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How To Invest 100k: 6 Simple Tips

invest 100k

If you are looking for the best tips on how to invest 100k, you have reached a great milestone in your life. Investing a good sum of money shows that you want a good return on investment. Therefore, if you invest 100k wisely, you will easily make $1 million within a short time.

However, you may be wondering which is the best way to invest your money. Possibly, you have asked your friends for advice, and they have told you that investing 100k is risky. Alternatively, you have more than one idea, and you are yet to decide which is the best.

Worry no more because this article will give you expert tips to help you invest. Additionally, the article will help you choose the right spot to invest in because not all investments are good for you. Here are the 6 best tips on how to invest 100k.

1. Invest 100k in individual stocks

Investing in stocks means you buy shares of ownership in the selected company. This type of investment has a good return if you choose the right company. Those who invest in stocks are optimistic that the company will grow and they will make profits.

Stocks can be risky for people with little or no knowledge about stock markets. Therefore, if you are a beginner, you should first learn how to invest in stocks before committing your 100k to it. You can also seek the help of a financial advisor before you invest. My Finance Master will guide you on investing in the stock markets.

The stock market has existed for centuries, and many people have made a fortune out of it. You can as well make a fortune if you invest wisely. Therefore, if you have 100k, you can invest in the stock market and reap huge profits. You will earn money depending on the company you invest in because they all perform differently.

Before investing in a company, you should check its financial status and overall performance in the last 12 months. You can also compare a company’s performance against its competitors before investing in it.

Long-term investments in stocks could generate up to 12% returns per annum. The returns are quite strong, especially for well-established companies. Unlike physical assets, stock investors can liquidate their holdings in the company any day they want. Therefore, you can get your money back in a matter of hours.

2. Invest 100k in real estate

Real estate is one of the safest sectors that you can invest in. This is a long-term investment that will not give you worries about day-to-day expenses or tasks. Once you set up your real estate business, you will earn income without investing more money. Therefore, it is a steady investment for people who prefer a long-term investment.

However, some might wonder if 100k is enough to invest in real estate. The answer is yes. You can invest just 100k in real estate and earn a decent return. You can choose passive or active investments in real estate. Alternatively, you can go for residential or commercial properties.

You can buy single-family residential homes or commercial properties like warehouses, retail spaces, or offices that fit your budget. Then, you can rent or lease them and make a profit. You can also buy shares of companies that invest in real estate.

It may be hard to get a new home worth 100k, especially if you live in a city. Therefore, you should target second-hand homes or properties. They are usually cheaper than new homes, depending on their location and quality.

Alternatively, you can use that 100k to pay a down payment for the property you want to buy. Then make monthly payments till you fully own the property. After that, you can use the property for commercial purposes such as leasing or renting.

invest 100k in real estate

House flipping is also a lucrative investment that you can consider. House flipping entails buying a single-family house that needs repairs. Then, you use the 100k to repair and sell the house instead of keeping it to collect rent. You only need to find a seller willing to sell the house cheaply.

The opportunities for investment in real estate are endless. You only need to have the right information and a financial advisor if you want to succeed. Remember that you can start your real estate investment journey with just 100k and succeed.

3. Invest 100k in peer-to-peer lending

Peer-to-peer lending is gaining popularity in developed and developing economies. This is a form of credit lending investment where individuals get loans directly from other individuals, thus eliminating the lending firms and financial institutions as the middlemen.

You can lend your 100k to peers and earn a decent profit. You will only be required to sign up on peer-to-peer lending websites to connect with borrowers. Then, you will deposit the money you are willing to lend to the borrowers.

You will set the conditions and the interest rates, or you can use those provided on the website. The loan applicant will review your terms and accept them if they are favorable. Then, the money will be channeled to the loan applicant. The borrower will pay back the money with interest after the maturity of the loan.

The good thing about peer-to-peer lending is that there are no entry barriers. They also guarantee a steady return rate of 8-16%. This might sound low to some people considering you can get 100% returns on other investments. However, this is a stable investment with a low risk of loss. Therefore, this is a good investment option for someone with 100k and willing to invest in a credit lending business.

4. Invest in IRAs

Individual retirement accounts are savings accounts that are specifically designed for retirement. The money you put in IRAs will earn interest. The good thing about IRAs is that you can manage your account instead of letting your employer manage it. Additionally, traditional IRAs offer tax-free or tax-deferred options for investors, meaning that your money and the interest will not be taxed until withdrawal.

If you invest 100k in a traditional IRA today, you will have that money plus interest in a few years. Additionally, you will not be taxed unless you decide to withdraw the money. However, you should know that there are two types of IRAs: traditional and Roth IRA. If you invest in Roth IRA, you will be taxed today but not when you retire.

5. Invest in mutual funds and ETFs

Mutual funds are financial vehicles that pool assets from shareholders and then invest in stocks, money market instruments, bonds, and other securities. Investors with common investment objectives can pool their assets into mutual funds and invest in profitable security. Then, they will share the profits resulting from the dividends.

Similarly, you can invest in exchange-traded funds (ETFs). ETFs are a pool of securities that are bought and sold through a brokerage firm in the stock exchange market. You can buy dividend-paying equity or any other security in any brokerage that offers ETF trade. Then, you will earn dividends from the traded security.

When you invest in mutual funds or ETFs, your assets will be put in a portfolio that has already been selected for you. Experts contend that mutual funds are better for risk-averse investors who still want to invest in stocks. However, you can also invest in both funds if you have enough money for investment.

If you take your 100k and invest in either ETFs or mutual funds, you will earn income from dividends on stocks, capital gain from securities whose prices have increased, or profits from the sale of the mutual fund shares when they increase in price. The good thing is that you can reinvest the dividends you earn from ETFs or mutual funds.

The advantage of ETFs and mutual funds is that they are relatively passive, meaning you will not be actively involved in the trade. You will not do a lot because the stocks are already selected for you by experts. Additionally, you will be trading in professionally-managed and diversified portfolios without being actively involved.

6. Invest in cryptocurrency

invest 100k in cryptocurrrency

Cryptocurrency is a relatively new investment sector which makes it prone to misinformation and condemnation from some quarters. Currently, there are debates everywhere about the legitimacy of cryptocurrencies because it has been previously associated with mega scams that have hit the headlines.

However, you should know that you can invest your 100k in cryptocurrencies and make huge profits. You only need to know where to invest to avoid being scammed. While crypto has higher risks because bitcoin prices fluctuate, it can multiply your investment by 100 times or more if the price rises. Those who joined the cryptocurrency trade in its initial stages made millions of dollars in profits.

Financial experts advise investors to always do their due diligence before investing. Look for credible cryptocurrency exchanges or brokers to avoid falling into the hands of scammers and fraudsters. Then, you can invest your money and expect a good return.

The bottom line

Now you know how to invest 100k to make $1 million quickly, you should begin your investment journey right away. The above investment tips will help you make millions if you invest wisely. However, you should not invest all your money in a risky portfolio that you do not understand. The best thing to do is to seek expert advice before you invest.

A professional financial advisor will help you plan your investments and advise you on the most profitable and risky investments. Additionally, the advisor will help you analyze the market to identify the trends that will give you a signal to the best investment opportunity. Be a wise investor, and you will easily turn your 100k into $1 million in a short time.