What’s the Best Way to Invest £50k? (2024)

If you’ve saved up or inherited 50k, you might be wondering: “What’s the best way to invest 50k?”

On this page, you’ll find out seven different ways you can invest 50k. You’ll also learn about the vital questions you should consider before investing. What we present in this guide is guidance only, presenting information about different ways to invest. It should not be used in place of financial advice.

Keep reading to discover the following key takeaways:

• Property investment is likely the best way to invest 50k.
• It would help if you spoke to a financial advisor before deciding to invest money.
• A savings account is the safest way to invest 50k.
• You need to know your risk tolerance before deciding where to invest 50k.

Let’s begin:

Overview

• How to Invest 50k Wisely
• Questions to Ask Before Investing £50,000
• Where to Invest 50k in 2023
• The Best Way to Invest 50k

How to Invest 50k Wisely 

Investing can be a fantastic way to set yourself up for the future and earn passive income along the way.  

However, it can be risky to invest all your 50k in one go.

As such, you need to manage your risk and make sure you have a safety net.

Before investing the £50k, you could consider:

• Clearing any outstanding debts, such as credit cards, to ensure you’re starting your investment in the best place possible. 
• Put away some cash in case of emergencies into an easy-access savings account – around three to six months of your income (known as a cash buffer). 
• Contribute to your pension – whether that be a workplace pension or private. 
• Use the money to help pay off your mortgage. 

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The Best Way to Invest £50k: Six Things to Think About

If your financial situation is healthy, and you feel like now is the perfect time to invest 50k, then here are six key questions you should ask yourself before investing. 

1. What Are Your Financial Goals?

Are you dreaming of early retirement? Do you want to buy your perfect family home? Or are fast sports cars more your thing? 

Whatever your goals, these will have a huge impact on exactly what type of investment you’re looking for.

If you want more cash in your pocket, then an income-focused investment could be more your thing.

On the other hand, those thinking of investing for retirement will be more suited to ventures with long-term growth.

2. Are You a Short-Term or Long-Term Investor?

Do you need your money soon, or are you willing to wait for decades for the ultimate cash pay-out? 

Helping decide your timeframe is important, as the longer you leave your money in an investment asset, the more your money will grow. 

Short-term investments are under the five-year mark, while longer-term investments can be 10 years or more. 

It’s important to note that shorter-term strategies often involve more risk, as investment markets are more likely to fluctuate in the short term.

3. What is Your Risk Tolerance?

Risk is a word that can cause any investor to shudder. 

But understanding your attitude to risk is important for a successful investment. 

You need to ask yourself how much money you can afford to lose and how you would feel if you lost thousands overnight. 

Emotions can run high in an investment, and you don’t want to let them takeover to make rash decisions. 

4. Should You Use a Tax Wrapper?

If you’re investing in stocks, it may be a good idea to use a tax-free wrapper to hold your investments.

Like a SIPP or ISA, these investment vehicles will protect your investments from taxes.

Once you’ve opened a tax wrapper available from sites like Barclays, you can then pick and choose the types of investments you want inside your wrapper.

5. DIY or a Ready-Made Investment Portfolio?

Do you have the chops needed to go it alone, or are you a beginner considering their first investment?

Whatever you are, you have two options when it comes to investing money:

1. DIY
2. Ready-Made Investments

DIY investing is when you go it alone. You’ll have complete control over what assets you choose to invest in.

This can include:

• Stocks
• Property
• Bonds

On the other hand, ready-made investments allow you to invest in investment portfolios provided by Robo-advisers that pick investments based on your risk tolerance.

You can also consider a hybrid approach and invest through a fund.

By doing this, you’ll pick a fund that buys and sells investments for you.

These funds will be typically managed by a fund manager who actively manages the fund and picks the stocks.

You can also consider the cheaper passive funds that track investment markets like the FTSE 100.

6. Should You Save or Invest?

If you’ve just inherited 50k, you may feel compelled to invest as you’ve been told it’s the right thing to do.

You aren’t alone in these thoughts either:

A poll from The Times found that around 51.9% would invest a £50,000 windfall. 

However, this may not be the right decision for you.

If you have a low-risk tolerance and want to keep your money as safe as possible, then putting your cash in a savings account may be the wiser choice.

Although the rewards will be greater if you put your money into an appreciating asset like property, you should only invest at a time that you feel is right.

If you have doubts about how you want to spend your money, be sure to seek out the support of a financial advisor to determine what’s the right decision for you and your needs. You can also read our blog post on saving vs investing for more insight to help you decide which route to take.

Where to Invest £50k

Now that we’ve set the ground rules of making a 50k investment, it’s time to look at where you can invest 50k of your money.

The following seven strategies are some of the best places you can invest 50k today:

1. Property
2. Stocks
3. Savings Account
4. Bonds
5. Cryptocurrency
6. Peer to peer lending
7. SIPPs

1. Investing 50k Into Property 

Short term or long term strategy?: Both

Risk:  ★ ★ ★ ☆ ☆

Return Potential:  ★ ★ ★ ★ ★

Likely the best investment for £50,000, property has quickly become one of the best asset classes in the UK.

There are many different methods of investing in property, ranging from serviced accommodation to student property, but the most popular form is buy-to-let.

Here’s the deal:

By investing in property through buy to let, investors earn two forms of sizeable returns.

1. Rent – Currently at a high average of £1,175 PCM, according to HomeLet. 
2. Capital Appreciation – The increase in value of the property over time. Over the last 12 months, property prices have increased by over 10%, according to the Land Registry.

Want to know the best part?

Thanks to good rental yield, this means thatfinding an investment property for salecan fulfil both short-term and long-term investment goals.

It’s also safer than strategies like stocks, with property having a record-breaking year for house price growth in 2021 despite the Covid-19 pandemic.

The only issue?

Your returns can be taxed through income and capital gains tax, which can be sizeable if you own multiple properties.

To minimise this, you could consider forming a limited company.

2. Investing 50k Into Stocks and Shares 

Short term or long term strategy?: Both

Risk: ★ ★ ★ ★☆

Return Potential: ★ ★ ★ ★ ★

The ultimate high risk/high reward strategy, stock market investing can be a great investment strategy for those looking to invest £50,000. 

Investors can purchase fractions of a company to earn income via dividends or wait and sell the stock once it increases in value for a hefty pay-out.

But here’s the kicker:

Not every stock pays out dividends, with some companies choosing to reinvest the funds.

Also, stocks can be complex, with it incredibly hard to pick the right stocks to invest in if you lack the know-how.

For this reason, many investors choose to invest in an actively managed fund rather than individual stocks.

Examples of funds include:

• Mutual funds
• Exchange-traded funds
• Index funds

This can be a neat way to invest 50k, and it isn’t as risky as investing in individual stocks.

3. Investing 50k Into Savings Accounts 

Short term or long term strategy?: Long term

Risk: ★ ☆ ☆ ☆ ☆

Return Potential: ★ ★ ☆ ☆ ☆

A high-interest savings account is a top choice if you want a less risky and more ‘safe’ place to put your money. 

Alternatively, you can also consider taxable investment accounts or a cash ISA.

The latter acts as a tax wrapper and allows you to earn tax-free returns, such as lifetime ISAs and stocks and shares ISAs.

If you want to know how to invest 50k safely, it’s well worth putting some money into savings accounts as your cash will typically be protected – up to £85,000 per bank as per the Financial Services Compensation Scheme.

4. Investing 50k Into Bonds

Short term or long term strategy?: Short term

Risk:  ★ ★ ★ ☆ ☆

Return Potential:  ★ ★ ★ ☆ ☆

Another popular way to invest £50k, bonds are fixed-income investments commonly used by companies (and sometimes governments) to generate funds. 

Here, investors can offer funds to companies in the form of a bond, which is paid at a fixed interest rate over the agreed-upon time. 

Bonds are given a rating for their level of risk, ranging from AAA to C (A being the less risky option).  

Like many investments, the riskier the rating, the higher the interest rate. 

Bonds also have a distinct advantage over the stock market, with less volatility.

Bondholders are also paid before stockholders if a company liquidates, meaning you can feel more secure.

5. Investing 50k Into Cryptocurrency 

Short term or long term strategy?: Long term 

Risk:  ★ ★ ★ ★ ★

Return Potential:  ★ ★ ★ ★ ★

The proverbial new kid on the block, cryptocurrency has become one of the most popular ways to invest £50k in recent years.

Question is:

What is a cryptocurrency?

Put simply:

A cryptocurrency is a digital form of currency that can be purchased and sold online via online platforms. 

You can purchase a full unit or part of a unit for real money and then hold onto it like stocks before selling for a cash pay-out.

A report from The Times found that Bitcoin investors netted a 500% profit in 2021.

(Yes, you read that right).

While this sounds incredibly exciting, there is a caveat:

Cryptocurrency is exceedingly volatile.

In fact, one financial expert speaking to Time magazine said: “You have a high chance of losing it all, but a small chance of winning it big.” 

For this reason, it’s risky to put a bulk of your 50k into this asset without a safety net.

6. Investing 50k Into Peer to Peer Lending

Short term or long term strategy?: Short term 

Risk:   ★ ★ ★ ★ ☆

Return Potential:  ★ ★ ★ ☆ ☆

Peer to peer lending is a form of investment rapidly increasing in popularity.

Through online platforms, such as Upstart, investors can lend cash directly to other people at a fixed interest rate.

The benefit here is that you cut out banks from the equation and will earn more profits from lending without the bank taking a cut.

Some of the money you earn is even tax-free!

However, you can likely sense a caveat coming, and you’d be right.

Currently, P2P lending is not protected by the Financial Services Compensation Scheme.

There’s also the chance that borrowers could refuse to make payments – which can be incredibly dangerous for your investment.

7. SIPPs

Short term or long term strategy?: Long term 

Risk:   ★☆☆☆☆

Return Potential:  ★ ★ ★ ☆ ☆

SIPPs, otherwise known as self-invested personal pensions, are DIY pensions where investors can choose what assets to invest in.

The SIPP then acts as a tax wrapper and holds the investments until you retire.

You can invest in various assets with a SIPP, including stocks, ETFs, and property.

Although you won’t be earning a regular income, these are a good way to invest in your future retirement in a less risky way.

Types of SIPP include:

• A Full SIPP: This offers the biggest choice of investments but has the highest charges.
• A DIY SIPP: This is cheaper than a full SIPP but offers fewer investment choices. For instance, you can’t usually invest in property.

What’s the Best Way to Invest £50,000? 

Now that we’ve looked at seven popular places to invest £50k, you might be wondering:

What is the best investment for 50k?

Sadly, the boring answer is that it depends.

This is because there isn’t just money to factor into an investment.

You also need to consider your age, tax bracket, marriage status, risk tolerance, and timescale.

All of these factors can impact the right strategy for you.

As such, those with low-risk tolerances will prefer SIPPs or savings accounts.

Those with a high-risk tolerance may fancy their chances with the stock market or cryptocurrency.

However, if you want the best midpoint, property investment may be the right choice for you.

Not only does property perform well during times of uncertainty, but it can also deliver sizeable returns over a short-term and long-term basis.

Real estate investment is likely for you if you want to know how to double 50k investments or secure the best return on a £50,000 investment. 

Consider Speaking to Financial Advisers

If you decide to invest, it’s highly recommended that you speak to a financial advisor.

By seeking independent financial advice, you can find what investment fits with your goals and can ensure you’re as ready for an investment as possible.

Where to Invest £50,000 Safely

You’ve likely heard the phrase “don’t put all your eggs in one basket,” and this is something especially true for investing money.

It’s incredibly risky to put all of your 50k into one asset, as you can run the risk of losing all your money if it were to go wrong.

As such, creating a diversified portfolio can be a fantastic way of maximising your chances of success.

You can put the bulk of your 50k towards a property through a buy to let mortgage deposit while also putting some money into savings or mutual funds.

This way, you’ll dip your toes into several investment markets and avoid suffering the impact of one asset failing.

Conclusion

Overall, the best way to invest 50k is likely property.

Not only is property less risky than assets like stocks or cryptocurrency, but it also provides both short-term and long-term returns.

However, the best way to invest 50k for you will entirely depend on your own investment goals.

To discover what goals you have and how you can achieve them, it’s recommended you speak to a professional financial advisor.

How to Build a £50k Property Portfolio With RWinvest Today 

We hope you’ve enjoyed our in-depth guide to the best way to invest £50k. 

If you’re ready to build a property portfolio, look no further than RWinvest. 

With over 18 years of experience as a property investment company, you can trust us to deliver the best investment opportunities in the UK.  

Whether you’re buying UK property from Liverpool or the USA, you can start building your portfolio with us today: with our off-plan properties available at up to 55% below market value.

You can also find tenanted properties near Liverpool and Manchester, which offer some of the most exclusive opportunities currently on the buy-to-let market.

We even offer free furniture packs on select properties, with exclusive deals and investments you won’t find anywhere else. 

We’ve just launched an incredible new investment opportunity in Manchester, with Embankment Exchange set to revolutionise the Greengate real estate market. Join 75,000 investors and invest with the best UK property has to offer. 

Have a higher investment budget available? Our guides on how to invest £75k, how to invest £150k and how to invest £200k offer essential information that can help you avoid the biggest investing mistakes.

Alternatively, if you have a slightly lower budget, check out our guide covering how to invest £30k.

For the latest on property market devlopments, be sure to check out our blog which includes everything from the latest rental yields to everything you need to know about energy efficiency.