What To Do With 400,000 Dollars?

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A few bundles of 100 dollar bills - What To Do With 400,000 Dollars?

There’s nothing like coming into a lump sum of money at just the right time. But when you receive a lump sum like $400,000, it may be challenging to figure out what to do with it. 

For many people who have never had that type of money, it becomes almost stressful and anxiety-ridden to try to figure out what to do with it.

The truth is what you do with it is really up to you. But some of the best things you might look into doing are investing or even treating yourself a little bit to something you’ve wanted for a long time. 

As long as you’re responsible with the money, this money should last you a while, but that doesn’t mean you have to be a penny pincher.So let’s look at what exactly you could do with $400,000. We hope it helps you determine how to spend this cash wisely.


Can You retire With $400 000?

The truth is, although $400,000 sounds like a lot of money, it is not when thinking about retirement. Even with us saying that, though, you can potentially retire with $400,000 if you add in Social Security and Medicare.

This will leave you not living a very lavish lifestyle, but you’ll be comfortable and able to enjoy your retirement with ease. Of course, if you have a 401K on top of that, it might be a great addition as well. 


How Long Can You Live Off 400k?

How long your $400,000 last is really up to a couple of different factors. These factors include:


  • Lifestyle costs 
  • Whether you have dependents
  • Cost of living in your area


Taking these into account, you can begin to figure out how to budget your $400,000 to make it last as long as possible. If you consider utilizing some investment process, you could live on $400,000 for up to 10-plus years.


Should You Invest That Money?

Ideally, if you want the money to last longer, taking a little money out of the $400,000 and investing it may be a smart idea. If you figure on making about a 7% return and choose to live on about $3000 a month, you can make this go quite a long way.

Investing is a great way to ensure that you can enjoy your retirement and your money and not stress about figuring out how to make ends meet. So, in the end, whether you choose to invest your money or not is really up to you.


Should You Buy Real Estate?

One of the highest costs of living is mortgages and rent. So it might be advisable for you to invest in real estate so that you don’t have that payment coming from your monthly income. 

On top of that, you can also invest in real estate to turn some of that money into a continual influx of cash.Though real estate is an ever-changing market, it is one of the markets that tend to be the most lucrative when it comes to investment. 

Purchasing and renting a property may be a great way to have a little extra income come into your bank account. This will, in turn, extend that $400,000 out longer and allow you to live more comfortably.


Things You Shouldn’t Do With It

If you’re looking to retire and have that, if you’re looking to retire on $400,000 and live off of that for any time, there are some things you should do before moving forward. Here is a list of things that we think are vitally important: 


  • Pay off all any high-interest debt
  • Decide if you want to rent or buy a home
  • Check the cost of living in your area
  • Check into your Social Security or pension
  • Make sure you put back 6 to 12 months of funds in case something happens
  • Look into investing in passive income


Final Thoughts on What To Do With 400,000 Dollars

Retiring or deciding to cut back on work is a big decision. Of course, one of the biggest factors is the money, and if you’re sitting on $400,000, it may be ideal for you to choose to do it now. 

If you are smart about the investment and how you handle your money, that should last you well into a decade worth of living comfortably.