How To Invest 50k - The Ultimate Guide - Up the Gains (2024)

Invest / Last Updated On: 7th November 2023 / By Sammie Ellard-King

How To Invest 50k - The Ultimate Guide - Up the Gains (1)

How To Invest 50k - The Ultimate Guide - Up the Gains (2)

Sammie Ellard-King

I’m Sammie, a money expert and business owner passionate about helping you take control of your wallet. My mission with Up the Gains is to create a safe space to help improve your finances, cut your costs and make you feel good while doing it.

How To Invest 50k - The Ultimate Guide - Up the Gains (3)

Quickfire Roundup:

50k is a great initial investment and opens you up to a wide range of investment options.

With 50k you want to be looking at creating the foundations for lasting wealth so this could mean looking at both the stock market and potentially property investment alongside this.

The best investment option for you depends on your long-term goals, financial situation, and risk tolerance and if you’re new to investing I suggest spending time with an advisor to ensure you get your decisions right.

50k is a potentially life-changing amount of money to come into, and investing it can help you get there, but what are the best ways to invest 50k?

Technically speaking, investing 50k is no different from investing 20k because it is what you do with the money counts.

From finding an experienced financial advisor to perfecting your investment strategy, the decisions you make can determine your investment’s outcome.

In this article, I’ll discuss how to invest 50k!

Table of Contents

How To Invest 50k?

You can invest 50k in stocks, bonds, property, funds, or commodities. £50k is a great initial investment, but you must know what to invest in, and how to do it.

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After setting up an investment account, here are just some of the investments you could consider:

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The only way to beat inflation is to invest in higher-yielding asset classes.

An investment account almost always provides a better return than a simple savings account in fact, the average yearly return from the S&P500 (the 500 biggest stocks in the US) is 9.7% over the past 100 years.

You can calculate your predicted return using a compound interest calculator.

However, before you decide where you’re going to invest your 50k, you must decide what you want out of it.

There are some short term plays such as individual stock picking or cryptocurrencies but these can be much higher risk against something like exchange traded funds (ETFS) and index funds.

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Is 50K a Decent Investment Amount?

Put simply, yes.50k is an excellent amount to invest and gives you the freedom to choose between several different investment products.

The median average salary in the UK was £33,000 at the end of 2022, meaning that, for most people, 50k is almost two years of wages.

However, just because you have a sizable investment amount doesn’t mean you’ll get a better return.

The investment size isn’t always the most important thing, it’s what you do with the money that counts.

Before you invest, you must also make sure you have fully researched your options and assessed your risk tolerance.

Still scared? Don’t worry.There are hundreds of investment apps out there designed to help beginner investors take their first step into the world of investing.

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Is Investing Right for You?

According to a recent survey, 28% of Brits felt investing was too complicated.

There is a common misconception that investing is only for the ultra-rich, but this isn’t the case. Some investments can be made with a minimum deposit of £1.

Here are some key points to consider to know if investing is right for you:

  • Investing is a good fit for you if you have long-term financial goals and are willing to take on some degree of risk to potentially earn higher returns.
  • You should have a solid understanding of the different types of investments available and the risks and potential rewards associated with each.
  • It’s important to have a plan in place for how you will invest, including how much you will invest and how often, and to regularly monitor and adjust your investments as needed.
  • Diversifying your investments is crucial because it helps to spread out your risk across a variety of assets, reducing the impact of any single investment’s performance on your overall portfolio.

In other words, don’t put all your eggs in one basket – diversification can help you maximise your returns and minimise your losses.

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What Is the Best Way to Invest Money?

Investing can be a daunting task, especially when you have a substantial sum of money like 50k.

The good news is that there are several investment options available, from stocks and bonds to property and commodities.

However, it’s essential to choose an investment strategy that aligns with your risk tolerance and time frame. Working with a financial advisor can help you create a solid investment plan that meets your financial goals.

While some investors swear by the stock market, it’s important to note that investing in the stock market can be volatile.

If you do choose to invest in the stock market, you may want to consider pound-cost averaging (PCA). PCA is a great way to smooth out market fluctuations and reduce the impact of volatility on your investment.

By investing a fixed amount of money at regular intervals, regardless of the market conditions, you can buy more shares when prices are low and fewer shares when prices are high, averaging out the purchase price over time.

Alternatively, many investors turn to property as a long-term investment.

Investing in property can provide a steady stream of income and, if done correctly, can lead to significant returns. The key is to do your research and invest in an upcoming area with strong growth potential.

Ultimately, the best way to invest 50k is to create a solid investment plan that aligns with your financial goals and risk tolerance.

With the right strategy and a little patience, you can turn your 50k into a valuable asset that provides steady income and long-term growth.

How to Spread Investment Risk

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Investing is all about how much risk you’re willing to tolerate. Here are some ways you can spread investment risk:

Diversify your investment portfolio

This is one of the most popular snippets of investment advice but it’s because it’s true. For example, if you only invest in one asset and it crashes, you will lose most or all your money.

Diversify your portfolio by investing in a range of companies, industries, countries, and asset classes.

Invest in a tracker fund

Tracker funds are index funds that track market indices like the Nasdaq, S&P500 or the FTSE. This can help you spread risk because you can invest in various different stocks and won’t be as affected by the individual performance of each stock.

Know your investment goals

Knowing what you want to achieve can help you decide what assets to invest in. For example, if you want to save for an upcoming life event, low-risk investments can guarantee you won’t be out of pocket when the time comes.

Or if you’re saving for retirement, you could get away with having a higher risk tolerance and opting for more high-risk investments.

Monitor your investments

Investment markets can rise or fall at the drop of a hat. The best way to avoid a high-risk situation is to keep a close eye on your investments as often as possible.

There are various portfolio trackers out there designed to help you monitor your investments. Most of them come in built into your investment accounts.

How to Invest 50k in an ISA

There are several ISAs where you can invest 50k, but a stocks and shares ISA is probably your best bet.

Cash ISAs are essentially saving accounts free from capital gains tax but stocks and shares ISAs act as a tax-free wrapper and let you invest in a range of assets.

This can be done through a bank or building society, or, if you prefer, an online investment platform. Some financial advisers can also help you set up a stocks and shares ISA.

Before you invest 50k in an ISA, you must know what to expect from your investment.

There is a maximum allowance of £20,000 that can be paid into an ISA within a tax year. This can be divided among several ISAs but you can’t put money into the same type of ISA twice in one year.

Unlike taxable investment accounts, ISAs are tax-free which means you get to keep the total return made on your investment.

The money in your ISA also doesn’t always equal your total investment amount. So if you were to pay the maximum allowance and the value of the money dropped, you couldn’t top it up until the following tax year.

GIAs are also recommended for big amounts like 50k because there is no upper limit. You can of course maximise both an ISA and a GIA.

FAQs

How much interest will 50k earn in a year?

Most accessible saving accounts will earn about 2% interest a year but investing can produce bigger long-term gains.

Can I invest in property with 50k?

50k is often the minimum amount investment experts would recommend is needed to purchase an investment property.

It is possible to invest in property or commercial real estate with less, but 50k will give you better security and stronger capital growth.

What is the best way to invest 50k?

Investing isn’t a one-size-fits-all approach and there is no right answer.

The best investment for you will depend on your long-term goals, financial priorities, and investment history. I believe that investing in property is the best option.

Final Thoughts

50k is a solid investment amount but the best way to invest 50k comes down to your financial situation and long-term goals.

Whether you want to save for a holiday or retirement, longer-term investments tend to have more risk.

Before investing, consider your options and have an emergency fund in place. Reach out to a financial advisor for investment advice if you have any questions.

MORE LIKE THIS

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  • How to invest 40k

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Disclaimer: Content on this pageis for informational purposes and does not constitute financial advice. Always do your own research before making a financially related decision.

Greetings, I'm an experienced financial professional with a deep understanding of various investment avenues. Throughout my career, I have helped individuals make informed decisions about managing their finances and creating wealth. My expertise extends across stocks, bonds, real estate, funds, commodities, and other financial instruments.

Now, let's delve into the concepts mentioned in the article by Sammie Ellard-King, who is a money expert and business owner. The article provides valuable insights on how to invest £50,000, discussing various options and considerations for individuals looking to grow their wealth.

  1. Investment Options:

    • Stocks: Ownership in a company, bought from a stock exchange.
    • Bonds: Issued by companies to raise money; investors receive interest.
    • Property: Buy-to-let properties, REITs (Real Estate Investment Trusts), or paying off a mortgage.
    • Funds: Collective investment in securities, such as mutual funds and money market funds.
    • Commodities: Raw materials like gold, silver, and energy.
    • Savings Accounts: Though popular, they may not beat inflation, and higher-yielding assets are often recommended.
  2. Investment Account Returns:

    • An investment account typically provides better returns than a simple savings account.
    • The article mentions the average yearly return from the S&P500 over the past 100 years, emphasizing the potential for higher returns.
  3. Investment Amount and Considerations:

    • £50,000 is considered an excellent amount for investment, offering flexibility in choosing various investment products.
    • The importance lies in how the money is invested, and thorough research and risk assessment are crucial.
    • The article highlights the misconception that investing is only for the ultra-rich, emphasizing that some investments require a minimum deposit as low as £1.
  4. Investing Decisions:

    • Consideration of long-term financial goals, risk tolerance, and understanding different investment types are emphasized.
    • Diversification is crucial to spread risk across various assets and maximize returns.
  5. Investment Strategies:

    • The article suggests considering stocks with pound-cost averaging to mitigate market volatility.
    • Property investment is recommended for steady income and potential long-term returns, with a focus on research and growth potential.
  6. Spreading Investment Risk:

    • Diversify the investment portfolio across companies, industries, countries, and asset classes.
    • Consider investing in tracker funds to spread risk across various stocks.
    • Know your investment goals and monitor investments regularly.
  7. Investing in an ISA (Individual Savings Account):

    • Consideration of Stocks and Shares ISA, which acts as a tax-free wrapper for investing in a range of assets.
    • The article explains the maximum allowance of £20,000 per tax year and the tax benefits associated with ISAs.
  8. FAQs:

    • Answers to common questions, such as expected interest on £50,000, minimum investment for property, and the best way to invest £50,000.
    • Emphasis on individualized investment decisions based on goals and financial priorities.
  9. Final Thoughts:

    • The article concludes by emphasizing that the best way to invest £50,000 depends on individual financial situations and long-term goals.
    • It encourages careful consideration of options, having an emergency fund, and seeking advice from financial advisors.

In summary, the article provides a comprehensive guide on investing £50,000, covering various options, strategies, and considerations for individuals seeking to make informed financial decisions.

How To Invest 50k - The Ultimate Guide - Up the Gains (2024)

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