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How to Invest $100k: 15 Different Ways

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So you are looking for ways to invest $100k but don’t know where to start, well the good news is that you have lots of options.

Growing a small account progressively can seem rather challenging for beginner investors. However, the task of building a portfolio for a larger account with $100,000 or more is not necessarily easier.

Even though there are more alternatives in terms of the kind of vehicles that can be used to invest in certain assets, there are also multiple factors to consider to make sure the principal is relatively safe and growing at an attractive pace every year.

In this article, we share some options that investors may want to consider in case they have a sizable war chest of at least $100,000 that needs to be allocated into investment-worthy opportunities.

Before You Begin Investing $100k

If you have $100,000 at your disposal, you might feel a bit overwhelmed when picking which investments to go with. 

Before you start considering all the available options, you should first determine your expectations and the kind of risks you will be comfortable taking. These factors will vary from one person to the other and they will probably be influenced by how the money was obtained and what kind of plans they have for it in the future.


The first step to take before you start investing $100k is to determine what your goals are from a financial standpoint.

There are some basic goals that most people have, such as buying their first home, getting married, setting money aside for the kid’s college, taking a trip, establishing an emergency fund, building wealth, or establishing a retirement fund.

Depending on what your goal(s) are, your risk tolerance and expected return could vary significantly.

Time Horizon

Your investment horizon will determine how aggressive your approach should be to achieve the goals set forth previously. For example, young individuals have time on their side when it comes to building wealth as their investments will compound for a longer period. 

Regardless of what your goals are, the deadline for achieving your objectives will be a crucial variable to select which asset classes you will incorporate into a portfolio of $100,000 as the returns produced by these instruments must be sufficient to increase the value of the account to that predefined target.

Risk Tolerance

Not everyone is built the same when it comes to taking risks. A person’s attitude toward risk varies depending on multiple factors, including their past experiences and how old they are.

Depending on your risk tolerance, the kind of investments you might feel comfortable with will vary. 

Active vs. Passive Investing

Active investing means that the person will take a hands-on approach in the process of building a diversified portfolio. That includes researching and assessing all the available opportunities and making timely adjustments to maintain the portfolio’s target weights, etc. 

Meanwhile, passive investing means letting someone else take over this task or putting the portfolio in auto-pilot mode by signing up for an automated investing service. 

Financial Situation

A person’s financial situation will influence their decisions when allocating $100,000 into different investments. For example, if your liquid net worth exceeds this amount by more than three or four times, you might be comfortable with assuming a lot more risk than someone who will depend on the proceeds earned from this portfolio to cover his/her living expenses.

15 Ways to Invest $100k

Now that we have touched ground on the steps you should take before investing $100,000, here’s our list of the top alternatives for those who have this kind of cash at their disposal.

1. Invest in Solid Growth Stocks 

Growth stocks are equity instruments (common shares typically) issued by companies with potentially disruptive business models and promising prospects. These businesses are typically revolutionizing their respective industries and have attracted the interest of both customers and investors through their innovative value proposition.

The best growth stocks are those that display some of the following characteristics:

  • Highly disruptive business model
  • Double or triple-digit annual revenue growth 
  • Clear path to profitability
  • Manageable debt or no debt at all
  • Founder-led
  • Large total addressable market (TAM)

One great example of a successful growth stock is Netflix (NASDAQ: NFLX). The video streaming giant managed to grow its revenues from $3.1 billion in 2011 to $24.9 billion by the end of 2020 resulting in a compounded annual growth rate of 26%. During that same period, the number of subscribers moved from 21.5 million to 192.9 million at a 23.2% CAGR.

In the past 10 years, Netflix’s share price has gained 37.6% per year on a compounded basis.

You can build a diversified portfolio of growth stocks of the most promising businesses in up-and-coming industries as part of your strategy to invest $100,000.

2. Invest in Proven Dividend-Paying Stocks

Dividend stocks are those that offer a combination of an attractive yield, stable financial outlook, and high odds of increasing distributions in the future.

The best dividend stocks are mature companies with a proven business model, a strong brand, and whose financial performance is relatively predictable.

One example of a solid dividend stock is Kimberly Clark (NYSE: KMB). This company currently offers a 3.6% dividend yield. In the past 10 years, the company has increased its dividend by an average of 5% and paid distributions uninterruptedly for 50 years.

3. Invest in ETFs

Exchange-traded funds (ETFs) are vehicles through which you can invest in a diversified basket of securities of a certain asset class or that qualify for a specific investment strategy.

ETFs trade as if they were a regular stock, meaning that you can build a portfolio easily through your preferred brokerage firm. 

These funds can be divided into different categories depending on the strategy they follow, their tactical approach, and other similar criteria. Here’s an example.

  • By geography: Focused on a specific country or region
  • By strategy: Dividend, growth, or value
  • By industry: Healthcare, oil & gas, technology
  • By asset class: Equities, fixed-income, commodities
  • By tactical approach: Actively or passively-managed

The annual management fees charged by ETFs tend to be low and their diversified nature allows investors to get exposure to some promising segments of the market without relying on their stock-picking skills to do so.

Some of the brokers that currently offer access to zero-commission ETF trading include Public, Robinhood, and TradeStation.

4. Invest in Mutual Funds

Mutual funds are investment vehicles managed by professionals that also provide exposure to a diversified basket of instruments. They tend to specialize in a particular asset class, geography, or industry as well as exchange-traded funds (ETFs) but they are structured differently.

With mutual funds, investors buy shares directly from the fund’s parent company and the minimum required investment tends to start at $1,000 or $2,000. 

Fees tend to be higher depending on the strategy and approach followed by the fund and non-trading fees include load fees and early redemption fees.

You can invest in mutual funds through companies like Firstrade, Charles Schwab, and other traditional brokerage firms.

5. Invest with a Robo Advisor

Robo-advisors are automated and passively-managed investing solutions that rely on an algorithm to build a portfolio on behalf of investors based on their unique financial goals, risk tolerance, and other aspects.

Investors typically have to answer a questionnaire that will help the robo-advisor determine the optimal portfolio composition for that person in particular. Once that step is completed, the system will use low-cost exchange-traded funds (ETF) to quickly build the proposed portfolio.

Robo-advisors will also handle some of the routine tasks of portfolio management such as rebalancing. In some cases, some advanced features are also supported, such as tax-loss harvesting.

Robo-advisors are typically cheaper than human advisors and companies like Betterment have been offering these services for years now with fees starting at just 0.25% of the account balance per year.

6. Invest in Publicly-Traded REITs

Real estate investment trusts (REITs) are vehicles that allow investors to get exposure to the real estate market without having to own a property directly.

REITs typically specialize in a segment of the market, such as residential, commercial, or telecommunications properties. Investors are compensated via capital gains if the market price of the properties held by the trust and their earnings-generation capacity grows and through periodical dividend payments.

Most REITs trade as stocks in a public exchange and a portfolio can be easily bought through a brokerage firm. Some ETFs also offer exposure to a diversified portfolio of multiple REITs.

Some of the largest US-listed REITs are Crown Castle (NYSE: CCI), Prologis (NYSE: PLD), Equinix (NASDAQ: EQIX), and Simon Property Group (NYSE: SPG).

7. Invest in Real Estate Crowdfunding

Real estate crowdfunding is an activity that consists of pooling money from a group of investors to finance a certain real estate deal. Sponsors are in charge of promoting and structuring the transaction while investors can participate either as lenders or shareholders.

Investors earn money either through periodical dividends paid by the company or interest payments made toward the loan they have issued. They might also benefit if the property is eventually sold at a higher price.

Real estate crowdfunding platforms, such as Fundrise and CrowdStreet, are among the most popular websites through which investors can participate in this kind of opportunity.

8. Invest in Cryptocurrency

Cryptocurrencies made their appearance in 2009 when an anonymous cryptologist named Satoshi Nakamoto presented a whitepaper for a peer-to-peer, decentralized payment solution known as Bitcoin (BTC). The rest is history.

Cryptocurrencies as a whole have grown to become a $2 trillion ecosystem and innovation is the name of the game, as developers are aiming to revolutionize entire industries by creating decentralized solutions that can power real-world businesses.

To some, cryptocurrencies and their underlying technology — the blockchain — are at this moment what the internet was back in the early 2000s. For this reason, many consider this entire asset class a huge investment opportunity. 

Keep in mind that since this is a young industry, risks abound and you must research every project you invest in thoroughly so you feel comfortable with how exposed your portfolio is to this space. As a rule of thumb, a moderately aggressive portfolio should assign a weight of no more than 10% to cryptos.

Investors can buy cryptocurrencies through a well-known exchange such as Kraken, Gemini, or Coinbase. However, we strongly recommend you keep your crypto in cold storage to avoid it being hacked.

9. Invest in Gold

Gold has been considered a safe haven and a store of value for centuries as this precious metal has been widely accepted by governments and individuals as a means of exchange to settle commercial transactions.

Gold’s durability and its practical uses in jewelry and certain industrial processes add an extra layer of attractiveness as a potential investment opportunity. That said, in the past 10 years, gold has delivered a positive 1.2% return on a compounded basis. 

Whether gold is an appealing investment or not depends on the investor’s opinion regarding the state and prospects of the global economy.

In any case, investors can either opt to buy and store physical gold, through services such as Vaulted, or they can buy an exchange-traded fund (ETF) that tracks the price of the precious metal such as the SPDR Gold Shares ETF (NYSEARCA: GLD) or the iShares Gold Trust ETF (NYSEARCA: IAU).

10. Start a Business

For those with an entrepreneurial spirit, it might not be a bad idea to make one of their ideas come to life by bootstrapping and starting a company. Innovation has opened multiple opportunities in the tech and energy space. However, you should start a business in a field that you understand and that matches your skillset, experience, and background.

You might not opt to invest the entire $100,000 in a single business but even $20,000 might be enough to get you started depending on what you have in mind. You can also look for seed capital to increase your initial budget.

11. Invest in a Small Business

Angel investors are individuals who pour their money into projects that are currently in the earliest stages of their development with the hopes of finding the next Apple, Amazon, or Google hidden in some garage office.

This might be a particularly attractive alternative to retired folks who have already built a successful business or two or have climbed to C-level positions during their career. The reason for this is that they have the kind of industry-specific insight that could allow them to identify potentially successful startups before they get to that point.

Platforms such as Mainvest and Wefunder have created a marketplace through which investors and founders can interact and make deals.

12. Invest for Retirement

Retirement accounts are a great alternative for investing $100,000 as they offer tax advantages. These accounts postpone the payment of taxes on the gains obtained until the person withdraws money from the account.

As a result, the taxes that would have to be paid if this was a traditional investment account are reinvested multiple times and produce gains on behalf of the investor — also known as compounded interest.

401(k)s and individual retirement accounts (IRA) are some of the most popular retirement vehicles used by investors to take advantage of this. Most brokerage firms allow individuals to open an IRA

In some cases, your broker could even offer an automated passive investing solution that will allow you to put your retirement fund in auto-pilot mode.

Right now, a person can contribute up to $20,500 for a 401(k) and up to $6,000 for an IRA if they are younger than 50. If you have $100,000 to invest, you may opt to max out your retirement accounts.

13. Money Market Accounts (MMAs) and Certificates of Deposit (CDs)

Perhaps one of the safest and most traditional ways to invest money is to rely on the products offered by top financial institutions as is the case of Money Market Accounts (MMAs) and Certificates of Deposit (CDs).

These are low-risk/low-reward products that lock an investor’s capital for a certain period in exchange for a relatively small interest rate that is paid periodically or once the contract ends.

Money market accounts typically invest money in highly liquid short-term fixed-income securities such as Treasury bonds while CDs are issued and backed by the financial institution itself.

Even though this might sound like an appealing choice if you are a risk-averse person, keep in mind that the interest rate paid on these instruments is very low and, in an environment of high inflation, the purchasing power of your capital could suffer as a result of negative real returns.

14. Invest in Bonds

Bonds are fixed-income instruments that entitle the holder to receive periodical interest payments along with the repayment of its principal once the maturity date of the bond has been reached.

Bonds have been considered for decades a must-have for any investment portfolio. However, their appeal has declined recently as record-low interest rates in the United States have prompted investors to embrace riskier and potentially more rewarding assets.

In an environment of high interest rates, bonds are typically attractive investments as long as both the interest and principal are considered to be relatively safe. Bonds are rated by financial services firms based on the odds that the issuer could default in the future.

Bonds can be classified in many ways. Here’s an overview of how they are typically categorized by financial professionals:

  • By rating: Investment-grade, junk bonds
  • By maturity date: Short-term, intermediate-term, and long-term
  • By issuer: Corporate, municipal, government
  • By geography: Domestic, foreign, emerging-market

Investment-grade bonds are less risky than junk bonds but they offer lower yields. To the lay investor, bond funds are a good alternative to invest in this asset class instead of having to choose among the vast range of available instruments.

These funds can be bought through a traditional brokerage firm, whether they are structured as ETFs or mutual funds. In addition, some brokers may give investors the possibility of buying individual bonds. 

15. Peer-to-Peer (P2P) Lending

Peer-to-peer (P2P) lending is a relatively new investment opportunity that consists of cutting the middleman out of a regular lending operation. To achieve this, individuals lend money to each other through a platform that helps them in the process of establishing the conditions and settling the transaction appropriately.

By cutting the middleman, investors get to keep the bulk of the proceeds earned in the form of interest payments in contrast to the regular arrangement with banks where depositors are paid a small interest rate for letting their money sit on an account safely.

Of course, P2P lending is considered riskier than a traditional savings account but a diversified portfolio composed of top-quality loans can end up producing double-digit annual returns. 

This return is much higher than what a savings account would produce during the same period and, even though there are risks involved, they are more than justified for the additional capital gains produced by this activity.

Some of the most popular P2P platforms available to US investors include Prosper and Funding Circle.

Final Thoughts

If you have $100,000 to spare, at least two or three of the alternatives we discussed above have probably sound like an appealing choice as potential investment opportunities. What you are attracted to will largely depend on your financial goals, risk tolerance, and other similar factors.

Make sure you diversify your assets across a decent number of uncorrelated opportunities instead of putting all your eggs in a single basket. That way, you will keep risks in check and you’ll probably sleep better.

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