I’m a Financial Advisor: Here’s How I’d Invest $25K for Maximum Growth
Written by
Laura Bogart
Edited by
Kristen Mae
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
So you’ve come into an extra $25,000, whether via an inheritance, a return of a previous investment, or years of disciplined saving. Now you want to invest it, hoping that this seed of cash can achieve maximum growth. Just like any smart gardener who knows that meaningful growth requires both patience and strategy, you need a plan.
To develop that plan, you need input from an expert. GOBankingRates found one with an impressive background. Robert R. Johnson is a professor of finance at Heider College of Business at Creighton University. He’s also the co-author of several widely used investment books and previously served as deputy CEO of the CFA Institute and president of the American College of Financial Services.
We asked Johnson how he would invest $25,000 if the goal were maximum long-term growth. Here is what he said.
Invest 100% in Stocks — if Maximum Growth Is the Goal
Assuming the investor has a long time horizon and a high risk tolerance, Johnson suggests placing the entire $25,000 in a broadly diversified common stock index fund. That recommendation may sound aggressive, but it is rooted in decades of historical data.
“According to data compiled by Ibbotson Associates, large-capitalization stocks (think S&P 500) returned 10.4% compounded annually from 1926 to 2024,” he said. “Over that same time period, long-term government bonds returned 5% annually and Treasury bills returned 3.3% annually.”
These long-term trends explain his confidence that the most reliable way to grow wealth over time is through a diversified portfolio of stocks.
That said, Johnson knows a stock-heavy strategy only makes sense if you won’t need the money for a long time. However, if your time horizon is 10 years or less — or if market swings would cause you to panic — it may not be the best approach for you, even if the potential returns are higher.
Avoid Chasing ‘Hot’ Stocks or Trying To Time the Market
Everyone from social media influencers to cable TV pundits has opinions about the moment’s hottest stocks — and they’re rarely quiet about them. Johnson advises investors to tune out the noise and take a disciplined, long-term approach with that $25,000, resisting the urge to jump from one trend to the next. He likens building wealth to running a marathon, not a series of sprints.
“People make the mistake of believing that the way to build wealth is to move from investment to investment — that is, to trade,” he said. “Nothing could be further from the truth. This belief is reinforced by the 24/7 financial news networks that every day have talking heads telling viewers to buy this security and sell another security.”
Johnson is equally skeptical of anyone who claims they can time the market. To underscore that point, he often cites Vanguard founder John C. Bogle: “After nearly 50 years in this business, I don’t know of anybody who has done it successfully and consistently. I don’t even know of anybody who knows anybody who has done it successfully and consistently.”
Focus on Diversification, Not Picking Individual Winners
When investing $25,000 for growth, Johnson wouldn’t focus on individual stocks. Instead, he favors a broadly diversified stock index ETF for most investors.
“An interesting study by University of Arizona professor Hendrik Bessembinder shows that only 4% of common stocks have provided a higher return than Treasury bills,” he said. “In other words, the returns on the market have been driven by a small percentage of big winners. Trying to pick winners, for most, is a loser’s game.”
Diversification helps investors benefit from those rare standout performers without needing to predict which companies will succeed. To further illustrate his point, Johnson recalls Warren Buffett’s advice that consistently buying a low-cost S&P 500 index fund is one of the most sensible ways to build long-term wealth, particularly for retirement.
A Note on Paying Down Debt
While his investment advice assumes the entire $25,000 is available to invest, Johnson emphasized that for those who have high-interest debt, paying that off should come first.
“People can put their financial house in order by reducing debt and acquiring assets that grow in value over time,” he said. “The fastest way to change one’s net worth for the better is to obtain more assets that compound in value, like stocks or CDs, and reduce one’s debts and lower interest payments.”
In practical terms, that means prioritizing debts with the highest interest rates, such as credit cards, rather than focusing solely on the largest balances.
However, Johnson is clear that not all debt is bad debt. For example, he wouldn’t recommend using that $25,000 to pay down a low-interest mortgage.
“If they have high-interest credit card debt, the money should be used to pay that debt down,” he said. “But I would not advocate paying down mortgage debt with those funds. Instead, I would advocate investing in a broadly diversified stock index ETF.”
The Bottom Line
Investing $25,000 can be a powerful step toward building long-term wealth. If your goal is maximum growth and your time horizon and risk tolerance permit it, a broadly diversified stock index fund offers the strongest historical odds of success. Avoid chasing hot stocks or trying to time the market. And if high-interest debt is part of your financial picture, address that first before putting new money to work.
Need a little extra breathing room in your budget? MoneyLion, a sister company of GOBankingRates, is giving away $2,000 a day through Jan. 24, 2026. Sign up here and see if a cash boost is in your future.
More From GOBankingRates
