Home Invest How to Invest 100k: Easy Ways to Invest 100k With Minimized Risks

How to Invest 100k: Easy Ways to Invest 100k With Minimized Risks

by Team Finance Meaning
How to Invest 100k

Do you have $100k in your bank account? First of all, congratulations on saving money for rainy days. Not all people can earn and save such an amount of $100,000.

Now, you might be worried about how to invest 100k? After all, everyone wants to double their money by investing. Because if you don’t, you and your money will soon part.

No doubt finding the best way to invest 100k isn’t as easy as falling off a log. It would be best if you researched before investing anything because of financial security. The good thing for you is we’re going to tell you about some ways where you can invest your money with minimized risks.

We’re not saying that our ideas are not risky. What we want to say is that we’ve some ideas that have low risk and high returns. So, please stick with us till the end to find out the best ideas.

How to Invest 100k: Overview

Though there are so many great businesses for income, they also have a high risk of losing money. That’s why it is essential to understand that you can’t invest your cash anywhere.

We know that it is nearly impossible to find the one perfect business to invest in with low risk. For that reason, below, we’ll share with you the best way to invest 100k for income. Make sure that you read and research about that specific business carefully before investing any amount.

Consider Investing In the Stock Market

Without a single doubt, the stock market is the best place to invest 100k if you want to invest your savings for the longer term. However, if you’re going to earn profit instantly, then you’re barking up the wrong tree.

You can make your money earn for you by investing in the stock market. It also gives you a high profit in return. Though investing in the stock market is risky, it’s still worth it.

The annual return percentage of investing in the S&P 500 is also good throughout most of the year. Last year in 2020, the S&P 500 was 18.01%.

How to Invest In the Stock Market

First of all, decide the amount you want to invest in the stock market. After that, think about how you want to invest. It’s up to you to invest through an index fund, Robo adviser, individual stock, and so on. Remember to select the method of investing carefully.

Once that is done, open a brokerage account to invest in the stock market. Think about where you want to buy stocks? Always choose the stock of the company with a business you can understand. So, you also need to do proper research before investing in stocks.

Invest In Real Estate

Real estate is the best way to invest 100k for income. You might be wondering why it is good to invest in real estate when you have hundreds of other options?

Well, do you know real estate is an integral part of the economy in almost every country? It is also a secure way as compared to other options.

Though you can’t get profit instantly, yet you can earn good value over your investment in some years. Also, you will get complete control over your investment (property); you can sell, renovate, and manage it the way you like.

How to Invest In Real Estate

Like every other business, real estate also has some types, such as traditional REITs, Crowdfunding, etc. You can choose any kind which is profitable for you.

  • Traditional real estate means buying property then selling it or renting it out.
  • REITs company owns real estate properties, and you’ve to invest in their company stocks.
  • Through Crowdfunding, many investors invest in a real estate project.
  • Make sure to research the type of real estate before investing.

Put Your Money Into a Savings Account Paying Interest

Every investor has a fear of losing their money. The bad thing about every business is, almost all of them are risky. It does not matter whether you are investing in real estate or the stock market; you’ve to understand that there is a chance you’ll lose some or even all of your investing money.

This is where a savings account works as a savior for most investors. You can’t get high-profit with this account like any other business. However, your money will gradually increase, and the best thing about a savings account is there is no risk of losing money.

Purchase a Life Insurance Policy

All of us work hard for ourselves and our families. Everyone wants to provide the best things to their families. So, if you are a person whose partner or children relies on your income, then purchasing a life insurance policy is the most beneficial investment you can make for them.

Select a certain amount of money in 100k and buy a life insurance policy from it for the sake of your family’s financial security. You can buy from banks, brokers, or even credit card companies. Be sure to purchase the right insurance policy through a trustworthy company, site, or bank.

Participate In An Employer-sponsored Retirement Plan: 401(K) or 403(B)

Do you know retirement is not as easy as it seems? The money you’re earning with your business or from your job can’t secure your future. To secure your life after 50 or 55, you need a large amount of money. Here come the employer-sponsored plans such as 401(K) and 403(B).

You might be wondering what are 401(K) and 403(B)?

401(K) and 402(B) are retirement plans in which an employee can invest by spending a specific amount of their salary or income. You can get all amounts and contributions after a particular age (at the age of 50 or even later).

Buy Some Bonds

Investing in bonds is also a superb and safest option in contrast to the stock market. It has a lower risk of losing money. There are four types of bonds: government, corporate, municipal, and agency bonds.

Whenever the government of companies needs money for their projects, they issue bonds. The purchaser invests their money and receives a bond (with the terms and conditions). Plus, investors also get interested in the investment they make by purchasing bonds.

Invest In Cryptocurrency

Cryptocurrency is a profitable industry of 2021 and the future. There is no doubt that investing in cryptocurrency is exceptionally beneficial for anyone, especially if you know how it works.

However, it is a bit difficult to understand cryptocurrency. But it should not be something that you cannot learn. You must understand how investment in cryptocurrency works and what the results will be. There is a need to look at every parameter before investing in crypto. 

Remember that there are many types of cryptocurrency like Bitcoin, Litecoin, Ethereum, Ripple, etc. Cryptocurrency is also considered the gold of the digital world. You can buy it and then sell it whenever you want with a profit. 

Invest In Gold

Investing your money in gold is the traditional and best way to invest 100k or a specific portion of 100k. It is the safest place for investors where anyone can invest their money for the longer term.

Bond NameIssued By
Government BondGovernment of a specific country 
Corporate BondCompanies 
Municipal BondMunicipal or State
Agency BondGovernment-sponsored agency

Buying gold is not only a way to invest; you can purchase gold funds or gold mining stocks. You can go for the second and third options, but it’s better to know how gold mining stocks or gold funds work. Otherwise, purchasing gold coins and bars is an excellent choice.

Help Others

The best thing about having money is you can help others whenever they need it. And also make money from it. Though you’ve to take care of everything, it is still an excellent way to invest your money through P2P (peer-to-peer) lending.

With this method, you can generate profit on your money plus monthly income, which you’ll receive whenever people pay off their loan monthly.

How to Invest In P2P Lending

No doubt it is risky to give someone money, especially when you’re new to the P2P business. That’s why we’ve come up with some apps that are amazing for P2P lending. Like Upstart, Prosper, Payoff, Funding Circle, and Peer form.

Make sure to read the terms and conditions of all apps before the registration process. It’ll save you from any issues in the future about your funds.

Consider Starting a Business

Are you good at something, or do you know a specific business like how it works? How can you start it? How can you succeed in that particular business? If so, well and good. If not. Always go for a business you know about, and you can handle it in the best way.

You can start any business; it does not matter whether you’re starting your journey from a small company or a big one. The only important thing is you’re investing in your business for yourself. Keep in mind not to invest all of 100k in business; start with a specific amount.

Hire Financial Management Advisor

We know that choosing one option between hundreds is not an easy task. Most importantly, in a situation when you know that there is a chance that you can lose your money (100k) with just one wrong decision.

So, what will you do in your life if you have no money? This question haunts many investors. And this is the point where you need financial advice from an expert.

People hire financial management advisors and ask for financial advice regarding retirement or insurance plans, business plans, and everything related to you financially. You can easily find a financial advisor through Google or social media platforms.

I want to add that you can hire a financial advisor and provide services to other people. You pay the advisor from the amount you already have, and the advisor will fill up your account back with an extra amount. You can also hire multiple advisors for many clients.

Diversify Your Investments

You can start a business, invest in the stock market, bond, cryptocurrency, or gold. You can do anything with $100,000. The real problem is, can you invest your money in the right place? And if you can do it, then how?

People often invest more than half of their savings in one or two businesses, which is a big-no-no for investing. What happens if that one particular business does not go well? That’s why it is good to diversify 100k in different industries for financial security.

What you’ve to do is choose some ideas from this article. Later research and think about how you can diversify (invest) 100k in those ideas?

Frequently Asked Questions (FAQs)

How much interest does 100k earn?

The interest percentage depends on the return rate (ROR) or interest rate. If the interest rate or rate of return is 5% per year, you’ll receive $5000 (100,000 × 0.05 = 5000). So to check the interest on a particular amount, multiply it like this (Amount × Rate of return ROR).

What is the best thing to do with 100k?

No one knows you, your abilities, your interest, the experience of work. The only person who can understand which is best is only you. Though we can share ideas like investing in cryptocurrency or the stock market are good options.

The problem begins when you know nothing about the system of how cryptocurrency and the stock market works. For that reason, it’s useless to invest in any industry without knowledge. So check the ideas and ask yourself which is the best thing to invest 100k.

What should I do with my first 100k?

These are the things you can do with 100k to earn more money.

  • Invest in real estate.
  • Buy Gold
  • Start P2P (Peer to Peer lending) service.
  • Purchase a life insurance policy.
  • Start a business
  • Buy bonds
  • Invest in cryptocurrency
  • Open a saving account
  • Go for a retirement plan

Final Remarks: How to Invest 100k

We’ve discussed many ideas which are great options to invest your 100k. However, if you still have a question ringing the bell in your mind, “how to invest 100k,” it’s time for you to think about what is best for you.

Before investing in any of the ideas mentioned above, make sure you have enough knowledge about them. You also have to plan based on your knowledge and study some related success stories. Without any plan, you will end up with your account empty.

Once you analyze a business, ask yourself, and then think whether this approach, industry, or business is worth your money or not?

If you still can’t make the decision, let us know in the comment, and we’ll let you know about the best place to invest 100k in.

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