Where and how would you invest $350,000 to make $1,000,000?

[Account Closed]

I will be moving to an emerging market within a year with this amount of money. I am curious how others would choose to grow it to $1,000,000 in five years or less. Thank you for sharing your thoughts!

[Frank Manning]

Hey Anna,

I think having a goal of $1M within 5 years may not be the best approach.

I don’t know if you’re looking in Seattle or elsewhere but it seems like a goal of tripling your money in 5 years may lead you to force something. Also, that kind of return will need to be made on appreciation.

If I were you, I’d set a goal based on cash flow. That’s something you can impact directly. Seattle is a really tough market right now as cap rates are 3-4. I’d recommend looking south of Seattle in Kent or Olympia or even down by Centralia for better rates.

In Seattle, anything purchased in the last couple of years has exploded in price. There’s no telling what will happen in the next couple of years.

If you can find good, cash flowing properties, you’ll be able to get a more consistent, albeit lower return. That stable investment may or may not appreciate, but at least you will have consistency. I always look at appreciation as icing on the cake. Don’t calculate it into your purchase decision. If it happens it happens. Going out there and trying to force 650k in appreciation in 5 years when the market is already at all time highs is a recipe for disaster.

Hope that helps.