15 Smart Ways to Invest $100,000 Today

I know $100,000 is a lot of money to be talking about for most people. But if you take a look at my advice on investing with little money, and investing as you earn more money, you can reach the point where you have $100,000 to work with.

Truly I can give you 15 smart ways to invest $100,000 today, along with some other useful tips any investor can use. When you know how to invest properly you can take any sum of money and make it grow. Compound interest alone can be a part of growing your wealth.

With the information I can give you right now you can start planning. This is the kind of money that can make a large impact on someone’s life. Whether you had to work hard to reach this sum, inherited or even got lucky on the lottery, investing a good chunk of it is the best option.

A promise of financial security is hard to ignore

There is no doubt that people who are wealthy, have always had money and have built up a huge amount of wealth see money very differently to the rest of us. When you have worked hard for every cent of whatever amount you have saved to invest, it means a lot more to you. Which means making intelligent investment decisions is vital.

But wherever your $100,000 has come from, there are still things to think about before you take that step to invest. So what should you do first?

  • If you have not already done so you need to clear off your debt, especially any high interest debt like the kind you get with credit cards. It can impact your credit score, and cost you money in that interest alone.

If you have student loans, a mortgage, or a personal credit line as tempting as it might be to use it on something big like a house, clear your debt first. Specifically clear away any non-deductible debt you might have. Newport Partner’s chief wealth officer, David Lloyd says, “Don’t assume you need to spend or invest the money.”

Let’s say you have $100,000 but have $50,000 still in student loans. Over the next decade you     would pay about $23,000 just in interest on that debt. That is a clear loss. Clearing it off now             saves that money. Then you have $50,000 to work with which is a good investment sum still.

  • Retirement Fund – In all probability if you are someone with $100,000 to invest you are most likely already on top of your retirement fund. Everyone should have some form of plan for their retirement. A 401k or IRA or both even. So if you are behind on this, get it moving.

There is a limit to how much you can invest into each one. Put in as much as you can to your 401k so that you get that contribution matched by your employer. The max a year is $18,000. Then the Roth IRA max is $5,500 a year. They will build up interest and increase the amount you get when you retire.

  • Set aside a cushion to fall on – Basically make sure you have a nest egg to turn to should things not go well. Make sure it is somewhere safe. If you already had one prepared consider padding it a bit! This won’t take the sting out of any losses but it will soften that sting.
  • Treat yourself but don’t go crazy! – often my advice to people investing is to skip the immediate gratification and think long term. But if this is your first $100,000 and you worked hard to get there you deserve to set some aside to have fun Now I would never advise you to spend all or even half of it on luxury items. But work cannot just be about long term plans. When you are at a point where things are a bit easier, it is okay to take a holiday or upgrade your phone.
  • Do your research. Hopefully you are used to this from investing smaller amounts. You will need to reach out to different advisors or do some online homework. While my advice is a great starting point to get you looking in the right direction for investing $100,000, there is more to learn.

Hopefully you will find that these investment options are a good balance of risk and growth. You also should find a balance between investments that bring in short term, mid term and then long term income.

There is nothing wrong with having a high interest savings account and keeping some in there. That might even be where you decide to park your nest egg. But that is not the best option for earning money and improving your wealth. So think about what kind of investor you are or what you want to be.

  1. A DIY investor – this means you prefer to avoid fees and paying others to do it for you. You want to have control on creating and managing your investment portfolio. For you there are online brokerages you can open an account with and choose what you want to invest into.
  2. You want it automated – this means you are still looking to have low costs involved but also do not want to be fully involved. A Robo-advisor is one way to achieve this. You set up an account with one and it will manage the portfolio and invest for you. You do not get the personal touch with advisors this way though.
  3. Full service – you want a financial advisor to guide you with all their experience and knowledge at your fingertips. They will make suggestions, do all the managing and planning but talk to you about it.

A quick look at your options in terms of risk

There are a lot of options out there when it comes to investing $100,000. Some want low risk options, some are bolder and some want a mix. There is no option that is completely safe, but here is a quick list of low, mid and high risk investment opportunities to consider.

Low or lower Risk options include;

  • US Savings bonds
  • TIPS (Treasury Inflation Protected Securities)
  • Peer to Peer lending
  • ETFs and Money Market Funds
  • Certificates of Deposit
  • Annuities
  • Cash Value Life Insurance
  • Municipal Bonds

Mid risk options include;

  • Preferred Stock
  • Mutual Funds and Dividend Paying Stocks

Higher mid to high risk investment options include;

  • Venture Capital
  • Rental Houses
  • Penny Stocks
  • IPOs or Initial Public Offerings
  • Precious Metals
  • Options
  • Emerging Markets
  • Futures
  • Collectibles

Here I am happy to present 15 Smart Ways to Invest $100,000 today!

What will be covered

  1. Invest in Real Estate – several options will be outlined for real estate investment. It is often a solid investment for either short term, mid term or long term rewards.
  1. Blue Chip Stocks – these are stocks that have a long term good performance.
  2. Start your own business or invest in one – there is more work involved in this option and more risk. It is not easy to get a new business off the ground. But the potential rewards and benefits are great.
  1. Peer to peer lending – basically you the investor become a lender and you make money on the interest charged on the loan you make.
  2. Index Funds – if you want something lower risk but with decent returns this is a good investment choice.
  3. DIY Investing – a hands on approach to investing $100,000.
  4. Motif – An online platform that allows for hands on investing and diversification.
  5. Invest how Warren Buffet suggests – “Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund.”
  6. CDs or High Yield Savings Accounts – lower risk but the high yield in its name is misleading, these do not give huge returns.
  7. Annuities – for those who need some investments that come with guaranteed returns.
  8. You and your education – go back to college and get a degree, get some coaching, earn a designation.
  9. A little extra for retirement – even with your 401k maxed and an IRA it is always a good idea to have several investments aimed at retirement.
  10. Registered Education Savings Plans or RESPs – get some money working on your kid’s education.
  11. Diversification – Vary your investments, their payout periods as well as their risk levels.
  12. Life insurance options – Take out a life insurance policy to be gifted to a charity of your choice when you die. For people who have several hundred thousands already working for them who want to pay it forward.

So here are my 15 options in more detail if you have $100,000 ready to invest now.

1. Invest in Real Estate

If you are looking for an investment that will last for many years then consider starting with real estate. It is a solid and mostly secure option when done right. It might not be the most thrilling or flashy option but investing should not be about looking for showmanship. There are several options when I talk about real estate investment.

  1. Buying some land to sell or that has a resource on it that can be used.
  2. Get a property to rent.
  3. In a down payment on your own house.
  4. Invest in a crowdfunded property.

Buying land – land that does not have any property built on it is called raw land. There are a number of reasons you might invest in this. It may be land you think will be in demand at a later time. It might be a place you intend to develop at some point. Or it could be because of the resources that are on the land. Trees can be cut down for lumber. Some even discover crude oil.

Buy a property to rent – being able to purchase a property will very much depend on where you are. Some could actually buy a place to rent for that, some will have to put a down payment. Either way you can then rent out the property whether it is a house, condo or duplex. If properties are way out of your price range look to buy out of the city or in areas that cost less or join a partner in the venture.

Importantly you should be prepared for the work that being a landlord will entail. Unless you pay someone to take care of your tenants and property for you, there is a lot of management involved and time to give up. Sometimes you might get some easier tenants and then it is a fairly easy income coming in.

Buy a property for yourself or put a down payment on one – Financial advisor John Robinson says paying off your mortgage or putting a big payment on it is a good idea.

Investing with Crowdfunding – Another option when investing in real estate is to choose crowdfunded ventures to join. There are platforms to use like Fundrise and these allow you to connect with others to invest in real estate together. This does mean you share the income but it spreads the cost too. Professionals then manage the properties for you all. On Fundrise the minimum investment is just $1000 and the average return is upward of 13%.

2. Invest in Blue Chip Stocks

With some carefully planned risk, blue chip stock investment can help you multiply that $100,000. These are individual stocks that have proven their stability and performed well over a longer period of time. This means while there is still some risk, it is not high risk. You invest in companies that have been around a long time and are expected to be around for many more still to come.

To invest in blue chip stocks you need to have an account with a brokerage. If fees are what put you off using an investment company just shop around. There are many today realizing that in order to compete with online options they need to lower those fees.

Reasons to invest in blue chip stocks include;

  • Lower risk stock investment option
  • Can invest in small amounts
  • Trusted products and companies known worldwide
  • With regular investment and care by retirement you could have a return in the seven figures

3. Start your own business or invest in one

If you have always had an idea for a business, and you truly think it has a good chance at being successful, now you have $100,000 to invest perhaps it is time. There is risk of course. Businesses do have a high rate of failure unfortunately. You need to do your homework and ask yourself and some experts a lot of questions.

When starting a business you should;

  • Research to see if the idea is even viable as a business.
  • Consider the costs involved.
  • Is there a market or need for the business and where would it go?
  • Can you manage should it fail?
  • Create a business plan with an expert.
  • Learn about your business before starting your own – for example if you want to open a gym talk with or work in a gym to learn the ropes.
  • Go to business school possibly.
  • Keep asking and answering the tough questions.

You might also choose to invest in a business being built by someone else. In this case you still need to know about running a business and about their area of interest. You do not want to hand over a lot of money to something you know little about. You need to be sure your trust and investment is founded. Be critical and analytical through the whole process, even if you are investing with a friend. The more you educate yourself in either situation the more chance there is of the business being successful.

4. Peer to peer lending investments

People looking for a loan for whatever reason might decide to avoid the more difficult avenue of a bank, plus their fees, and go to a peer to peer lending site. Investors like you are basically the lenders. You decide how much you are willing to invest or loan, and decide who you will loan to using the information provided.

That should cover things like;

  • What they are borrowing money for – to pay off debt, start a business etc.
  • What their credit history is like.
  • What their debt to income ratio is.

Investors can diversify a great deal by making small payments to several loans and so spread the risk if they want to. The risk of the loans are also graded by companies like Prosper or Lending Club so that if you want low risk but a lower rate of return you would go for options graded A to B or C. If you wanted high risk with high reward you go for C or D to G. The risk is of course how likely that borrower is to not pay back that loan.

The minimum you can invest in one loan is $25. Lending Club recommends investors put in $2500 to start with. You can then spread that out across 100 separate loans. With a larger sum like $100,000 you may want to start at $5000. Great option if you are looking to diversify away from your traditional portfolio investments.

5. Index Funds Investment

The reason why I and other financial advisors appreciate index funds is their visible growth history. You can check the stock market and see how they have been doing, you can see the growth in returns they offer. They allow for good diversification which means you are spreading the risk. Index funds also tend to have low fees. Why spend a lot of money on fees and costs if you do not have to?

A great example of what I am talking about can be seen with Vanguard index funds. Over ten years of stock market action shows these index funds have a rate of 9 to 11%. Sometimes they have gone higher.

Index Funds are;

  • Stocks from a variety of industries with a history of good stock market performance.
  • A good investment option with a good return percentage and allowing for diversifying.
  • The stock market equivalent of the adage slow and steady wins the race!
  • Almost as close to a sure thing in investment as you can get.
  • Low risk.

But as with any kind of investing, you need to do your homework. Not all index funds are equal so take some time to learn about the ones you are specifically interested in. Make sure too that you know their performance history.

6. DIY Investment

If you consider yourself to be quite investment savvy and have the time to do it yourself then there is the option of DIY investments. This is essentially what it states, you create your own account with an online company, create your own portfolio, make your own investments and manage them and so on.

You also have the option of using software like Betterment. It comes with low fees, an easy to use site and in less than 4 years has increased in investors to around 500 million! You do not have to start out with a large investment sum. Learn with smaller amounts, $100 or a $1000. It will start you off with a questionnaire to learn about you and then if you want to be hands off you can be, just check in now and then.

7. Motif – a great alternative to hiring an expert broker

If you would like to be more involved in the process, need support but want to avoid the large fees and commissions from hiring traditional brokers, there are options like Motif. What is Motif you ask? Basically rather than choosing the stocks to invest in you choose the Motifs you want to invest in. Each Motif consists of different stocks, up to 30 of them linked by a theme. You decide what themes or ideas you want to invest in, choose the Motif or several of them, you are then invested into 30 different stocks in the same idea.

Advantages to using Motif include;

  • Hands on investing
  • Diversification
  • Get to invest in the areas you want
  • Easy to invest
  • Low commission fees – traditionally each stock traded comes at a cost, at Motif you pay $9.95 for the whole bundle

You get to choose from over 180,000 created Motifs. 150 are by investment experts, the rest are by other investors like yourself. Should none of those appeal to you, you can build your own Motif.

8. Take Warren Buffett’s advice

Billionaire Warren Buffett may just know a thing or two about investing! He has offered the following advice assuming there is no debt to pay off,

“Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund.”

To save money on fees if you want to try this out open an account online. Expert Julie Rains breaks it down even further. She would put half your $100,000 in index funds, split $40,000 between a cash account and individual stock options and then the last $10,000 would go on herself either her business, her education or such.

9. CDs or High Yield Savings Accounts

The good thing about CDs or high yield savings accounts is the guaranteed payout you will get. However their name is misleading. It might be high yielding compared to other savings accounts, but the money return is not high. These are for people wanting an investment option that is safe. Safety comes at an actual cost though, you do not get the reward if there is no or low risk.

With $100,000 to invest, if you want to take some of that and put it somewhere safe to make a bit of money this is a good option for short term investing. Something like a capital one 360 savings account is a good example and compared to a traditional bank account also gives better returns.

10. Investing in annuities

If you want at least some of your $100,000 to go into something that has guaranteed returns there are annuities to consider. Sometimes these are not a great investment option and they are probably at the more boring end in terms of risk! But you can be sure that whatever you invest in them will be safe. In times when perhaps the CDs are not paying barely anything out, a short to mid term fixed annuity can offer slightly more.

Another type of annuity are FIAs (fixed index annuities) or sometimes called equity indexed annuities. They are somewhat like fixed annuities but these earn money differently, tracking interest caps and indexes. They are quite complicated so not for investors wanting something simple to understand. However it is a steady stream of income that especially the retired might appreciate. For that reason some will invest in them when they need long term health care or cannot get life insurance.

Breaking down annuities;

The pro’s

  • Safe
  • Guaranteed returns
  • Short to mid term gain
  • Steady stream of a small income is useful in certain situations

The cons

  • Low returns
  • Can be complicated

11. Invest in your own development in terms of education

$100,000 is a large enough amount so that you can choose several investment options. One of them could very well be investing in yourself. Go back to college and earn a degree or go online and do some courses for your own development. Perhaps it could be to improve your standing in the industry of work you are already in, or with your own business in mind. Or it could be for personal satisfaction.

Other educational options include being coached or earning a designation by undergoing a course to become certified for or in something. Learn some new skills and as well as the pride it brings it can also pay off. On average someone with a bachelor’s degree earns more than someone without. Someone with a master’s earns about $400,000 more than that over their lifetime.

Different fields pay out better. So check to see which ones will earn you more, what the tuition costs are and what is available.

12. Extra padding for retirement

For good reason a lot of us spend a lot of time worrying about what is going to happen during retirement. At the start of this article I advised you to have some clear plans already in place for that time before you even start investing elsewhere. Max your 401k, have a Roth IRA in place that you also max. This does not have to be all you do. Long term investments are important and a very good idea.

One such option is a deferred-income annuity. This would mean giving an insurance company a lump sum that they specify. In return you will get monthly payments when you are well into retirement that are guaranteed.

The income from this kind of annuity is more than an immediate type because some people die before receiving the money. For example,

  • Situation 1 – you are 65 and put all the $100,000 in an annuity that starts sending returns when you are 85. You could get about $3,500 a month.
  • Situation 2 – you are 65 and invest it all into an annuity that starts to pay out that year, you would then only get about $600 a month.

You have to weigh up your health and consider your immediate and longer term needs.

Could you use that smaller sum now?

Are you likely to be around still later in life and able to take advantage of that income?

Might you need to be placed in a nursing home?

13. Registered Education Savings Plans or RESPs

Some investors who are parents will choose to put some or all of their money into RESPs or Registered Education Savings Plans. In Canada is you take that into account along with the CESG, Canada Education Savings Grant you can get a $10,000 investment to double in just a decade.

The CESG is where whatever the parents can put into the account for their child’s education after high school, the government will match up to a certain amount. There are no taxes paid on the money until withdrawal and even then, the taxes are kept low at student rates. If you are concerned about your kid’s future and how you are going to pay for college this is a good option.

14. Diversification is key

Really the best advice I can offer you with $100,000 to invest is to diversify. You could easily put say $25,000 into real estate, or your own business, another $25,000 in stocks and so on. The key advantages to diversification are;

  • If there is a loss in one of them, for example the business fails, that is not all your $100,000 investment then gone
  • You can balance riskier investment options with safer ones
  • This means you can benefit from higher earning investments while still having something to fall back on if a riskier investment does not pay out
  • You can also have a mix of short term, mid term and long term investments to ensure you get returns spread out
  • You can mix up your approach which means you can avoid or lower fees paid

15. Life insurance options

For people who have a large amount of wealth or have everything in hand, there is the option of using $100,000 for a life insurance policy that is to be gifted to a charity of your choice. Rather than marking in your will to gift an animal shelter with $100,000 when you die, take out a life insurance policy with that amount and name the shelter as the beneficiary. For just under $100,000 you can get a $300,000 policy.

Benefits to gifting like this are;

  1. Clearly the beneficiary gets more money.
  2. There are no probate delays with a life insurance policy.
  3. These policies are private rather than part of public record.
  4. The estate of the deceased will earn a tax deduction on that donation so ends up giving less to the federal government.


Above are a number of smart ways to invest $100,000 today but what you choose to do can also depend on how old you are.

  • You are in your 20s – Congratulations on starting young, even if you are not able to invest in large sums you are going to see it grow over a long period and get some great returns.
  • You are in your 30s – Certain obligations have likely started at this stage, things like children, having a mortgage, thinking about the kids’ education. You may be tempted to spend on material things but should be balancing your spending with your saving.
  • You are in your 40s and 50s – Retirement really is not that far away. Hopefully you already started preparations in your 20s but you should now be setting goals and making plans for this time.
  • You are in your 60s – Retirement is just around the corner but that does not mean you should stop investing and planning. You might live well into your 90s, or have health issues, or even need to go live in a home. These are costs you need to plan for.

Tips in summary form

  1. Focus on clearing debt first.
  2. Learn about the different options.
  3. Talk to an advisor or several.
  4. Make plans about short term, mid term and long term needs.
  5. Diversify the types of investments you make and when they pay out.
  6. Have an emergency fund.
  7. Decide on what risk you are willing to take.
  8. Avoid fees where possible.
  9. Don’t become obsessed over the investments.
  10. Have your retirement planned for and backed up.

What investor firms are performing above average

If you want a more traditional option, using a financial firm to do your investing for you here is a list of the top performing companies based on a study from J D Power and Associates.

  1. UBS
  2. Charles Schwab
  3. Edward Jones
  4. Ameriprise Financial
  5. Fidelity Investments
  6. Wells Fargo Advisors
  7. Raymond James

For a mutual fund firm consider;

  1. First Eagle
  2. American Funds
  3. Fidelity Investments/Advisor Funds
  4. Franklin Templeton
  5. Rowe Price
  6. BlackRock Funds
  7. Oppenheimer Funds
  8. Vanguard
  9. Dimensional Fund Advisors
  10. MFS Investment Management
  11. First Eagle

You do not need to have regrets. Whatever stage of life you are at, however you earned $100,000 to invest, you can take action today to get a better future. This amount of money opens up options and could make a big impact on your life, in the now and the tomorrow.

Updated on: November 23, 2018