What To Do With 20k in 2024 - Flip It, Invest It, or Save It?

If you have debt with over 6% interest, pay that off.

It can be risky to earn 6% or more by investing in the market or through real estate, but if you have interest on your debts that you can eliminate simply by paying off the principle, then that makes a ton of sense.

The best way to get started with debt pay off, is to use one of the proven frameworks. Two of the most popular ones are debt snowball and debt avalanche.

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If you don't have a true emergency fund (ie. a savings account that you can access easily if sh*t hits the fan), then now is the time to start.

This doesn't mean you need to earn nothing on your money. Find a top high yield savings account and earn 4% APY or better.

Curious about how to invest 20k for passive income? There are quite a few ways to do this, but it depends on how much money you want to earn month to month.

With dividend stocks, you invest in a company stock that pays you money each quarter. You can either reinvest these dividends or in some cases, live off of them. The choice is yours.

Here are a few of the top dividend-paying stocks:

• Aflac Inc: 2.74%

• AllianceBernstein Holding LP: 7.9%

• Camping World: 5.4%

• Exxon Mobil: 5.9%

• Prospect Capital: 8.8%

As an example, if you invest your 20k in Camping World, you'd earn over $1,000 a year.

Of course, don't put all of your money in one basket. But, investing in dividend stocks as a whole can give you quite a bit back in passive income.

CD interest rates are over 5% right now. Invest $20k for a year and you'll earn yourself $1,000. Not too shabby for an incredibly safe investment.

How do you buy a CD? You can do a quick search online or walk into your local bank and invest in one there.

Wondering what to do with $20,000 in real estate?

You could choose to put a down payment on a physical rental property, a rental space (like an RV, a garage, a glamping tent, etc), or even invest in a real estate investment trust that pays dividends too.

You want to keep your 20k safe, but you want it to earn a little money at the same time. So, what is the best way to invest 20k short-term?

Corporate bonds are bonds issued by major corporations. This investment would earn you interest at regular intervals too, usually twice a year. And, with a bond fund, you'd have access to investments across different companies, industries, and more, so your investment strategy is safer than just a single stock.

Another short-term investing solution is money market accounts. Money market accounts can pay a higher interest rate than traditional savings accounts.

But keep in mind that they usually require a higher minimum investment, too. But, if you're willing to invest your 20k short-term, this should be doable.

Government bonds are similar to corporate bonds. But, instead of being issued by a corporation, they are issued by the U.S. federal government and its agencies. You can buy these funds via your brokerage account on platforms that include them.

It's important to note that these funds aren't backed by the FDIC. But, at least you know that the government promises to pay you back, so it's suitable for investors with lower risk tolerance.

These accounts and funds will vary in how much they earn you. But, they're highly liquid accounts, so you can earn some interest while your money sits short-term.

The smartest thing you can do is pay off debt.

If you have debts with interest payments, you could pay those off and save on that interest, which is just like earning it by investing, but paying off debt yields a guaranteed return.

If you don't have any debt, then build up a well-balanced investment portfolio.

A financial advisor can help you decide what could work best for you, but most people should likely focus on mutual funds, index funds, and perhaps bonds and keep them balanced.

If you're wondering how to double 20k, flipping is definitely an option. The best way to double 20k is to start a business or invest in something that will earn you money right away.

The first thing to do is to take the time to grieve if it comes from a loved one. Don't make any sudden moves with the money — when you're in an emotional state, you may not think clearly when it comes to spending.

While you're doing that, stick the money in a savings account. You could choose high yield savings accounts so it's also earning some interest while you wait.

Once you've taken the time to start the healing and grieving process, then you can start making plans with the money.

First, make sure you won't owe any taxes on it! If you got a bonus from your W-2 job, they should have already done this. But if not, you don't want to owe more to the taxman. Better to be safe than sorry!

After you've checked that, it's important to look at your short and long-term financial goals. Do you:

• Have debt to pay off?

• Want to start investing?

• Want to buy a home?

• Need to save for something important (like college, a new car, etc)?

• Want to take a vacation?

Whatever your goals and needs, this will help you determine how best to spend your 20k. Focus on needs first, then work into wants. P.S. It's okay to have wants! You just want to balance both needs and wants with your windfall.

Getting an extra $20,000 in your 20s can be life-changing for most people. But, how you spend your 20k will depend on your individual needs and wants. I'll go into more detail about how to flip and invest 20k below too.

There are plenty of things that you can do with your 20k to grow it or save it. But, there are also a few things that you shouldn't do.

Here is what you should avoid doing with your 20k:

• Gambling. Betting on winning big probably won't work. You may win big, but you're more likely to lose all of your money.

• Investing in a single source. Of course, we all think Apple will stick around for the long haul. But, that doesn't mean investing all of your money in Apple stock! Instead, keep your investments diversified.

• Blowing it. This can be easy to do if you don't have any plans with your money. Vacations, extra food, and "stuff" sound really good when you have extra money laying around. But you could sabotage your future self if you spend too much.

Of course, the choice is always yours. You can spend your money however you want. But, these may not be the wisest choices if you're looking to set up a financially secure future.

If you want to be smart with 20k, the best thing you can do with the money is park it in a simple savings account for 6 months and just think about what that money could do for you.

Once you take your time and decide, you'll probably do just fine with the use of that money! But, if you don't follow this advice and you just spend the money immediately...chances are that you're going to regret it.

Did you discover what to do with 20k? Where do you plan to put the money??