If you are someone that has been fortunate enough to either inherit or earn over a million dollars you are extremely lucky. Most of us can only dream of possessing such a large amount of money, but with increasing wealth comes increasing responsibility. Anyone that has been lucky enough to have that amount of money in the bank will all agree on one thing- investment is the best way forward.
It can be extremely tempting to decide to keep the full sum of a million dollars as that sheer amount of money feels as though it can last forever. Unfortunately, that’s not the case and if you were to live independently on a sum of a million dollars, you would quickly see your bank balance decrease. There are hundreds of potential unexpected costs that you may find, so the best thing that you could do with your wealth would be ensuring that the money that you lose quickly replenishes. Investing is obviously the best way to ensure this, but understandably the concept and process of investing such a large sum of money can be overwhelming.
We are more than aware of just how staggering investing such a vast amount of wealth can be and so we have put together a short guide based on how to handle a million-dollar investment.
Make Multiple Investments
If you are looking at investing a sum of a million dollars, the first rule you should follow is not investing all of your money into a single business or organization. Ignoring this can be detrimental to the safety of your money, as it is extremely for any business to go under and you could lose your investment during this process. Instead of investing a big amount of money into a single business, you should invest small amounts into multiple businesses. This way your money will be in a safer position and it also gives you the chance to get a feel of a certain company. Keeping on top of your wealth management can be a tricky business, so the best thing you can do when investing your money into companies is to take it slow. Investing in several businesses can really help with that, as if you invest a small amount in a single business you will be able to gain insider knowledge of how they operate and if you are making good returns on your small investment. If this initial investment is proving to be successful, you can invest more in the future and make even better returns.
Following the multiple investment rule can also be extremely beneficial in another sense. If you have a small investment in a business and you notice that it is not achieving the returns that you expected it will be easier to sell your stocks. If a business is clearly struggling, investors will be far less likely to buy big shares than smaller shares, so you would have that sense of reselling security.
Secure a Consistent Income
Before you even consider investing your money in start-up businesses or passion projects, you have to make sure that you have a consistent income. A consistent income will give you a sense of security and will ensure that you aren’t just continuously hemorrhaging money. Again, this is another area that people often struggle with when it comes to investing your money, but it is important to note that you will only find security in assets that you own and so simply investing in pre-existing businesses is not secure enough.
One of the best ways that you can ensure that you have a secure income is by investing in property. Property is always a go-to for those who have experience with working with large sums and is one of the most secure income forms that you could own. People will always need somewhere to live or buildings to house their businesses in, so the property will always give you the opportunity to get some money back. There are a lot of possibilities with house investments too, which makes it a versatile way to make the most of your investments. You could rent out the properties that you own or you could buy property at a lower price and then ‘flip it’. Doing the latter is only really recommended for those of you that enjoy the process of home improvement, but if you have the right connections, a lot of money can be made.
Put Aside a Retirement Fund
It is very easy for money to come and go and there are hundreds of examples of individuals thinking they will always have financial security and then losing it all. It could happen to anyone for a number of different reasons and so you should always keep that in mind. If you have a million dollars that you can afford to invest, automatically you should take at least a quarter of that and put it aside. Keep this amount within a separate account where it can build up interest and be accessed in the future. This way you will always be secure in the knowledge that you have a substantial amount of money to fall back on, which is something that a lot of people do not take into account.
No matter what you do with your wealth, you should always make sure that you get a second opinion as it is easy to miss errors or even investment opportunities.