Payday is a week away, but you have expenses today. Yet again you’re going to have to make a payment or two late, but you start thinking what you would do with a million dollars. If you won the lottery or whatever and got that money what would you do?
Ways To Invest A Million Dollars
Some say they would buy cars, houses, or go on a huge vacation. But if you wanted to continue to live off that million you’re going to need to invest it.
Considered the “safest” of ways to invest. You simply put money in and gain a little interest every month. Most savings accounts, however, have a small interest rate usually less than 2 percent.
Meaning that on a million dollars you’ll only get around $20,000 a year. Not really enough to live off of, but it would make it so you could work less at your full-time job, maybe even work part time.
This is where the big boys (and girls) play. Instead of just putting money in a savings account, the stock market provides a lot more growth.
The average return for the stock market is about 7% meaning your money will grow by $70,000 a year. If you invest in dividend stocks you’ll receive around 4% or $40,000 without ever selling your stocks. In essence, you’ll be paid $40,000 and your money will be worth $70,000 more so your annual “pay” would be $110,000.
There are many types of real estate investing, but for simplicity, we will focus on just two.
First, we have house flipping. Essentially you buy a house that’s in a good neighbourhood but is run down and as such is selling for cheap. You then either fix it up yourself or hire someone to do it. After the property is up to par with the neighbourhood you now sell it for more than you paid for everything and pocket the profits.
For some, this is their full-time job (just watch HGTV) and you can make a lot of money doing it. But it can also be very stressful.
The second way to make money through real estate is to buy a property and rent it out. This seems straight forward, but buying something and making sure that there is always someone living there to pay the rent can be stressful.
What’s Best For You?
No one but you can know what will work best for you. The no stress way to invest is the savings account, but you’ll also not make much. Dividend investing is great but brings its own stress, and you’ll have to watch your investment go up and down with the market. Real estate involves a lot of money up front before you see anything in return.
Can I Live Off The Interest On A Million Dollars
Yes, you can live off the interest on a million dollars. You may have to cut back on some things if your income is about the national average, but it can be done.