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Making your first million big ones may seem like a figment of your wildest and wooliest dreams. Though today, consistent and smart investment practice increasingly leads investors to their proverbial pot of gold.

The first million big ones are always the hardest to make. After you’ve got it – so they say – a few wise investment choices can make your money work hard for you. Then you can sit back with a margarita or three and enjoy your passive income.

If you’re one of the lucky ones who already have a million in hand, congratulations! You’re doing better than most of us. If you haven’t secured your first million yet, but you’re already planning a strategy to make it, congratulations to you as well. The importance of preparing for your financial future could not be understated.

In this article, we will walk you through some of the best ways to invest that million dollars and help you get started on the path to financial success!

What to do Before You Invest a Million Dollars

Before you gleefully skip off to the financial advisor with your million dollars, it’s a good idea to take a holistic look at your financial situation. This includes your monthly cash flow, current debt, and contingency planning for unexpected financial bumps along the way.

You’ll also need to think about your objectives and what you’d like your money to achieve for you in the long run. All of these factors will vary from person to person, so take your time considering the suggestions below. And don’t be afraid to take advantage of investment advisers who can offer independent financial advice.

Pay Off Your Debt

The purpose of investing is to grow your wealth. On the contrary, paying high amounts of interest on debt obligations is counterproductive to the returns you receive from your investment strategy. Before you invest your million dollars, take care of any high-interest debt such as credit cards, student loan debt, and personal loans.

Whether you should aggressively pay off your mortgage is debated. It generally depends on your overall financial situation and how much mortgage you have left to pay. For example, if you have earned your million via a significant rise in your stable income, it may make sense for you to invest that million dollars since there could be room to increase your mortgage repayments over the long term. Even if you’ve received a one-off lump sum of a million dollars, the remaining debt on your mortgage may influence your decisions.

Top Up Your Emergency Fund

Next, it’s a good idea to secure your financial footing by creating an emergency fund to cover at least six months of living expenses. As the global pandemic has taught us, unforeseen circumstances can arise at any time. Having contingency measures in place can help carry us through tough times when they arise.

For instance, unexpected medical bills, natural disasters, and global market shifts can take a hefty toll on our lives unless we prepare for them. Put your money somewhere that it will be liquid and insured, like an FDIC-insured savings account.

Determine Your Investor Profile

Understanding what kind of investor you are is a litmus test for the type of investments that match your objectives. When you know what you hope to achieve by investing your million dollars, when you aim to achieve it, and how much financial risk you can absorb, you’ll have a better idea of what investment approach is most suitable for you. To determine your investor profile, ask yourself the following questions.

What Are Your Goals?

First, determine your goals and write them down. Maybe you’re saving for early retirement, you plan to leave wealth for future generations, or perhaps you want to become a gazillionaire! Keeping one overarching financial objective in mind will guide the decisions you make moving forward.

How about the process? Are you the type of person who loves to dig deep and consistently work at their investing strategy? Perhaps the stock market or real estate rentals are right for you.

On the other hand, you could prefer a hands-off approach. Contributing personal capital to professionally managed commercial real estate investment properties is a great way for people with busy lives to invest passively while receiving high returns and low risk. Alternatively, buy-and-hold mutual funds and index funds may do the trick.

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What Is Your Timeline?

When you clearly understand your financial goals, the next step is to set a timeline to complete your investment. This schedule will determine the duration of your investment. For example, if you’re saving for retirement, a good question to ask is how many years you have before you want to retire?

If it’s still 20+ years away, a long-term investment strategy might be more appropriate. If you need to access your invested funds in under five years, look for a short-term strategy that will yield returns over that period.

What Is Your Risk Tolerance?

Your risk tolerance is determined by your capacity to absorb a potential loss. Every investor has a different tolerance level based on their financial goals. For instance, one individual may be happy to see a 20% short-term loss for a 40% long-term gain, while another would perceive a 5% loss as insurmountable.

Higher-risk investments tend to reap higher rewards when they go well. However, you may also risk losing your entire investment on the turn of a dime. Low-risk investments tend to put your capital into less volatile environments where movements up or down are incremental.

If your end goals are 20 or 30 years down the line, you may be able to take higher risks with your investment since you’ll have more time to make up for short-term losses. If capital preservation is a priority, it is best to put your money in a conservative or low-risk investment.

Plant beside coin and hands on top

Where Can You Invest A Million Dollars?

Now your personal finances are looking sharp, and you better understand what strategy will serve your objectives, we’re going to look at how to invest that million dollars. Bear in mind that a diversified portfolio helps to hedge your funds against overall potential loss. That’s because when one market (such as stocks) gets impacted by flux, other markets (like real estate) don’t tend to shift in the same way.

So let’s take a look at some of your options.

Real Estate Crowdfunding

Real estate investing has always been one of the most remunerative assets to add to your investment portfolio. Real estate crowdfunding platforms are where professional investing experts scour deals on historically profitable commercial assets, then pool investor capital to fund the projects. If you like the idea of investing in lucrative multifamily assets without having to deal with the burden of day-to-day property management, crowdfunding may be the right choice.

There are a range of crowdfunding opportunities to choose from, each with its own area of expertise. Many platforms require you to be an accredited investor to take part. Although if you have a million dollars ready to invest, you already qualify as a high net-worth investor, granting you the keys to opportunities many other investors don’t have access to.

Crowdfunding essentially gives passive investors access to greater returns from more profitable projects, without having to find or manage the deal themselves. If you’re looking for equity in an appreciable asset with reduced risk and regular cash flow, get in touch with the commercial investing experts at ,People’s Capital Group today.

Rental Properties

If you want to build your cash flow with an asset that will appreciate over time, real estate is a great way to invest! Rentals open the doors of portfolio diversification, which could include single-family homes, multifamily properties, land, or other small commercial properties.

Rentals can be considered a hybrid between an investment and a business because they demand regular management responsibilities, and require ongoing expenses for maintenance and operation. With this type of investment, you can generate monthly income and grow investment capital in three ways:

Recurring revenue from monthly rental yield
Equity appreciation as the property value increases over time
Tax advantages, as you write off depreciation and deduct operational and business expenses from your net taxable income.

Investing in a rental property is advisable for those who have the time and experience to dedicate to purchasing the property, finding tenants, managing the property, and resale at the end of the investment term. For this reason, rentals are generally classified as active investments. Of course, you could outsource property management to a third party to make it a partially active investment.

Person holding small house on his hands

Real Estate Investment Trusts

Real estate investment trusts allow people to invest in real estate without actually purchasing a property. Each trust operates like a mutual fund that owns and manages income-producing real estate properties such as office buildings, retail spaces, industrial areas, large apartment complexes, and warehouse spaces.

Some REITs focus on niche assets such as data centers and self-storage facilities, whereas others are diversified across different geographic markets to avoid funds being held in a single concentrated market.

REITs can be a great way to learn for beginner investors. However, they get publically traded on the stock market, which means they are more interconnected with market volatility than a physical real estate asset. When the stock market is down, REIT share prices may drop accordingly. Additionally, they do not offer the same tax advantages as owning a real estate asset.

The Stock Market

If you’re looking to invest a million dollars for long-term capital growth, the stock market may be right for you. Stock investments tend to yield high annual dividends and provide a hedge against inflation. Individuals can invest in exchange-traded funds (EFT) or make a portfolio of individual stocks. The latter is the more active of the two, and you’ll need to open a brokerage account where you will be able to trade stocks.

Because the stock market can be susceptible to large and small fluctuations in value, it’s a particularly good idea to consider the terms of your investment and your risk tolerance when investing in stocks. Stocks have the potential to make significant gains one year, only to experience significant losses the next. A long-term strategy is wise if you’re considering this option.


While stock investments focus on growing your capital, bonds revolve around capital preservation. Bonds come in various products, including corporate bonds, municipal bonds, and US government bonds. United States Government bonds are backed by the government and are considered one of the safer ways to invest a million dollars. This strategy may work better if you need access to your money in 3-5 years, without the risk of a potential loss.

Bonds are great for conservative investments because they guarantee your principal investment back. They are interest-bearing which means that those with short maturation terms tend to fluctuate only slightly. For longer-term investments, bonds will fluctuate according to the changes in interest rates. The return on investment from most bonds will not keep up with the rate of inflation as it is currently high. So this investment option will likely lose money due to high inflation.

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Exchange-Traded Funds

Exchange-traded funds are portfolio funds that invest in stocks or bonds, or they can be index funds that track popular indexes. They operate much like mutual funds because they allow investors a diversified portfolio with a range of stocks rather than stocks allocated to one company. Alternatively, you can purchase shares in an EFT that invests in specific industries, healthcare, technology, commodities, or real estate investing.

If you don’t have the time to research individual stocks and bonds, ETFs will simplify your decision-making process. Additionally, the risk associated with them is minimal, compared to other more volatile options.

However, it’s important to note that ETFs are designed to match the market index they’re invested in rather than outperform it. The advantage here is that they won’t underperform either. Rather, it’s a way to invest in the market without undertaking the risk associated with stocks and bonds.

Invest in a Business

Direct business investments offer a diverse range of opportunities to an investor with a million dollars burning a hole in their pocket. You can choose to purchase a business that you will own and operate, or you can invest passively as a silent partner while earning a profit.

Purchasing an existing business is beneficial in the sense that it’s already up and running and most likely has an established clientele in the market. On the other hand, if you choose to mount your own business from the ground up, you take on more risk but are also exposed to the potential for higher returns. Both of these choices require some level of active engagement in the operational tasks required from business owners.

If you’re seeking a passive route to business ownership, you can invest in an established business seeking capital growth as a silent partner. You can negotiate equity in the business, as well as entitlement to a percentage of future income the business produces. Should you take this route, do due diligence on the business you want to invest in and make sure you trust the operation capacity of the current owner.

Private Lending

Private lending, or peer-to-peer lending (P2P), is a good way to earn higher returns than other investments based on the interest rate you charge. This method entails offering your funds to an individual or private entity for a negotiable interest rate. You may yield higher returns than traditional stocks and bonds. However, the money is typically less liquid as the loan may be tied up for several years.

There are many online platforms available that connect private lenders with individuals that wish to solicit a private loan. Short-term loans may be sought by individuals for home improvements or debt consolidation. Alternatively, companies may seek a private business loan to expand commercial operations or purchase more equipment.

Private lending comes with a higher risk than real estate investing due to the potential for default from individuals and businesses. It is wise to pay due diligence on the loan recipient and is not recommended to tie up the entire sum of your money in private lending. However, if you’re willing to take the risk, investing a portion of your portfolio can increase your overall returns.

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Final Thoughts

Investing a million dollars may seem like a daunting task. And it’s true that if you want your money to work hard for you over the long term, there is a fair amount of consideration and due diligence involved. That said, the overall gains you can experience by making a few wise choices that perfectly suit your financial goals will be well worth the effort.

Keep in mind that diversification is key. Many busy professionals don’t have the time to commit to researching funds and making background checks for traditional investments to achieve diversification. That’s why working with professional investors in highly profitable, stable, and diversified passive investments is such a popular option!

People’s Capital Group has been investing in historically profitable real estate ventures for more than 30 years. They make investment simple for passive investors by managing the day-to-day operations of projects, while individuals create multiple income streams and gain equity in appreciable assets. If you want to invest a million dollars the easy way, talk to ,People’s Capital Group today to get started.

Aaron Fragnito

Aaron Fragnito

Aaron has been helping people invest in Real Estate for over 10 years. He is a Co-Founder of Peoples Capital Group (PCG) a real estate investment and holding company. He is a full time real estate investor, as well as, the host of the New Jersey Real Estate Network and host of the Passive Cash Flow Podcast. Aaron has previously completed over 100 real estate transactions as a realtor and another 150 transactions in his current role as a real estate investor.

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