The best way on how to invest $150000 is through stocks and index funds. Not only have stocks been a proven way to build wealth for centuries, it is completely passive income when done the right way. It’s how I increased my net worth to $500k+ at just 28 years old.
The first time I reached $150k was when I was 24 years old. I was earning ~$110k/yr at the time and I felt like I was on top of the world! Not only did I increase my income, my wealth was slowly rising as well. And I couldn’t imagine until I reach that elusive millionaire mark.
I didn’t get there by increasing my 9-5 income as much as I could. I got there by investing as much money as I could. When I had $150,000 I kept it very simple and I invested all of my money in the S&P 500. No other index funds.
Although I could’ve earned more money if I invested in other index funds, I didn’t care about earning more money. I cared about becoming wealthy *on a guaranteed* level. It’s much better to be a millionaire for sure than it is to have a chance at having $5mil.
At the $150k level, that’s when investors enjoy serious compound interest and wealth building. It first starts with knowing how to invest $150000. Otherwise, we are letting the opportunity slip by our fingers. Just as much as we can earn more money with the money.
It can just as easily lose everything in a short amount of time, if we’re not careful.
How to Invest $150000: 9 Ways to Do So
Below are the 9 best ways on how to invest $150000. We have an opportunity to create generational wealth with this kind of money. We can’t waste the opportunity because we may not get the chance again. It’s easier to get rich once than it is to get rich, go broke, and make it back.
1) How to Invest $150000: Stocks and Index Funds
I personally like the S&P 500 index the most, specifically the VOO. Although the index may lose value over the next 40 years unlike the last 40 years, I still expect American companies to do very well and earn more money in the next 40 years than they are earning today.
Stocks and index funds are a great way to build wealth and get to that millionaire milestone. The best part is that it’s all passive and we can even automate our index fund investing. How to invest $150000 can be done passively.
Every paycheck, money flowed to my 401k account and it went straight into the S&P 500 fund. Michael Burry argues index funds are a bubble that needs to be popped. I completely disagree. Index funds are a great investment vehicle that’s made many millionaires.
And it’s expected to continue to mint many more millionaires as time passes.
2) Income Producing Real Estate
Index funds are great to build wealth with. However, real estate investing is where it generates cash flow. Net worth is great but cash flow is what pays the bills. I personally haven’t focused on generating cash flow and only focused on building wealth.
However, I would like to get into income producing assets as a part of the next investing journey. Even better is that how to invest $150000 in rental properties means that you can use leverage. Real estate investors can control a $750k asset with just $150k.
Instead of just buying one $750k property, investors can buy two $375k properties and earn double the income. Real estate is more active income than stocks and index funds but it’s still a great alternative. I personally will be buying real estate in the next 5 years.
It feels great knowing that when you wake up on the 1st, you have notification that your tenants paid you rent.
3) Treasury Bills
Treasury bills are becoming more popular now more so than ever before! As the Fed raised interest rates in 2022 and 2023, Treasury bill yields have been increasing. How to invest $150000 could mean putting your money in risk-free assets to generate annual income from.
30-year Treasury bills in 2022 was paying as high as 4%/year. That’s not an insignificant amount of yield. With $150k, that’s an additional $6k per year in income. Which could be higher than a lot of 9-5’s raises that employees receive.
Although I haven’t taken advantage of Treasury bills given that I’m young, I wouldn’t mind the 4% risk free rate when I’m older. Guaranteed income is never a bad thing. 30-year treasury bills reached as high as 14% in early 1980s.
A risk free 14% is a great yield. Not even risk on assets can yield 14% consistently.
4) High Yield Savings Accounts
High yield savings accounts had no respect from 2010 – 2021. Then 2022 came around and everyone wanted to get in on them. Some high yields accounts were paying 4.4%, risk free, and were rising even higher! The Fed did not want to stop hiking interest rates by April 2023.
I took advantage of the high yield savings accounts and started earning 4%+ on my money. Some banks were offering a $450 sign up bonus, so the yield was even higher for the first year. How to invest $150000 doesn’t always mean looking for the best asset to invest in.
Sometimes, it’s as simple as just putting money into the bank and making a deposit. When I had a $500k net worth was when everything came together. Because that gave me a yield of $22,000 per year, which was very close to how much I was spending every year, anyway.
I was essentially living for free, which helped ease the layoff fears throughout the year.
5) Pay Off High Interest Debt
Paying off high interest debt is better than any risk free asset you can think of because the results are even more guaranteed than any other risk free asset in the world. High interest debt is any debt that costs more than 5% per year.
A 5% return for the lender is a very high amount to be paying! How to invest $150000 means knowing how to best allocate capital to the risk/reward scale. We can easily use $150k to pay off the debt that we hold. That’s the best way to get ahead financially.
I personally took on $50k of debt in 2021. I quickly realized that it’s not for me and a debt free life is underrated. Debt is passive income for the lenders. We shouldn’t be passive income for someone else. We should create our own passive income.
There’s no point in investing in assets when we have debt. That’s fighting two wars at once, which is very bad.
6) Opening an IRA
The biggest mistake of my life was not opening a Roth IRA sooner than I did. I missed out on putting ~$50,000 of tax advantaged money into a Roth IRA. $1 in a Roth IRA is worth more than $1 in a brokerage because Roth IRAs have tax advantages that brokerage money does not.
How to invest $150000 starts with knowing which account to put the money in in the first place. This is one of the reasons why investment income is the better income than 9-5 income. There are tax advantages investors enjoy that laborers do not.
Even though I learned from my mistake and eventually opened a Roth IRA, I learned it way too late. I can’t imagine how much further I would be if I had done that from the beginning. Everyone talks about how great 401ks and HSAs are. But they never talk about the Roth IRA.
It’s one of the most underrated investment accounts out there. It’s one of my biggest personal finance mistakes.
7) Start or Invest in a Business
Starting a business with $300 and growing it from there is a great way to start. However, scaling through the bootstraps is a very hard way to grow. How to invest $150000 could mean starting a business from scratch. $150k is a large amount of money to actually start a business with.
Every year, boomers are retiring and the boomers invested in a lot of good cash flowing businesses that need to be passed down to the next generation. There’s no reason why the next generation can’t be you. Their children might not be interested in keeping up with the business.
There are high quality businesses that are selling for GREAT multiples such as 2x profits. If you can add value on top of the profits they already earn, that is icing on the cake. And best of all, the purchase prices are negotiable. The sellers are motivated to sell their businesses.
Owning businesses are a great way to diversify your income sources and make more money. It’s an empire that can protect you in case of financial ruin.
8) How to Invest $150000: Education
It’s one thing to invest in assets that earn you 8 – 12% per year. It’s another to invest $150k in education that brings you an additional $250k/yr in earning potential. Although I firmly believe college is a waste of time and money, education is still a worthy investment.
However, the education has to be profitable and monetizable to be a worthy investment. How to invest $150000 starts with maximizing your #1 income source in the first place. Which is most likely 9-5 income. Getting a $200k job is easier than building a $200k business.
No matter what these online influencers and gurus like to say. There are actual certifications out there that almost guarantee you increase your income just because of how specialized it is. One of my friends’ dads charges $500 per visit to fix A/C in the apartment.
All he had to do was flip one of the internal switches from “off” to “on”. That’s being paid for your knowledge and your effort. That is the power of education.
9) Real Assets
There’s new asset classes forming every single day. Before, we could only invest in stocks, bonds, and real estate. Now, we can invest in real assets such as cars to rent out and let someone else have short-term use for the asset. The sharing economy is here to stay.
We can Uber or even rent our cars out on Turo for someone else to enjoy. It’s one thing to have cash but another to have real tangible assets you can touch. A $300k house is worth more than $300k cash just because of the time it takes to convert the cash into the house.
How to invest $150000 can be in real assets that you rent out for others to use. There’s creative ways to earn money, more so than ever before. Thanks to the invention of the internet. The goal is to make our money work for us instead of the other way around.
There’s not a single wealthy person in the world who doesn’t own assets. 2022 was when we saw just how much real physical assets are worth over money.
How to Invest $150000: My Story
When I had $150k, I put everything I could into the stock market, the S&P 500. I didn’t stop investing more money into the S&P 500, either. Every two weeks, a portion of my paycheck went to my 401k that eventually went into the S&P 500.
Just 4 short years after I had a $150k net worth, I have $300k in my 401k, double from $150k. How to invest $150000 is crucial because this is the critical stage of when you can actually make it or not. This is an opportunity to create generational wealth.
I still haven’t stopped hustling and putting more money into the S&P 500. No matter how much money I make, I max out my 401k every single year without fail. I wanted something completely passive and didn’t want to work another job on the weekends.
My weekends were already busy enough. I patiently waited and it worked. Actually, I would even be further ahead in my net worth had I invested my after tax dollars into the S&P 500, as well. That’s how powerful the index is. It’s never returned a negative result over a 20-year period.
How to invest $150000 to create generational wealth is fun. It’s even more fun when the results show up in your favor decade after decade. When you know how to make $150k in the first place, you know how to get to a million dollars next.
The principles never change. Investments set us free.
How to Invest $150000 to Make You Richer
There’s nothing wrong with wanting to get richer. When I was younger, I was manipulated by others telling me that “it’s wrong to want money”, “money is irrelevant”, and “money is the root of all evil”. I’m so glad I learned what BS that was.
Once I educated myself on how to become wealthy and rich, that’s when I learned how to invest $150000. The wealthier I got, the better I felt. There’s nothing wrong with becoming rich and wealthy. It’s smart. It’s very difficult to get rich through a traditional 9-5 income.
However, it’s easier to get rich through investment income. Investment income enjoys some of the best tax advantages the country can ever offer. Long term capital gains tax rate is only 20% in 2022. That’s way higher than the 30%+ I’ve been taxed through my 9-5 income.
The United States heavily favor capital over labor and instead of complaining about the system, it’s time to take advantage of it. Assets and investments are how the bottom 50% can pull themselves from their bootstraps and sit on the table with the big boys.
Once investing becomes muscle memory, the world opens up to you. Knowing how to invest $150000 will set you free than anything else in the world. Freedom is what everyone is striving towards. Not money, status, or ego.
But the power to do what you want, when you want it, with people you like and respect.
How to Invest $150000: 9 Ways Shortlist
- Income producing real estate
- How to invest $150000: stocks and index funds
- Treasury bills
- High yield savings accounts
- Pay off high interest debt
- Opening an IRA
- Start a business
- How to invest $150000: education
- Real assets
