How to Invest a Large Amount of Money

by Elizabeth Lang ; Updated July 27, 2017

Perhaps you've won the lottery, inherited money after someone's death, or sold great-grandmother's expensive antiques. No matter where your money came from, you now have a large chuck of it to invest. This article will guide you through investment options for how to invest a large amount of money.

Step 1

If a large sum of money unexpectedly drops into your lap, you should first take time to sit on the money. Wait at least several days or weeks before making any major lifestyle changes. Resist the urge to run right out and buy a new car, house, boat or plane.

Step 2

Make a list of all of your debts and their interest rates. This includes mortgages, credit cards and student loans. If the interest on the debt is high (or the interest is tax-deductible like a mortgage) you should pay off this debt before investing the money.

Step 3

Write down your short- and long-term financial goals and how this money will help you achieve them. Consider how many years you have until retirement. Also list children's college funds and other major expenses you foresee during the course of your lifetime.

Step 4

Establish an emergency fund. If you don't already have six to eight months of living expenses set aside in a high-interest savings account (ING Direct and HSBC Direct are two online high-interest savings accounts), put this amount of money aside now.

Step 5

Consider your risk tolerance and your age. Are 25 and comfortable with the idea that you may lose some money in the short-term? Or are you 65 and don't want to risk losing any of it?

Step 6

If you have a higher risk tolerance and more time before you will need the money, consider investing in stocks through an index fund. Index funds have low fees and are the risk of stocks is spread out over a higher number. Learn more about asset allocation (for example, put 60 percent in U.S. funds and 40 percent in International funds), and research funds thoroughly before you decide to invest in stocks.

Step 7

If you have less time until retirement or have less tolerance for risk, invest in government bonds or T-bonds.

Step 8

If you have questions, contact a certified financial planner. Choose a planner who charges a fixed-fee, not one who claims to work for "free." Free financial planners earn commissions from selling you certain funds, and even if they don't mean to be, they can be biased towards these funds.


  • Make sure you understand the tax implications of your investments. If you have suddenly inherited money, you can owe a lot of taxes at the end of the year.


  • Investing is risky. The greater the opportunity for reward, the greater the risk. You can lose money if you are not careful.

About the Author

Elizabeth Lang is a freelance writer, currently residing in Minneapolis, MN. Her passions include travel, environmental issues, food (especially ice cream), and personal finance. She is the co-founder of Go Green Travel Green Online Magazine.

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