest in the S&P 500. That move could have netted me around $750,000 today, with gains elsewhere totaling around $850,000.
But hindsight is 20/20, and I was dealing with competition for the house and a very uncertain world at the time.
Fear Factor and 2020’s Challenges
Back in 2020, the uncertainty was real. I was more comfortable buying something tangible like a home rather than risking it on volatile stocks. I still invested in stocks, but real estate felt like the safer bet then.
Now, with interest rates up, I can see that my decision to offload those municipal bonds was a smart one, despite the market fluctuations over the past years.
Investing a Million Today: What I’d Do
So, now that I’ve walked you through my recent million-dollar investment adventure, let’s talk about what I’d do if I were in those shoes today.
For someone like me, who’s more concerned with control over time rather than maximizing wealth, my advice on investing one million dollars might be different from someone who’s trying to grow their financial foundation aggressively.
But, hey, if you’re young and find yourself with a million-dollar windfall, congratulations! Investing that money wisely can set you up nicely for the future. And I hope my experience can give you some guidance.
