How to Invest 100k. Best Investment You Should Consider When You Have $100K

This is a guide on how to invest $100,000 in the stock market. It's not for beginners, and it assumes you have some knowledge of investing already. If that's your first time reading this, I suggest starting with my beginner's investment advice instead.

The Best 100K Investments to Consider


Real Estate

Buying real estate can be an excellent way to build wealth through passive income. Real estate crowdfunding has become a popular method because it allows individual investors like yourself to gain exposure to properties without having to spend hours scouring the internet or spending their own money. This article will discuss different real estate investment options that are affordable enough for most people.

The goal is to stay active while generating reliable cash flow! There are two types of real estate:

Investment Pits: These opportunities allow individuals to purchase established rental property and manage them on behalf of tenants.

Rental Properties: This type of real estate gives owners the right to rent out homes or apartments at all times as long as they follow specific rules. Some examples include AirBnBs, VRBOs, Home Away Rentals, etc...


The best part about these investments is that many do not require any maintenance costs. However, repairs may be involved if something breaks down, but since you're paying someone else to live in the home, those repair bills usually get covered by renters insurance.

How to Invest $100K in Real Estate?

Investing in real estate requires patience and discipline. The first step is finding a property that meets all of your criteria. Once you've found a suitable house, you will then need to determine how much you can afford to spend. This amount needs to cover both mortgage payments and upkeep for the next few years.

Once you've determined this figure, you will need to save enough money to purchase the property. Depending on the type of loan you apply for, you may only qualify for a 10% - 20% down payment. After saving up the required cash, you will be ready to close on the deal.

The final stage involves putting together a team of professionals specializing in helping people get their dream homes. These experts include lawyers, bankers, appraisers, contractors, inspectors, etc. By working closely with them, you will ensure that everything goes smoothly during the process.

Real estate investing isn’t easy, but you will see results quickly once you start building wealth. You just need to follow a simple formula: Find properties that meet your requirements; set aside enough money to buy those houses; hire specialists to help you out; and finally, enjoy the fruits of your labor.

Individual Stocks

If you want more control over which stocks you buy, you should consider buying shares directly from companies rather than using mutual funds. You'll also need to learn how to read financial statements to know whether a company is a profitable or losing money.

Mutual Funds

A mutual fund is similar to a bank account where you deposit money into it. Then, when you decide to withdraw profits, you request a check in return. Mutual funds provide diversification, professional management, tax efficiency, and liquidity. They offer varying degrees of flexibility depending on what kind of fund you choose. For example, index funds track broad benchmarks such as the S&P 500 Index. Active managers try to beat the benchmark by picking specific securities.


You can find good-quality mutual funds online or offline. Online brokers like TD Ameritrade and Scottrade let you trade stocks directly from your computer. Brokers charge commission fees, however, which means you could end up paying more than going direct. Offline brokerages often give better deals.

You might think that you would lose money due to transaction fees charged by brokers, but actually, the opposite happens. When you go straight to the source, you pay less commission and avoid hidden charges.

Stocks & Bonds

When deciding between bonds and stocks, look at the risk-reward ratio. A bond pays interest every year and offers protection against inflation. On the other hand, stocks fluctuate based on the performance of the business. So, if you plan to retire early, bonds make sense. But, if you don't mind taking risks, stocks are great too.

ETFs

An exchange-traded fund tracks an underlying market index. It's designed to mimic the returns of its corresponding index with minimal cost. ETFs have been increasing in popularity recently. Many large brokerage firms now offer free trades on some ETFs. If you use one of these services, you won't incur any trading fees.

IRAs

Investing through IRAs has become much easier thanks to new technology. With most banks offering automatic investment plans, you no longer have to worry about making deposits yourself. Plus, you can take advantage of compound interest without having to calculate anything!

Peer-To-Peer Lending

If you want to lend someone money, peer-to-peer lending platforms such as Prosper Marketplace and Funding Circle allow you to do so quickly. Both sites connect borrowers looking for loans with investors willing to provide capital.

Prosper allows users to borrow anywhere from £1,000 to £50 million. Investors must pass Prosper's rigorous screening process before they're allowed to join. They also receive regular updates regarding the status of each borrower's account.

Funding Circle operates similarly to Prosper, except it focuses solely on small businesses rather than individuals. Borrowers must complete a detailed application form which includes information like annual revenue, profit margins, number of employees, and more.

Prosper charges lenders 1 percent per annum, while Funding Circle takes 2.9 percent. However, if you choose to make multiple investments at once, you'll pay less overall because funding circles are pooled into portfolios.


Both websites require minimum investments ranging between £5,000 and £25,000. For example, if you put £10,000 into Prosper, you could earn around 5 percent annually.

You don't even need to own a credit card or bank account to participate in peer-to-peer financing. All you need is an email address and some spare time.

You should always read reviews and terms & conditions carefully when using any website. Financial watchdogs don’t regulate peer-to-peer lending companies, so nothing stops unscrupulous operators from taking advantage of unsuspecting customers.

In short, peer-to-peering is a great way to generate passive income without having to spend too much effort. But keep in mind that most online peer-to-peer platforms have relatively low interest rates compared to traditional banks.

Robo advisors

A Robo advisor is essentially a computer program designed to manage your portfolio automatically. The best ones use algorithms based on proven investment strategies to determine how much risk you should take and what percentage of your assets you should allocate to different asset classes.

These programs typically offer free trials, allowing you to test drive one before committing to anything long-term. Some Robo advisors also give you access to real human advisers via live chat, phone calls, video conferencing, or other means.

The main benefit of investing through a Robo advisor is convenience. You won’t be able to talk face-to-face with anyone about your finances, but you will get personalized advice directly from your device.

However, Robo advisors tend to focus primarily on index funds and ETFs, limiting their potential returns. In fact, according to Bankrate, only two out of 10 Americans surveyed said they would recommend an automated system over a personal adviser.

Cryptocurrency

Bitcoin has been called "the first successful decentralized digital currency." It was introduced as open-source software in 2009 by pseudonymous developer Satoshi Nakamoto. Bitcoin uses cryptography to regulate transactions instead of relying on central authorities such as governments or clearing houses. This makes bitcoin deflationary — meaning new units enter circulation every ten minutes or so — and volatile.


But this volatility hasn’t stopped people from speculating in cryptocurrency. According to the World Economic Forum, blockchain technology holds enormous promise for improving efficiency across industries, including finance, logistics, healthcare, energy, manufacturing, government services, insurance, and more.

Bottom Line

We have different options on how you can invest 100k. We hope we helped you find something interesting!