Make Money With Money: How To Invest $200K or More To Become a Millionaire

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It takes money to make money, and if you’ve got $200,000 to invest, the dream of being a millionaire is within reach. While you haven’t quite hit the vaunted status of an accredited investor, the right play could take you from comfortable to rich. But how?

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GOBankingRates spoke to money experts from varied backgrounds who suggested everything from financing fintech startups to investing in SPACs. While pursuits like those can certainly get you there, they require specialized knowledge and, typically, connections. Instead, consider real estate and equity investing, which remain the two most plausible and familiar routes for turning a small fortune into a large one.

No matter which your choice, success or failure comes down to you.

“People need to remember to apply discipline, diversification and patience in seeking a large return on their investments,” said certified financial planner Doug Dahmer, CEO and founder of Retirement Navigator. “That means choosing the wisest investments for you, and not just what is trending at that moment. Ninety-nine percent of the people who try to take a shortcut will not see their investments turn into $1 million and will likely also lose their $200,000.”

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Slow and Steady on the Stock Market

The stock market is not the fastest path to two commas, but it is the most straightforward and accessible.

“Turning $200,000 into $1 million is not that challenging,” said Josh Dudick, portfolio manager, Wall Street strategist and CEO of Top Dollar. “It requires time and a reasonable rate of return. The higher the rate of return, the less time it will take to achieve the $1 million milestone.”

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There’s Not Much to It — If You Can Wait Until 2040

The rule of 72 is a simple formula for how investors can double their money in 7.2 years with 10% returns — 72/10 = 7.2.

Following the same math, 12% gains double your money in six years. If your investments earn 8%, you’ll have twice as much in nine years.

Presuming the stock market’s approximate historical return of 10%, $200,000 becomes $400,000 in 7.2 years, then $800,000 in 14.4 years and finally, $1.6 million in 21.6 years.

While it doesn’t happen overnight, this set-and-forget strategy allows you to reach $1 million by putting all $200,000 into the market’s leading index, waiting — and that’s it.

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“Over the long term, the S&P 500 has produced an average return of a little over 10%,” said Paul Walker, author of “A Money Book Anyone Can Read.” “Buy an index fund and wait 194 months, or about 17 years. If you want to lose a million dollars, try to beat the stock market by buying individual investments.”

Your Real Estate Millionaire Dreams Can Finally Come True

Easy-access alternatives like REITs and crowdfunding are open to everyone, but $200,000 is enough to create generational wealth through the purchase of actual real estate.

For long-time real estate investor Brian Davis, founder of SparkRental, the key is to pursue “infinite returns,” which you get by dividing any return into an investment of $0.

“The idea is simple,” said Davis. “After investing in a property and forcing equity through renovations, you then refinance to pull your initial investment back out. That leaves you with $0 of your own cash invested in the property, but you still own it. You keep collecting cash flow on it, and it keeps appreciating in value. Meanwhile, you can turn around and keep reinvesting the same money over and over again, each time adding another asset to your portfolio.”

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He outlines two paths to infinite returns.

BRRRR: Shiver Toward a Portfolio of Income-Generating Properties

Davis suggests the tried-and-true BRRRR strategy — buy, renovate, rent, refinance, repeat. The idea is to buy a well-vetted fixer-upper with an all-in-one purchase-renovation loan and some of your $200,000 as a down payment.

Then, you force appreciation and create equity by using the loan to rehab the property. After renting the newly improved property, you refinance the loan to a long-term mortgage — your renters make the payments for you. Then, you pull out your down payment to complete the final step, which is to repeat the process until you’re a real estate millionaire.

Not a Born Landlord? Pursue Infinite Returns by Joining a Syndicate

Owning and renting physical property is not for everyone. In those cases, Davis recommends chasing your million by becoming a limited partner in a real estate syndicate, where buy-ins typically start at $50,000.

“You become a fractional owner in a commercial property, most often an apartment complex,” said Davis. “The syndicator buys an apartment community that needs updating and renovates it to force equity. Once the renovations are complete and the rents stabilized, they refinance it and return some or all of the investors’ capital to them. You get most or all of your money back to keep reinvesting, while you retain your ownership and keep collecting cash flow. Eventually, when the property sells, you get a hefty paycheck for your ownership share, which you can again reinvest to keep compounding.”

Davis says most real estate syndicates aim to double investors’ money within two to five years — much faster than an ETF.

“It’s entirely possible to go from $200,000 to $1 million in under 10 years with real estate syndications,” he said.

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About the Author

Andrew Lisa has been writing professionally since 2001. An award-winning writer, Andrew was formerly one of the youngest nationally distributed columnists for the largest newspaper syndicate in the country, the Gannett News Service. He worked as the business section editor for amNewYork, the most widely distributed newspaper in Manhattan, and worked as a copy editor for, a financial publication in the heart of Wall Street's investment community in New York City.
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