“If you have 1 Million US Dollars, how would you invest it?” This is the question that some visitors post in personal finance forums that I visited. 1 Million US Dollars is not that big nowadays but I can say that it is still an achievement to reach that amount especially if you worked very hard just to achieve that goal. If you were lucky enough, you can win in lotto and can easily get a 1 Million US Dollars to invest.
Before investing that 1 Million US Dollars, you might want to first examine yourself with regards to risk, liquidity and return. Definitely, every investor wants a high return for their investments but a higher return involves higher risk and less liquidity.
In my recent article, I provided some avenues on where you can invest your extra cash. Personally, if I have 1 Million US Dollars, I would invest it in the following way with investment number 1 as the top priority where I will invest bulk of that 1 Million US Dollars and the last number as the least priority where I will invest the least amount.
Investment Number 1: Real Estate Investments. As my top priority, I will invest bulk of it in a self-liquidating real estate. I will probably buy a condominium in a strategic location where there are a lot of prospective tenants. A condominium located near a high traffic establishment such as malls, schools, offices, etc. will be the best choice. The rental income from my tenants will provide me a passive income that can retire me forever. My real estate investments will be working hard for me.
Investment Number 2: Stocks, Mutual Funds, and Trust Funds Investments. The second priority investment will be stocks, mutual funds and trust funds. I will place bulk of it in equity funds or directly in the stock market. Historically, in the long-term, they provide one of the highest returns.
Investment Number 3: Savings Account and Time Deposit Accounts Investments. The third priority will be savings accounts and time deposit accounts of banks. This will serve as my emergency fund in case of an immediate liquidity of funds so that when an urgent need arises, I can easily withdraw them.
Investment Number 4: Business Investments. Lastly, I will probably start my own business. This will be my last priority because engaging yourself in a business is not a joke. Even if you have the capital but if you don’t have the right people to work for you, no networks to back you up and no knowledge about the business you’re going to, your chances of success is small.
Second, businesses always involve a lot of time. You should monitor it properly and this will entail a lot of your time unlike the other three priority investments above that requires minimal supervision.
How about you, if you have 1 Million US Dollars, how would you invest it?