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How to invest $100K

5 investment options to consider if you have $100K

Your investment options are wide-ranging when you have $100,000 to invest. Stocks, real estate, fine art — very few asset types are out of reach.

In considering your investment style, risk tolerance and goals, here are five investment options if you’ve got $100,000.

  1. Stocks or exchange-traded funds (ETFs)
  2. Robo-advisors
  3. Real estate investment trusts (REITs)
  4. Retirement accounts
  5. Alternative investments

1. Stocks or exchange-traded funds (ETFs)

Investing your $100,000 in individual stocks or ETFs has historically proven to be one of the most profitable options. Depending on your goals and risk tolerance, you can invest in index funds or take a risk with a small percentage of your account and consider riskier ETFs and stocks.

  • Profitable in the long run. The S&P 500 index alone has had an average 10% annual return in the past 90 years. With compounding interest, you could earn over $870,000 with a $50,000 one-time investment over 30 years.
  • Variety of options. Invest in any publicly traded company you want from any sector, or invest in ETFs and hold baskets of stocks with a single transaction.
  • Convenience and high liquidity. ETFs are one of the most convenient investment options because you get exposure to a whole sector or industry by investing in a single fund. There’s also high liquidity for stocks and ETFs, meaning you can buy or sell these assets whenever you want during market hours.
  • Volatility. Markets fluctuate often. If you need to withdraw your funds during a financial crisis, you would likely suffer losses or have to settle for a low return on investment.
  • Requires research. Choosing where to invest $100,000 means researching the right stock or ETF. This requires going through company balance sheets and other data to find the right candidate.

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How $100,000 can grow

With $100,000 you can build a diverse portfolio or add to an existing one you want to emphasize. Your money can grow dramatically long term and quickly even in shorter periods. Here’s a look at how it might grow in three common investment classes.

$100,000 saved or investedSavings accountBondsStocks
1 year$104,000$105,330$110,000
5 years$121,665$129,646$161,051
10 years$148,024$168,082$259,374
15 years$180,094$217,912$417,725
20 years$219,112$282,515$672,750
25 years$266,584$366,271$1,083,471
30 years$324,340$474,857$1,744,940

For this table, we assumed:

  • A 4% annual return on a high-yield savings account.
  • An average 5.33% return for a bond portfolio, on Vanguard’s historical return data.
  • 10% on stocks, the market’s long-term annual return.

Bond returns vary widely based on bond types, and the stock market has down years while individual stocks can go to zero. So consider these benchmarks only and consider risk as well as return.

2. Robo-advisors

Robo-advisors are algorithms that automatically invest your money on your behalf based on parameters that you set, such as your risk tolerance. This gives you the opportunity to invest $100k in the stock market without doing tons of research.

  • The computer algorithm takes over. You don’t have to do the research; you simply set parameters, like risk tolerance, and the robo-advisor invests in mutual funds or ETFs that match.
  • Invests in ETFs and mutual funds. Robo-advisors invest in ETFs and mutual funds, which makes them a relatively safe option compared to investing in volatile assets like crypto, NFTs or penny stocks.
  • Less expensive than a financial advisor. Hiring a human financial advisor costs more than paying a robo-advisor.
  • Robo-advisors lack human interaction. A robo-advisor can’t help you develop a long-term financial plan.
  • Can’t handle complex portfolios. Robo-advisors are typically a good option for portfolios worth five figures. If you’re planning to invest all $100,000 in a robo-advisor, you may want to consult a financial planner first.

3. Real estate investment trusts (REITs)

Spending your entire $100,000 on a property is a high-risk investment with no diversification. REITs help mitigate this problem. Invest as much as you want in a REIT, but typically, the minimum is $5,000, which comes out at 5% of your $100,000.

  • Access to expensive real estate with less money. Investing in real estate through REITs or crowdfunding platforms is a cheaper way to get exposure to this type of investment than buying a property directly.
  • Earn rental income. REITs invest in housing as well as in commercial space. This gives REITs investors access to rental income through dividend payments.
  • Some REITs are publicly traded. You can buy and sell some REITs on the stock market as you would buy any other stock. This gives you high liquidity to enter or exit if you no longer wish to be invested.
  • High taxes. REIT dividends are often taxed higher compared to dividend-paying stocks. This could be as high as 37%, depending on your tax bracket.
  • Low liquidity. Privately traded REITs may have low liquidity, so it might be hard to sell your investment whenever you want.

4. Retirement accounts

No matter your age, you should contribute to your retirement account until the time comes to reap the benefits. Assuming you already maxed out your 401(k), you can now max out your IRA account. The maximum contribution for an IRA in 2023 is $6,500 — or $7,500 if you’re 50 or older. An IRA offers a higher variety of investment options than a 401(k).

  • Tax benefits with 401(k). If you haven’t maxed out your 401(k) yet, you may want to do so. This is similar to investing in the stock market, except you get tax advantages.
  • Matching contributions from your employer. 401(k) accounts may come with a company match, meaning you get “free money” in your account.
  • Meet your retirement goals. Save as much as possible to ensure your income is enough to support your lifestyle later on.
  • Withdrawal limitations. Withdrawing your funds before you reach 59½ may come with penalties.
  • Deposit limitations. The 2023 contribution limit is $22,500 for 401(k) and $6,500 for an IRA.

5. Alternative investments

Alternative investments, such as non-fungible tokens (NFTs), historic works of art, collectibles and more, are another way of diversifying your portfolio. However, these assets typically come with high risk and high rewards.

  • is a trading platform that lets you invest in crypto, NFTs, fine art and collectibles. All you have to do is buy shares of these assets like you would buy company shares on a stock exchange. What’s more, you can buy fractional shares if you don’t want to invest a larger amount.
  • Masterworks acquires art and securitizes it to create shares available to investors, which lets you invest without holding or storing the physical asset itself. Multiple investors can own shares of the same work of art. To start, you need to invest a minimum of $15,000.

How to invest $100,000 to make $1 million

This strategy requires a similar approach as that for passive income, but your goal should be long-term. This means you invest your $100,000 in the same assets but hold them for 20 years or more to reach $1 million.

An alternative approach is to invest in riskier assets and stocks. Blue chip stocks are typically the largest companies with a strong balance sheet but are unlikely to appreciate 10 times in a short period.

Small-cap companies can either be bought by larger companies — often at a higher price than the market price — or grow to become large-cap companies if they offer great and competitive products or services. Finding such companies requires a good amount of research, though.

Before you invest: Determine your investment goals

Before you figure out where to invest $100,000, it’s important to have a goal in sight.

Investors who want a hands-off approach to investing with minimal intervention would find robo-advisors a decent option. These computer algorithms trade on your behalf and continuously rebalance your portfolio for a minimal annual fee.

Investors who prefer to do the work themselves are likely better off with individual stocks and ETFs, including real estate investment trusts (REITs) — a great option for investors regardless of their risk tolerance.

Bottom line

  • You can invest your $100,000 in a variety of ways, including in the stock market and in real estate, or you can let a robo-advisor manage your portfolio.
  • Typically, the best way to invest your funds is to diversify between multiple assets.
  • Each investment option comes with its own pros and cons.

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