If you are reading this article, then it probably means you are either working actively towards amassing wealth to the tune of a $100k or you’re hoping to win the $100,000 Financial Freedom campaign to change your life. Either way, it’s smart to learn about how to invest and not spend this huge amount of $100,000, even before it hits your savings account.
It’s important to remember that $100,000 will not guarantee your long-term financial security unless the money is invested in ways that allow it to fully compound. With that in mind, here are 13 practical ways to invest $100K without much hassle.
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Riskier Alternatives to Invest Your $100,000
Make sure you weigh your options before investing. It’s generally a good idea for most people to have set aside an emergency fund and have paid off all their funds before investing in speculative and riskier options. Once you have this taken care of, you can move forward with the best way to invest $100K safely.
1. Invest $100,000 in real estate
One of the easiest ways to grow your money is to invest in real estate. In our recent post about the best personal finance books, we learned about Robert Kiyosaki, author of ‘Rich Dad Poor Dad’ who learned to quickly grow his money by making down payments for rental properties and gaining profit by selling the property later at a higher price. Unfortunately, this option does require some real estate knowledge that not everyone has.
Wouldn’t it be great if you could invest in commercial real estate and apartments without dealing with all the hassle of buying, improving, and re-selling real estate? You don’t have to be a millionaire to invest in these types of properties. You can now invest in large-scale real estate for as little as $500 with Fundrise. Through their real estate investment products, investors earned an average of 8 – 11 percent on their money last year, and all without painting a wall or dealing with unruly tenants. There is a reason why they currently have over 200,000+ users, this app really pays you! If you’re interested, I recommend you sign up for more information from Fundrise by clicking here.
Fundrise is a very easy-to-use app that allows individuals to access crowd-funded real estate investing. This option is best for users who want to make money consistently and let their money make them money.
You could also invest your 100K in raw lands. Investing in lands is a profitable venture because of one key reason: land is scarce and its demand will always exceed its supply.
Another way to invest in real estate is by buying a property and renting it out. With the ever-increasing inflation rate, rents will go up while your mortgage payments stay the same. This increases your cash flow and your rental yield as an investor.
2. Invest $100k in peer to peer lending
Did you know that you could lend out money and earn passive income? Believe it or not, you can lend out money and get paid interest on your money at LendingClub. As of recently, this has become known as a great return on your money, investors have started putting their money into peer-to-peer lending companies like LendingClub.
How does it work? By lending out your own money to peers in the form of personal loans, you are able to earn interest – similar to the way that banks and other lenders produce income. This is a way to make a direct impact on the lives of people.
The best part? It’s so easy to open an account and begin investing in this passive income venture. But, think of it like this – if you put only $345 into an investing account at Lending Club and earned 14% a year (pretty easy to do at Lending Club, you’d have $180,377 saved up in 30 years!
3. Invest $100,000 in index funds
Investing in index funds is like investing in the stock market without taking on too much risk. The risk of investing in index funds is very minimal yet the benefits are massive. The trick is to diversify your stocks by buying the largest companies through your index fund. If are you looking for a new investing app to invest your 100k, see below:
If you are interested in buying index funds, Fidelity or Vanguard is a great option as they have extremely low fees (About 0.05% of profits). Or if you are interested in service which will manage the buying and selling of index funds for you and automate the process, Robinhood and Acorns are both great options that only charge low fees. All you do is set up an account, choose your risk tolerance and deposit your funds. Their service will automate the rest!
Robinhood has commission-free investing for stocks, options, ETFs, crypto, and tools to help shape your financial future. Sign up and get your first stock worth up to $225, free.
Pro-tip: There are several companies out there that will give you free money to invest in stocks or are currently offering stock broker promotions.
4. Start a business with $100K
Invest your 100k in that promising business venture you put on the back burner for lack of money. If it is a high-risk business be sure to conduct research into your prospect, seek expert advice and develop a solid business plan before starting out.
Or you can look into buying a franchise, here are the 100 best franchises opportunities you can start for less than $100,000.
5. Build passive income with rental income
Wouldn’t it be great if you could become a landlord of single-family rental properties without dealing with all the hassle of buying, improving, and re-selling real estate?
You don’t have to be a millionaire to invest in these types of properties. You can now find your inner property owner with Roofstock.
As with any other rental property, investors earn returns from the rental cash flow and any appreciation in the property value when it’s sold, and all without painting a wall or getting your hands dirty.
There is a reason why the number of investors on its platform increased 126% last year, the sector is booming with investors clamoring to get a return outside of stocks and bonds.
If you’re interested, I recommend you sign up for more information from Roofstock by clicking here.
Roofstock allows you to purchase a slice of a rental home allowing you to earn passive income. Build your passive income stream by buying cash flowing rental property.
Safer Alternative Ways to Invest $100k
6. Pay off your debt
It may sound odd but paying off your debt is the first and biggest investment you can make with $100,000 in your account. The interest on any debt you have grows with time and the sooner you pay it off, the more you will save.
7. Invest in a cash account
This is necessary because it gives you access to your money and makes it easy for you to meet your financial obligations. Apps like Qapital and Digit can make investing in a cash account easier.
Digit’s technology uses financial best practices to calculate smart amounts to save and invest each day.
8. Short-term government bonds
These are bonds with maturities of less than five years. They don’t yield much but they have lower risk and preserve capital.
9. High-yield savings account
This is another way to invest your 100k. It’s much more profitable than the normal savings account. Your money can sit in there and accrue some interest until you are ready to invest in bigger and more profitable ventures. If you are looking for a new savings account, check out our below our most updated list of the best savings accounts available to you.
If you are looking for the best savings apps, you can find that here.
10. Invest in yourself
Investing in yourself is one of the best investments you could ever make and it can take many forms: pursuing a creative project, nurturing a talent taking a course, or learning a new skill. There are a couple of companies that offer online learning courses that you could take to jump-start your career. Here are some of the best online courses:
If you find it difficult to find time to take online courses, you can download them onto your smartphone and study while you’re on the go.
By working towards improving your skills and education with online courses, you get in the right habit and build your resume for free and fast-tracking your career.
11. Annuities
This is a low-yielding investment which could pay as low as 3% on your capital. The advantage is that your capital is kept safe and your returns are guaranteed.
12. Donate to charity
One of the best ways to invest a 100K is to make an impact in the lives of the less fortunate through charitable giving. Investors who are into impact investing also get tax deductions.
Pro Tip: Omaze’s Financial Freedom campaign is donating a portion of all proceeds to GivePower. GivePower is a nonprofit dedicated to providing clean water and food security to communities around the world.
13. Invest in an emergency fund
One wise thing to do once you have your 100k in hand is to set up an emergency fund or fund it if you already have one. It will shield you from life’s unpleasant surprises. Acorns is a good app that you can use to place your funds in while saving for an emergency fund.
Acorns is your guide to financial wellness. They’ll help you invest, save and spend smarter starting at just $1 per month. There’s no catch. This app is legit and only takes two minutes to sign up for an account.
Best Ways to Invest $100K Summary
Don’t worry, even if you aren’t fully experienced with investing, there are ways to invest it without taking big risks with your 100k.
Just remember, before you start investing make sure you have an emergency fund set aside and have paid off all of your debts.
