4 Things You Must Do When Your Investment Account Reaches $50,000

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If you’ve hit $50,000 in your investment account, good job! Even though saving and investing are easy in principle, the reality is that it’s hard to consistently set aside your earnings and choose prudent investments that increase your net worth.

While $50,000 in and of itself won’t fund much of a retirement, think of it this way — if you can grow that money by 8% per year for another 20 years, that relatively modest $50,000 could nearly quintuple, to roughly $246,000. So, the first thing to do when your account reaches $50,000 is to pat yourself on the back.

But this also isn’t a time to rest on your laurels. In fact, after you reach that amount, it’s a great time to run some basic checks on your personal financial situation — and to boost your savings even more. Here are some of the most important things to do when your investment account reaches $50,000.

Check Your Emergency Fund

A solid emergency fund is an essential part of any successful financial plan. While you can never plan for specific emergencies, it’s all but certain that you’ll have at least a few financial surprises in the course of your life. Without an emergency fund, you may have to go into debt to pay your obligations, and debt is the curse of any financial plan.

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Once you’ve accumulated $50,000 in an investment account, make sure that you take the time to fully fund your emergency fund. Many experts recommend having at least three to six months of expenses in your emergency fund, but you may want to adjust that amount based on your job security, lifestyle and income. Whatever amount you decide on, take the time now to make sure your fund is fully stocked, and consider keeping that money in an FDIC-insured, high-yield savings account.

Get Out of Debt

If you’ve proven that you have the ability to save and invest, there’s no reason at all for you to still be carrying debt — especially credit card debt. Credit cards typically carry interest rates of 20% or more, meaning your debt could double in as little as five years if you don’t pay attention to it. If you’re putting money in your investment account instead of paying down your debt, you may actually be losing money.

Think of it this way: It’s likely that your investment account earns somewhere between 5% and 10% annually, depending on how it’s allocated. But if you’re earning even 10% on your investments and paying 20% in interest on your credit card debt, the math simply doesn’t work out in your favor. Take the time now to knock down that credit card debt once and for all.


If you’ve got $50,000 in an investment account, you have enough to diversify your account, even if you’re buying individual stocks. But at this level of investment, it’s also time to take a look at adding different kinds of investments, ones that will complement what you already own by reducing risk and potentially increasing return.

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For example, if you have a portfolio consisting entirely of large-cap growth stocks, consider adding small-cap value stocks, international stocks or perhaps even some bonds, depending on your investment objectives. The idea behind diversification is to own assets that don’t go up and down in the same manner but that can all provide positive long-term returns. In this way, you can balance out the volatility of your portfolio while still maintaining its long-term growth characteristics.

As your portfolio crosses $100,000, $150,000 and beyond, keep checking on its risk/reward characteristics so that you continually keep it growing without getting scared out of your positions due to volatility.

Make Your Savings Hurt a Little

If you’ve gotten to the point that you’ve got $50,000 in an investment account, you’ve likely gotten used to saving. While that’s a great habit, now’s the time to push a little bit and make it hurt. Remember when you first started setting aside money from your paychecks? It likely stung a bit, as you had less of your hard-earned money in your pocket.

Now that you’ve grown accustomed to money being withheld from your paycheck, it’s time to go back to that “hurt” and bump up your savings rate. If you’re tucking away 10% from every paycheck, for example, move that up to 12% or 15%. It might sting again at first, but over time, you’ll adapt to this bigger contribution level, as well.

By the time you retire, you’ll reap the rewards, as compound interest on your bigger contributions could lead to a significant nest egg. 

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