How to Invest $80k: 16 Best Ways to Use $80,000 in Cash

Are you looking to invest $80K? These are smart ways to invest $80,000 and minimize risk.

Looking to learn the best way to invest 80k safely? Lucky you. If you need some help on how to invest $80,000 and avoid risk, letโ€™s get to work.

Because if you are reading this article, then it probably means you are either working actively towards amassing wealth to the tune of 80k (by investing smartly) or youโ€™re fervently hoping to win the lottery someday.

Either way, itโ€™s smart to learn about how to invest and not spend this huge amount even before it hits your account. The reason is that $80,000 will not guarantee financial security unless the money is invested in ways that allow it to compound.

So itโ€™s important to invest your 80k with caution with a recession looming.

How to Invest 80K Safely

Before that $80,000 burns a hole in your bank account, letโ€™s work on investing it.

1. Pay off your debt.

The easiest way to invest your money is by paying off debt. It may sound odd but paying off your debt is the first and biggest investment you can make with $80,000 in your account. The interest on any debt you have grows with time and the sooner you pay it off, the more you will save.

You should know that the secret to success isย paying off debt. Sure you canย cut expensesย and spend less, butย getting out of debtย is a worthy goal. Before you go off and invest $80,000, make sure your debt with the highest interest rates is paid off, in many cases that is going to be credit cards.

โ€œSo before you go dip your chunk of money into stocks, youโ€™ll likely get a better return on your money if you pay off your high-interest consumer debt.โ€

According to the latest reports, the averageย credit card interestย rate is 17.98% for new offers and 14.58% for existing accounts. While the average stock market return for 10 years is 9.2%, according toย Goldman Sachs dataย for the past 140 years.

Are you picking up what Iโ€™m putting down? Or is your credit card debt all paid off? Letโ€™s move on.

2. Portfolio management.

If you are working with $80,000 in liquid cash โ€” you are considered a high-net-worth client who would benefit from a personal touch. With that amount of capital, you can start investing withย Empower.

Empower has two options. The first is a free planning tool that collects information from your financial accounts,ย calculates your net worth, and helps you make improvements to increase returns. Thatโ€™s a great option for anyone, no matter where you bank or invest.

The second option is using their asset management service which has a minimum account size of $100,000 to start. Once you join, you can get help setting goals for your money โ€” primarily for your retirement. If you invest your money here, the app will invest your money based on the Modern Portfolio Theory (MPT) which ensures true diversification and they go a step beyond tax-loss harvesting. They will optimize your tax burden and your portfolio will be tax-efficient.

According to the companyโ€™s own tests, they outperformed the S&P 500 by more than 1.5% annually with lessย volatility. Overall, it is a safe bet toย open an Account at Empowerย to help you grow your $80,000 safely.

3. Real estate.

Oneย joint studyย by the University of California and the German central bank found that over the last 145 years, real estate offered the highest returns of any asset class. Even better, it did so with far less volatility than stocks.

As such, one of the easiest ways to grow your money is by learningย how to invest in real estate. Robert Kiyosaki, author of โ€˜Rich Dad Poor Dadโ€™ learned to quickly grow his money by making down payments for rental properties and gaining profit by selling the property later at a higher price.

Another way to invest in real estate is by buying a property and renting it with companies likeย Arrived. With the ever-increasing inflation rate, rents will go up while your mortgage payments stay the same. This increases your cash flow and your rental yield as an investor.

You could also invest your 80K in raw lands withย FarmTogether. Investing in lands is a profitable venture because of one key reason: land is scarce and its demand will always exceed its supply which makes it one of theย best assets to build wealth.

4. Index funds.

Investing in index funds is likeย investing in the stock marketย without taking on too much risk. The risk of investing in index funds is very minimal yet the benefits are massive. The trick is to diversify your stocks by buying the largest companies through your index fund.

According toย Bankrate, the best index funds to own this year are as follows:

  1. Fidelity ZERO Large Cap Index (FNILX)
  2. Vanguard S&P 500 ETF (VOO)
  3. SPDR S&P 500 ETF Trust (SPY)
  4. iShares Core S&P 500 ETF (IVV)
  5. Schwab S&P 500 Index Fund (SWPPX)

These index funds track the S&P 500 Index Fund and offer you a way to invest your $5,000 in stocks of the S&P 500 at a low cost, while still enjoying diversification and lower risk. Youโ€™ll still want to monitor the broader markets by usingย unbiased financial newsย to reallocate when necessary.

5. Mutual funds.

Another way to invest your $80,000 in the stock market is through mutual funds. A mutual fund is an investment vehicle that holds a portfolio of stocks, bonds, or other securities.

Since they hold many different securities, it makes it a very attractive investment option for someone who has $80,000 to invest. Investing your money in a mutual fund instead of individual stocks means you get diversification, convenience and lower costs. Plus, you donโ€™t have to spend much timeย researching stocksย as the best mutual funds are well-known.

According toย Investopedia, the top 5 biggest mutual funds in the stock exchange are:

  1. Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX)
  2. Fidelity 500 Index Fund (FXAIX)
  3. Vanguard Institutional Index Mutual Fund (VINIX)
  4. Fidelity Government Cash Reserves (FDRXX)
  5. Vanguard Federal Money Market Fund (VMFXX)

Some people may wonder how mutual funds are different than index funds? An index fund only seeks market-average returns (safe), while active mutual funds have fund managers that try to outperform the market. This means that the fees for active mutual funds are higher than index funds and less predictable returns.

Related:ย VUG vs QQQ: Which is Better?

6. Max out your retirement accounts.

You can invest in index funds and mutual funds in your retirement accounts and shoot for maxing out these accounts.

If your employer offers a 401(k) that matches employee contributions, and you arenโ€™t currently contributing enough to earn that match, let your extra 80k free up some space in your budget so you can do so.

The other option is toย open a Roth IRAย or traditional IRA and contribute to it. These retirement accounts do have annual contribution limits โ€” $6,000 in 2022 ($7,000 if age 50 or older). You can pad these retirement accounts in order to help prepare yourself for retirement down the road. Your retirement accounts commonly invest in index funds and ETFs, mutual funds, and are low-risk investments because your investments are diversified.

7. Start a business.

Invest your 80k in that promising business venture you put on the back burner for lack of money. If it is a high-risk business be sure to conduct research into your prospect, seek expert advice and develop a solid business plan before starting out.

Of course, the amount of money required to start your business depends on your business model and industry. However, a 2009 study conducted by the Ewing Marion Kauffman Foundation puts the average cost of starting a business is around $30,000, leaving you $50,000 for other investments.

Alternatively, starting a business with no money might initially seem like a far-fetched idea, but itโ€™s not impossible.ย You can even use aย personal loan to start a business, in certain situations. The bottom line is that nothing is stopping you from launching a business.

8. Invest using a robo advisor.

Why not put some of that $80k to work with a robo-advisor? Instead of keeping all your money in one place, diversifying can help reduce risk and maximize returns.

When I had a large sum of money to invest recently, I allocated part of it to robo-advisors, and Iโ€™m glad I did. After comparing options, Acorns stood out as my top choice. It offers low costs, automated investing, and strong performance without the hassle of managing everything yourself.

With Acorns, you donโ€™t have to worry about picking investments. The app analyzes your age, goals, income, and risk tolerance, then selects one of five portfolios, ranging from conservative to aggressive.

Acorns costs just $3 per month, but if you sign up today, youโ€™ll get a $20 bonus investment, essentially covering your first six months for free. Why not take advantage and start growing your money now?

9. Invest in yourself.

Investing in yourself is one of the best investments you could ever make and it can take many forms: pursuing a creative project, nurturing a talent taking a course, learning a new skill or pick up a new side hustle toย make $1,000 fast.

While you wonโ€™t likely spend $80,000 by investing in yourself, when you put your wellness first, your energy and production will increase at work which will yield better results and more revenue overall.

10. Annuities.ย 

This is a low-yielding investment that could pay as low as 3% on your capital. An annuity is a way to supplement your income during retirement.

Annuities can be a smart option since it provides regular payments, tax benefits, and a potential death benefit. The other advantage is that your capital is kept safe and your returns are guaranteed.

11. Donate to charity.

One of the best ways to invest 80K is to make an impact in the lives of the less fortunate through charitable giving. Investors who are into impact investing also get tax deductions. Most all charitable organizations qualify for a charitable contribution deduction.

You may deduct charitable contributions of money or property made to qualified organizations if you itemize your deductions. Generally, you may deduct up to 50 percent of your adjusted gross income, but 20 percent and 30 percent limitations applyย in some cases.

12. Invest in an emergency fund.

One wise thing to do once you have your 80k in hand is to set up an emergency fund or fund it if you already have one. It will shield you from lifeโ€™s unpleasant surprises.

As you may have guessed, there are so many ways to invest your $80,000 with confidence. You might choose one particular method, or you might choose to diversify. Just make sure to invest somehow so you can offset inflation and your wallet will thank you for it!

13. Treasury bonds.

Treasury bonds can be an excellent investment for those looking for safety and a fixed rate of interest thatโ€™s paid semiannually until the Treasury bonds are a safe and reliable way to invest, offering steady returns and government-backed security. They pay semiannual interest and return your full principal at maturity, making them a great option for long-term stability.

Whether you're looking to diversify your portfolio or simply want a low-risk way to earn passive income, Treasury bonds can be a smart addition to your financial strategy. While TreasuryDirect has traditionally been the go-to platform for purchasing these bonds, it has limitations, including a complex interface and restrictions on transfers.

Public offers a modern, user-friendly way to invest in Treasury bonds with as little as $100, making it more accessible than traditional platforms. Instead of dealing with complex systems, Public lets you invest in fractional bonds and build a diversified Treasury bond ladder with maturities ranging from 3 months to 30 years. This approach provides steady returns while keeping your investment strategy flexible.

With competitive yields, currently up to 6.7%, Public simplifies the process of investing in bonds without the hassle of outdated platforms. Whether you're looking for a low-risk way to grow your money or aiming for long-term financial stability, Public offers a seamless and accessible way to put your money to work.

14. Peer to peer lending.

This is a way to make a direct impact on the lives of people. This is how it works: you sign up on a platform like LendingClub or Prosper and start giving loans to peers registered on the platform. You can buy into a thousand different loans to spread out risks and earn a profit in the form of interest.

15. Invest in cryptocurrency.

Diversification is a key principle of investing, and cryptocurrency has become an increasingly popular asset class for those looking to expand their portfolio. While Bitcoin, the largest cryptocurrency by market cap, has seen significant fluctuations in value, many investors see these price movements as opportunities to enter the market at a lower cost.

For those new to crypto, Coinbase offers one of the easiest and most secure ways to start investing. The platform provides a user-friendly experience, allowing you to buy, sell, and hold Bitcoin and other digital assets with just a few clicks. With built-in security features, educational resources, and an intuitive mobile app, Coinbase makes it simple for beginners to enter the world of cryptocurrency.

It also offers the ability to set up recurring investments, helping investors gradually build their crypto holdings over time. Whether you're looking to make a one-time purchase or take a more long-term approach, Coinbase provides a seamless and reliable way to get started.

16. High-yield savings account.

If you're looking for a risk-free way to invest your $80,000 while still earning a competitive return, a high-yield savings account is a smart choice โ€” especially one that outperforms the average bank account.

The CIT Platinum Savings account stands out as one of the top options, offering an industry-leading 4.10% APY for balances of $5,000 or more. For comparison, the national average savings rate lags far behind at 0.41% APY.

With zero market risk and passive interest accrual, this is an optimal place to park your cash while maintaining full liquidity. Unlike traditional savings accounts that barely keep up with inflation, CITโ€™s high-yield structure ensures your money grows efficiently.

If you're serious about maximizing returns while keeping your capital secure, this is one of the smartest moves you can make.

Things to Keep in Mind Before You Invest $80,000

Before investing $80,000, take a deep breath and go over your financial situation. Do you have any pressing financial issues that you need to deal with? Before investing this money thatโ€™s liquid, you should make sure everything else is in order.

This generally means that you already have an emergency of three to six months set aside, you are paying down debt already, and you need to understand what type of investor you are.

Because you only know your risk tolerance, so that alone will help you decide which way you want to invest your money.

Whether you want to use it as a down payment on a rental property, pay off some expenses, invest in a CD, or a taxable brokerage account, itโ€™s all up to your risk tolerance.

If youโ€™re looking to invest a larger amount of money, you can seeย how to invest $150kย safely.

For you: What ways have you found to invest or which best way to invest 80k safely did you like best?

Brian Meiggs
Brian Meiggs
Brian Meiggs is a personal finance expert, and the founder of Smarts, a personal finance site helping you easily explore your best money options. He helps readers follow the smart money in order to increase their earning potential and start building wealth for the future. He regularly writes about side hustles, investing, and general personal finance topics aimed to help anyone earn more, pay off debt, and reach financial freedom. He has been quoted as a top personal finance blogger in major publications including Business Insider, Yahoo! Finance, NASDAQ, Discover, and more.
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