Receiving a huge sum of money is something you think will never happen to you until it does. And sometimes, it might happen as a result of unfortunate circumstances like a death in the family.
Having a huge sum of money might make you reckless and wasteful especially if you don’t have a useful plan before receiving it. This article will teach you reasonable ways to spend a huge sum of money.
List Of What To Do With 6000 Dollars Explained
So you have about $6000 in your savings account or you recently came into money as huge as $6k. Unless you acquired the money through illegitimate ways, you have to think of useful ways to use the money.
Here are useful ways to spend $6000
Even though the $6000 might have been acquired through your saving plans, it doesn’t mean you should stop saving once you reach a huge amount.
Having an adequate amount of savings will make you feel comfortable and prepare you for unplanned expenses. You can also use your savings to step up your comfort level, such as getting a new apartment or buying a new ride.
- Clear your debts
The wisest course of action is typically to use some of your $6,000 to pay down high-interest credit card debt or other loan debt. That’s because you’re losing money due to the high-interest rates applied to most consumer loans and credit cards.
Paying off your debt is very financially savvy and makes you financially buoyant.
- Increase your mortgage payments
Let’s say you have a $200,000, 6%, 30-year fixed mortgage. Just $100 more each month might reduce your loan balance by almost $19,000, and you might even be able to pay off your debt three years earlier.
- Start a college fund
Adding $6k to your child’s college fund is another wise use of the money. Any assistance you can provide to cover these costs will help your kids reduce their reliance on student loans as the cost of college keeps rising.
- Open an individual retirement account (IRA)
Whatever a person is doing, it is always beneficial to have a retirement plan for when they get older. Opening a retirement account is another way to spend one’s excess cash flow.
Individual retirement accounts (IRAs) come in two varieties: regular and Roth. The primary distinction is how contributions and withdrawals are taxed. A typical IRA allows you to deduct contributions from your taxes each year, but retirement withdrawals are taxed.
You can fund a Roth IRA using after-tax money while avoiding paying taxes on your withdrawals. The 2022 contribution limit for both IRAs is $6,000, or $7,000 for individuals 50 and older, the same as it was for 2021.
In today’s economy investing is a sure way to make money without having to worry about the stress and hassle of running a business. All you have to do is look for a company that is interested in investors, check its memorandum of operations and see if its business strategy is likely to achieve its goals.
When it comes to investing, the choices are endless. investment in real estate, stock purchases, retirement account contributions, etc.
Where Can I Invest $6000?
There are numerous ways to invest your money. While investing has its advantages and disadvantages, it is important to know that investments are speculative and past results should never be understood as indicators of future performance.
Nonetheless, here are ways you can invest your $6000.
Cryptocurrency is still new to most people, but it’s safe to say it is one of the most lucrative ways to make money without having a huge amount.
There are hundreds of coins and tokens you can purchase and start trading with. It is important to know that the crypto market is very volatile and risky. Before venturing into the crypto space make sure you’ve done enough research and analysis.
There are lots of platforms that enable you to trade on the crypto market. Examples are Binance, Coinbase, Kraken, Iqoption, and many more.
- Non-fungible tokens (NFT)
Nfts is a new addition to the crypto space. Even though it has been in existence since 2014, it’s been the talk of everybody recently. In 2021 alone, about $41 billion worth of cryptocurrency was spent used in the buying and selling of Nfts.
There are a lot of NFTS that you can buy for as low as $100 and resell for a lot of money. You can also create your nft and put them out on platforms like opensea, metamask, and many more.
Even though Nfts are in the crypto space, they are very different from cryptocurrency.
- Mutual funds
Mutual funds have been a tried and true way of diversifying your investments. Mutual funds can have a broad focus, like an entire index of stocks, or a very narrow focus, like investing in the energy industry.
The only downside to mutual funds is that the minimum amount you need to have before investing in them is $3,000.
ETFs mean exchange-traded funds and it gives you the option to purchase hundreds of investments the same way you’ll buy a single stock.
- Worthy Bonds
You can invest with Worthy bonds in the short-term debt of small companies. They achieve this using corporate bonds, which assist these companies in bridging a cash flow gap.
The assets of the corporation that guarantees the debt are used to support the bonds. If a company were to stop making payments on its debt, Worthy would seize the asset, sell it, and give you your money back. – The bonds have a 5% yield, which is very good for a safe investment.
People can invest in real estate with Fundraise without having to purchase, maintain, or sell an actual property.
You put money into one of Fundrise’s several real estate investment trusts after creating an account with them. Your money is then invested for you in other real estate ventures.
While you diversify your investments into real estate and earn a healthy return on your capital, Fundraise handles all the labor-intensive tasks.
A company called Betterment handles all of your investing on your behalf. Betterment, one of the leading Robo-advisors in the US, uses the data you submit to create an investment strategy that fits your needs and risk tolerance.
The account will invest and rebalance your portfolio for you once you start making deposits. Through tax-loss harvesting, the platform even reduced the amount of taxes you pay.
For people who are completely new to investing or like to take a hands-off approach to their money, it is a fantastic option.
- Stocks with Public.com
Investing in individual stocks can be one of the most profitable investments on this list; One of the most rewarding investments on this list, but also the riskiest, is investing in individual stocks.
It takes time to study your stock investments and diversify over several stocks to ensure that the failure of one of them does not ruin your entire portfolio. By enabling you to purchase fractional shares, Public.com simplifies the diversification process.
No matter what the full share stock price is, fractional shares let you buy as little as $5 worth of stock.
You could purchase $100 worth of Netflix stock through Public, $50 worth of Disney stock, and so on. The public does not charge any fees for your trades, and you diversify your stock investments by not putting all of your eggs in one basket.
Following the instructions in this guide, you should be able to know what to do if you have $6,000, and also if you choose to invest, you should be able to decide on what type of investment you want to venture into.