One million dollars is good amount of money to invest in different ways. I am going to mention today how I would invest it wisely for the best potential ROI (Return On Investment) without taking crazy risks.
Our goal is making more money by leveraging our initial investment. We cannot grow it simply keeping it in a saving account.
Making money through investment requires good research, evaluation of alternative options and finally executing the investment plan.
Important Tips Before Starting:
- Pay off your debt if you have any.
- Evaluate your comfort zone in taking on risk.
- Leave a sufficient amount of money as your emergency fund.
- Benefit from dollar-cost averaging
- Rebalance your portfolio occasionally.
- Track Your Retirement.
- Donate at least a little to the people in need.
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Invest In Yourself
If you have a $1 million dollars to invest start by investing in yourself. It is easier to say than fully comprehend it.
You should invest in books. Although you may be reading books occasionally, try to inhabit a reading routine. It may be difficult at the beginning but I am sure you will love it.
Wealthier people in the world are those reading a lot.
“Leaders are readers”
It is very smart to find high-quality investment educational programs or private mentorships that will help you to sharpen your investment skills.
Investing In Real Estate
Real estate investment is no different than gold, stocks or bitcoin. Every market has its own peak and lows. The only difference between real estate investment, when it is compared with the other types of investments, it is related to an essential human need. Housing is highly important and I wouldn’t recommend anybody investing in something else before purchasing a house to live in.
Prices of the real estate may be high by the time when you want to buy a house. Then you need to wait for a while to let the market cool down. Any type of investment is only profitable if the value of it is higher in the future than it is today. Hence, you want to plan ahead when to buy, hold and sell to profit from real estate.
Proper timing of real estate market requires following strong micro-trends that is affected by the local factors, as well as the macro-trends from a wider perspective.
Make sure you the following points are satisfied before a real estate investment is done:
- Buy below the current market value,
- Buy with a sufficient amount of cash,
- Buy in a location which is primed for growth,
Investing in bonds is simply lending your assets to the government or a corporation so that they can use your money. As a result, you receive a certain amount of interest after a certain period of time waiting. Your ROI depends on the interest rate applied when you lend your money.
Although it is a potentially low-risk investment it can only bring a low return for your capital. It is not one of my favorite types of investments.
However, I would personally allocate %10 of my assets in investment bonds. Because I believe diversification is key for anyone who wants to protect his/her assets and possibly grow it in the long term.
Investing In The Stock Market
Investing in the stock market can be a very lucrative long-term investment for you. It is important to diversify your stock holdings, and checking your emotions at the door. It is a must to spend a good amount of time to research companies that potentially bring the highest returns with the lowest risk possible. “Buying a share of a company’s stock makes you a part-owner of that business.”
Almost all stock market investors have the dream of being the next Warren Buffet. Although it is very unlikely to be like him, it is possible to be a very profitable investment in the stock market investing.
I would invest %15 of my net worth in the stock market if I can spot a good entry to involve in it.
Investing in Precious Metals (Physical Gold & Silver)
Precious metal investment is one of my favourite for the following reasons.
- Precious metals are a store of value and a safety net against a global depression, financial crash or runaway inflation.
- Governments cannot print gold to manipulate the value of your reserved assets.
- Gold is extremely liquid and can be exchanged anytime and anywhere in the world.
- Gold investment is very practical to do. It can be purchased from banks, local shops, etc. There is always a premium charged by the gold dealers on both ends (buying & selling) of the transaction. I will discuss later the much better way of making a gold investment.
Gold is a long term known as “asset of last resort”. There is no one can judge gold’s reliability as one of the best investments ever.
If you plan on having an aggressive stock portfolio, investing in gold can be a good choice to hedge your bet. I would invest %30 of my money in gold and other precious metals.
Investing in Bitcoin & Altcoins
Investing in BTC(Bitcoin) and altcoins(cryptocurrencies other than Bitcoin) are riskier than other types of investments. If you don’t have a risk-tolerant personality, you may skip this section altogether.
Cryptocurrencies are for those who want to make potentially very big earnings in a shorter period of time. Hence, it is considered a high risk & high return type of investment.
If you can spend good amount of time researching the cryptocurrency projects you may make a fortune of it.
You could buy BTC for about $50 – $100 in 2013 depending on what month you have purchased it. Unless you live under a rock, you have heard BTC hit to record high $20K by the end of 2017.
Does it mean will a single BTC hit to $1 million dollars by the next bull market?
I don’t know. No one knows the answer to this question.
People only speculating how much BTC would worth by the next year or 5 years from today because it is fun to talk about BTC.
That being said, I think a lot of altcoins are potentially big opportunities for those looking for a medium, and the long term investment.
Here are good posts that can help you start learning to invest BTC and other cryptocurrencies.
- Should I Invest In BTC?
- Should You Invest In Cryptocurrencies?
- Which Cryptocurrency Exchange You Should Use?
- Are Your Cryptocurrencies Safe In The Exchanges?
Important Tip: Don’t invest any type of ICO (Initial Coin Offering) project since they are extremely risky. Most ICO projects promoted in 2017 turned out to be either exit scam or fraudulent projects.
Investing in Bitcoin Mining
Although I don’t find BTC mining as a profitable type of investment, some people will disagree with me. Here are my thoughts about the profitability of BTC mining.
If you want to invest in BTC mining don’t exceed 1-2 % of your initial capital. It is better if you can buy the Bitcoin mining equipment and do it yourself. It is also fine if you can partner someone else’s already running mining facility.
Important Tip: Stay away from cloud mining businesses. They are extremely risky and you have zero control over so many things you even are not aware of.
Start An Online Business
The future of any business is online. People are no more visiting retail stores to buy stuff, rather ordering from Amazon from the comfort of their living room sofa.
Investing %20 of your portfolio on an actual online business is a smart hedge against the risks. The good thing you don’t need much capital to start an online business.
Some Ideas That You May Be Interested In:
- Content Marketing Agency,
- E-commerce store,
Do Not Invest in Luxury And Extravagant Items
This is a major reason why many wealthy people today are going to suffer from financial instabilities in the future. Living a lifestyle that you cannot truly afford is the biggest trap you can fall into.
Don’t buy expensive Rolex watches or the classical car you dreamed of since 1975.
“If you buy things you do not need, soon you will have to sell things you need.”