How To Invest Your Third Stimulus Check The Right Way

by Barbara Hadden

If you don’t urgently need your third stimulus check, you’d be wise to invest and multiply it! But how? And where? Let’s cover five smart ways to invest $1,400.

Let’s say Uncle Sam cuts you a check for $1,400. You don’t really need the money right now (thankfully) so you’re thinking of investing it. 

But where? And how? What if you might need the money in the short term? What if you don’t know which stocks to pick? 

In this piece, I’ll answer all these questions and more. There are plenty of smart, savvy ways you can invest your third stimulus check today, ranging from the short-term to the long-term, hands-on to totally hands-off. 

Let’s investigate some simple, yet high-yield ways to invest your $1,400. 

How To Invest Your Third Stimulus Check The Right Way - Oh, and before you invest your money...

Before you invest any amount of money, it’s always worth taking a final pass at your overall financial health to ensure the money isn’t needed elsewhere first. 

For example, is there any high-interest debt you can help pay off? Is it worth making a dent in your student loans before making any long-term investments? 

Paying off existing debt isn’t the most thrilling way to spend your stimulus check, but in most cases, it’s a better “investment” than anything on  Webull or Robinhood . Debt can grow quickly, and also negatively impact your FICO score while it does. So it’s best to wipe the slate clean before you look to the future. 

If you don’t need your $1,400 now but you might need it soon, your best “investment” option is probably a high-yield savings account. That’s because while savings accounts don’t pay too much interest compared to investments, your money will remain instantly accessible if you need it. 

Unlike the other options on this list, you can withdraw from your savings account without having to make trades, take a loss, or pay a capital gains tax. 

As for where to open a savings account, I recommend Chime . You can open a Chime Savings Account within minutes and start generating 0.50% APY .

Chime Disclosure - Chime is a financial technology company, not a bank. Banking services provided by, and debit card issued by, The Bancorp Bank or Stride Bank, N.A.; Members FDIC.

How To Invest Your Third Stimulus Check The Right Way - Mid-term, high-risk: buy a little crypto

Given how the value of Bitcoin has exploded from roughly $10k to nearly $60k in the last year, many folks are considering investing their stimulus money in cryptocurrency. 

It’s OK to invest a little of your stimulus in crypto, as long as you have a crystal clear understanding of what you’re getting into. 

Here are the highlights you should know before heading to Coinbase: 

  • Crypto is extremely volatile and high-risk. The price of BTC has both risen and fallen 6x, often losing a quarter or a third of its value overnight. Some say there’s a bubble ready to burst, others say it’s heading towards $1,000,000. Needless to say, your $1,400 could be worth $700 or $2,000 tomorrow. In a year it could be worth $7 or $7,000. Since crypto is unstable, it’s not wise to consider it part of your long-term investing strategy – just a high-risk investment you’re willing to lose.
  • You’ll pay taxes, and it’s kinda hard.  The IRS has become extremely strict with crypto investors – they’ve subpoenaed Coinbase, gone after 11,000 tax dodgers, and now require everyone to report their crypto sales on their taxes down to the minute detail, like precise buy and sell prices for capital gains calculations. Crypto isn’t the “tax haven” it used to be – quite the opposite, it’s one of the most traceable currencies in the world. 

In short, crypto can lend some high risk to a diversified portfolio, as long as you’re:

  1. Mentally and financially prepared for a possible total loss.
  2. Ready to carefully track your trades for accurate tax reporting.

If crypto doesn’t feel quite right yet and you’re thinking of a more traditional investing option, let’s talk stocks. 

For the longest time in U.S. history, getting hands-on with the stock market was a privilege reserved for the rich and well-connected. More recently, technology has democratized investing, empowering any adult with a bank account to begin handpicking securities to build their wealth. 

If you’re ready to invest in the stock market, let’s look at two commonly traded assets: stocks and ETFs. 


Stocks are ownership shares of public companies. Companies may share profits with you via dividends, but your main form of profit comes when you sell your shares for a higher price than you paid, minus broker commissions and capital gains taxes. Buying up individual stocks can be risky since share prices can fluctuate based on countless unpredictable factors like industry performance, company performance, even mismanagement. That’s why many investors build a portfolio upon Blue Chips – shares of giant, reliable companies that show a steady increase in stock price over time.


ETFs are like baskets of stocks grouped together under a common theme. There are Blue Chip ETFs, green technology ETFs, even ETFs for developing nations. If you want to invest in an industry, idea, or just a bundle of similar companies, ETFs are your best bet. Investors like ETFs because they’re less risky than individual stocks. If one out of 18 stocks in your ETF plummets in value for whatever reason, the value of the ETF won’t be greatly affected. 

If you want to get a better handle on what’s going on in the world of stocks and ETFs,  Public  is a social investing app that allows you to invest in fractional shares and offers an authentic social element to make “boring” investing more collaborative. 

How To Invest Your Third Stimulus Check The Right Way - Mid-term, low risk: open a “lazy portfolio” 

A “lazy portfolio”, also known as a fire-and-forget portfolio, is an investment portfolio you set up once, occasionally make deposits into, and otherwise, leave alone. This gives your money time to mature and compound in peace. 

The philosophy behind a lazy portfolio is that you don’t really need to actively manage your portfolio on a daily, weekly, or even monthly basis. 

But what if you’re not sure what investments to pick? What if you want to be totally hands-off, but still make money in the stock market? 

Enter robo-advisors – programs that can build and even actively manage a lazy portfolio for you. Robo-advisors are like the AI equivalent of a human wealth advisor. There are pros and cons to each , but robo-advisors are undeniably cheaper than their flesh-and-blood counterparts, charging a ~0.3% management fee versus the typical 1% or more for a human. 

For a rock-solid robo-advisor deserving of your $1,400, consider TD Ameritrade  which automatically designs an optimized lazy portfolio based on your risk parameters. You can’t handpick the stocks or ETFs that go into it, but you can adjust your risk tolerance and TD Ameritrade will reshuffle your holdings. 

George Soros has a saying:

“good investing is boring.”

Does that mean the more boring the investment, the better it is? 

Well, let’s see what happens when you put your third stimulus check into your retirement account. That’s pretty much the most boring way to invest it. 

If you put your $1,400 into a retirement account when you’re 30, it’ll become $16,108.61 by the time you’re 65. If you can invest another $100 per month, you’ll have $196,214.07.

Play around with MU30’s  Compound Investment Calculator  to see how much you could have if you invest more (or less): 

If you really don’t need the money anytime soon and lack a better idea of what to do with it, you seriously cannot go wrong putting it into your retirement account. If you don’t have a retirement account yet, you can open one pretty easily . Your first choice will simply be which kind of account best fits your needs and goals. 

The two best types of retirement accounts for young people are 401(k)s and Roth IRAs. 

  • A 401(k) is a retirement account you open through your employer that will often match your automatic monthly contribution up to a certain percentage (usually around 6%). 
  • A Roth IRA is the next best thing for my fellow 1099 homies who don’t have employer-sponsored 401(k)s. Roth IRA contributions are limited to $6,000 annually, but they’re also taxed upfront – which can be seen as an advantage since your contributions and accrued interest aren’t taxed later like it is with a 401(k). 

There are a handful more options like Health Savings Accounts that might be a better fit for your needs, so be sure to familiarize yourself with all of the most common retirement account options before making a choice. 

Above, I’ve outlined just some of the best ways to invest your check, but there are countless others. So, if you can afford to invest your third stimulus check, go for it! It’s just getting hammered by inflation, otherwise. 

Read more:

  • 12 Ways To Spend Your Stimulus Check To Improve Your Finances
  • How To Apply For The New Round Of COVID-19 Rental Assistance

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