You’ve paid off your debts and built yourself a nice little nest egg of $50,000 — and you may be wondering what you should do with it. Although the phrase “a penny saved is a penny earned” holds truth, you may want to start investing your money.

Investing is an excellent option because of the growth potential of the money you invest. Unfortunately, you run the risk of losing purchasing power if inflation eats away at your savings. Even if you choose to hold your money in a high yield savings account, you may not be able to outpace inflation.

Getting started with investing can be a daunting task for new investors. Let’s take a look at the different types of investment styles and determine the best way to invest $50,000.

Determine your investment style

The first thing you’ll need to do is decide how you want to invest.

Do it yourself

DIY is an option for almost everything in life, although painting your own home and building your investment strategy are two very different tasks. The idea is that you will complete the process without any professional help.

If you choose a DIY investment strategy, it is important to map out your investment strategy with careful research and planning. After you are comfortable with your plan, you will need to open a brokerage account to purchase investments.

The obvious advantage to this tactic is that it’s typically less expensive than many other options. However, you need to be comfortable making large financial moves without any professional assistance.

Robo-advisor

Robo-advisors vary widely based on the brokerage firm. However, the service generally manages your investments based on an algorithm. Although some firms offer lower fees, many offer fee structures that are comparable to traditional financial advisors.

Although you will not receive personalized attention, a robo-advisor is tailored to your investment interests. Plus, many robo-advisors offer lower entry fees than traditional financial advisors. In fact, some robo-advisors, like Betterment, have no minimum balance requirements.

With a robo-advisor, you may need to double check that your strategy aligns with your goals. A physical person won’t be managing your account, so you will need to ensure that the robo-advisor understands your goals and builds your strategy appropriately.

Hire a professional

It may be a good idea to hire a financial advisor if the idea of managing your money without help is scary. A professional will help you to get the most out of your investments with minimal effort on your part.

If you choose this route, make sure you research your future financial advisor carefully, as some don’t have your best interests in mind. Find an advisor with credentials and recommendations that check out.

5 smart ways to invest $50,000

Once you’ve decided how you will start investing, you need to choose your investments. If you chose to work with a professional, they’d be able to guide you with your investing decisions.

There is no single best way to invest $50,000. The best investment strategy for you will vary based on your unique situation. However, investing your money can be a wise choice for your financial future. Let’s take a look at five smart ways to invest 50,000.

1. Create an emergency fund

An emergency fund is a great way to safeguard against the unexpected. Everyone faces unexpected expenses at some point in their life, so it makes sense to be prepared. These unexpected expenses can be anything from losing your job or an unexpected health problem. These heart-stopping moments will be slightly less traumatic if you have a nice emergency cushion.

You’ll also want to consider placing your emergency fund in an account that won’t charge fees for withdrawals. It’s important to have quick access to cash for anything life throws at you

If you have a solid emergency fund, but would like extra savings available, then you may want to consider placing your money in a CD. Although you would not have immediate access to your money without fees, you may be able to plan your CD deposits around large purchases. The CD will help your savings grow while you prepare to make a large purchase (like a home or vehicle).

2. Max out your retirement options

If you ever plan to stop working, then you’ll need to maximize your retirement savings, especially if you have available cash to invest. Luckily, there are numerous options when it comes to retirement savings.

First, if your employer offers a 401(k), you should contribute as much as you are allowed. Other common types of employer-sponsored retirement accounts include 403(b), 457 and the government thrift savings plan. Some employers will contribute matched amounts to your retirement account. You’ll want to maximize this option if it is available.

Unfortunately, not every employer offers a retirement savings plans. Don’t worry; there are other options available.

An IRA (Individual Retirement Account) will allow you to deduct the investments you make from your income. Opening an IRA will allow your funds to grow tax-free until you withdraw them. A Roth IRA is very similar to a traditional IRA. According to Chad Manberg, a CFP at the Strategic Income Group in Arizona, the number one reason to prioritize a Roth IRA over a traditional IRA is “tax-free growth.” However, he added, “Ideally, someone would have both a Traditional and a Roth IRA by the time they get to retirement.”

“The major time to prioritize one over the other is if the 401k is offering a match. In this case, the 401k should be prioritized,” said Rick Vazza CFP at Driven Wealth Management. Other than that period of prioritization, a diverse strategy between both IRAs and a 401k may lead to a good investment portfolio.

Visit the following resources to learn more about contribution limits:

3. Invest in the stock market

If your retirement accounts are maxed out, you may want to start investing in other ways. Here are a few ways to get started:

• ETFs. Investing in a low-cost exchange-traded fund (ETF) could be a good option if you want less fees more flexibility with your investments. ETFs are traded like stocks, so you will have the ability to get started with just one share.
• Mutual funds.Mutual funds are another great way to get started investing in the stock market. Instead of buying a share, you buy into a fund.

Both of these are a good starting point for stock market investments.

4. Invest 50k into a 529 account

If you have children then you may want to consider investing that money in a 529 account. A 529 can help cover your child’s education expenses. Anything from private K-12 to graduate education can be paid for through this account.

According to the College Board, the average annual cost to attend college was between $9,970 and $34,740 for state and private schools respectively for the 2017-2018 academic school year. A 529 savings plan will allow you to invest in mutual funds and other investment vehicles through the plan. There are also some tax advantages associated with 529 accounts.

Investing $50,000 into a 529 may be a solid plan now if you intend to pay for your child’s higher education later on.

5. Create the best mix for your financial future

Everyone’s financial situation is unique, so there’s no one-size-fits-all investment strategy. Instead of investing the full 50,000 on one investment vehicle, it may be wise to have a healthy mix of investments.

As you go through the investment process, make sure to analyze and adjust your portfolio along the way. Investors should rebalance their investments on a regular basis to maximize the effectiveness of their portfolio.

Think about your goal

Before you get started, think about why you want to invest 50k in the first place. You have plenty of options to build the right investment portfolio, but you’ll need to create a portfolio that will take you where you want to go.