15 Smartest Money Moves When You've Got $50,000 in the Bank

Reaching the $50,000 mark in your bank account opens many new avenues for wealth-building.

Seizing investment opportunities to grow your money and continuing to improve your financial fitness is essential.

There are many ways to diversify your portfolio to expose you to less risk and receive greater returns. You can pick investments that best meet your liquidity needs, risk tolerance, and financial goals. These investments may include a mixture of stocks, bonds, real estate, and more.

Here are 15 things you should do once you have $50,000 in your bank account.

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1. Create an emergency fund

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Knowing you have money available to help with unexpected circumstances can help put your mind at ease.

With $50,000 in the bank, you should have more than enough to set some funds aside for emergencies , like health expenses or house and car repairs. Aim to save three to six months of living expenses and keep the money in an account you can easily access.

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2. Pay off debt

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Debt with high interest, such as personal loans and credit card debt, can affect your savings and future earnings. Therefore, paying it off immediately is crucial to avoid wasting money on interest payments.

You can use the avalanche method to crush your debts with the higher interest rates first or the snowball method to knock out the smallest debts first.

3. Open a high-yield savings account

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You can often get a much higher rate with a high-yield savings account than with a regular bank account. The higher your account balance, the more interest you will earn

Look at online banks, which tend to pay higher interest rates than brick-and-mortar banks. However, make sure the accounts don’t have monthly maintenance fees or minimum balance requirements.

4. Invest in a CD

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A CD is a type of savings account where you deposit money and don't touch it for the term. Depositing more money for a longer period often leads to higher yields.

There are usually penalties if you withdraw the money early, so make sure only to deposit what you aren’t going to need during the term.

5. Hire a financial planner

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A financial planner can provide guidance and recommendations on how to manage your finances effectively. They can help you set a budget, create financial goals, and invest wisely.

They can assist with your retirement plan so you know you’re on the right track for a comfortable retirement. It may also be a good idea to bring in a professional to advise you on estate planning.

6. Invest in the stock market

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Investing in the growth of companies and industries provides more potential to grow your wealth in the long term. Although more risk is involved, stocks have historically seen 10% annual returns on average, which may be higher than other types of investments.

Many stocks pay dividends, which can provide supplementary income. It's also an excellent way to achieve a diversified portfolio.

7. Give to charity

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Once you have $50,000 in the bank, you may want to use some of it to help others and your community.

Your contributions can provide essential resources like food, shelter, health care, and education to those who need them. Contributions are also tax-deductible, which can lower your overall tax liability.

Find a cause you believe in and donate or set up a regular contribution schedule.

8. Invest in bonds

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Bonds are a type of investment that lets an investor lend money to an issuer.

They are typically considered safer than many other investments because the principal is returned with interest at maturity as long as the issuer doesn't go bankrupt.

Many bonds deliver regular interest payments, which can provide a steady source of income. Some types of bonds to consider include savings, corporate, treasury, municipal, and international bonds.

9. Start a business

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Do you have any unique skills or aspirations? Consider starting a business! Starting a business can help you pursue your passions and make your own schedule and rules.

With $50,000, you may be able to cover initial expenses, hire employees, conduct market research, and buy inventory. Determine your business startup’s estimated costs using the U.S Small Business Administration calculator.

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10. Buy a rental property

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Investing in a rental property can provide you with a passive source of income. It's also a tangible asset that appreciates over time.

Buying a rental property is a great way to build wealth , earn tax deductions, and diversify your portfolio.

However, property management can be time-consuming, and economic downturns may affect your rental's performance. Researching and assessing the downsides before investing in a rental property is essential.

11. Invest in a mutual fund

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Mutual funds collect money from many investors to purchase securities, like stocks and bonds. Experienced fund managers research, select, and monitor investments for you.

Investing in a mutual fund doesn't require a significant initial investment, so it's accessible for someone with $50,000. They are also highly liquid, so you can quickly move in and out of positions.

12. Pursue higher education

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Having $50,000 in the bank can open doors to higher education, whether it's a degree, certification, or specialized training.

It can enhance your skills and knowledge, increasing your earning potential. More education can help you change career paths, advance your career, or help you open your own business.

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13. Invest in a start-up

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If you're not interested in starting a small business, you may want to consider investing in someone else's.

The funds can help the new business grow and may provide you with substantial returns. However, investing in a start-up is quite risky, so do thorough research and only invest what you can afford to lose.

14. Save for your child’s education

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If you have children in your family, a 529 plan is a great way to save for their future education.

The money can pay for various educational expenses, from K-12 private school tuition to college courses and vocational schools.

A 529 plan also offers tax advantages, like tax-free earnings and withdrawals for qualifying expenses.

15. Contribute to retirement accounts

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Contributing to retirement accounts, like an IRA or 401(k), can help you save for when you retire. With these plans, you often enjoy tax benefits, and sometimes employers will match your contributions.

When you have $50,000 in the bank, you can max out these accounts to take full advantage of the plans. You may even be able to retire sooner than you think.

Bottom line

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When you have $50,000 in the bank, it’s crucial to properly invest that money so you continue to grow your wealth .

One of the worst things you can do is let it sit in a traditional savings account or blow it on something that won’t give you a return on investment, such as shopping or vacations.

With smart investments and diversifying your portfolio, you can continue to move toward financial security and meet your long-term money goals.

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