Top 15 Ways to Put $100,000 to Work in 2024

Author

Build Wealth Yourself
July 12, 2024

In partnership with

Dear Wealth Builders,

Having $100,000 to invest is a significant milestone, and with the right strategies, you can put this money to work to achieve your financial goals. In 2024, there are a multitude of investment opportunities available, each with its own level of risk and potential reward. This post will explore the top 15 ways to invest $100,000, providing examples, risk ratings, and pro tips for each option. We'll also consider factors such as age, location, and risk tolerance to help you determine which investments align best with your personal circumstances.

Investment

1. Stock Market Investments

Overview

Investing in the stock market is a classic way to grow your wealth. Stocks represent ownership in a company, and their value can increase based on the company’s performance and broader market trends. You can invest in individual stocks, exchange-traded funds (ETFs), or mutual funds.

Example

Suppose you invest $100,000 in a diversified portfolio of blue-chip stocks. Over the next five years, these stocks appreciate by an average of 8% per year. Your investment would grow to approximately $146,933.

Risk Rating: 5 out of 10

Pro Tips

  • Diversify Your Portfolio: Spread your investments across different sectors to mitigate risk.

  • Regularly Review Your Investments: Stay informed about market trends and company performance to make timely adjustments.

  • Consider Dividend Stocks: Companies that pay dividends provide regular income in addition to potential capital gains.

Best For

  • Age: 25-50

  • Location: Anywhere with access to a brokerage account

  • Risk Tolerance: Moderate to high

2. Real Estate Investment

Overview

Real estate investment involves purchasing property to generate rental income or capital appreciation. This can include residential properties, commercial properties, or real estate investment trusts (REITs).

Example

You buy a rental property for $100,000. After expenses, you earn a net rental income of $8,000 per year. Over time, the property value appreciates by 5% annually, growing your investment value while providing steady income.

Risk Rating: 5 out of 10

Pro Tips

  • Research the Market: Understand the local real estate market to identify high-growth areas.

  • Consider Property Management: If managing tenants isn't for you, hire a property management company.

  • Explore REITs: If direct property ownership is too hands-on, REITs offer a way to invest in real estate without the hassle of management.

Best For

  • Age: 30-60

  • Location: Areas with stable or growing property markets

  • Risk Tolerance: Moderate

3. Index Funds and ETFs

Overview

Index funds and ETFs are investment funds that track the performance of a specific index, such as the S&P 500. They offer diversification and are generally considered lower risk than individual stocks.

Example

Investing $100,000 in an S&P 500 index fund. If the index grows at an average annual rate of 7%, your investment would grow to approximately $140,255 in five years.

Risk Rating: 2.5 out of 10

Pro Tips

  • Low Fees: Choose funds with low expense ratios to maximize your returns.

  • Regular Contributions: Consider dollar-cost averaging by investing a fixed amount regularly.

  • Tax Efficiency: ETFs are generally more tax-efficient than mutual funds.

Best For

  • Age: 25-60

  • Location: Anywhere

  • Risk Tolerance: Low to moderate

4. Bonds and Bond Funds

Overview

Bonds are debt securities issued by governments or corporations to raise capital. They provide regular interest payments and return the principal at maturity. Bond funds pool money from multiple investors to invest in a diversified portfolio of bonds.

Example

Invest $100,000 in a mix of government and corporate bonds with an average annual yield of 3%. Over five years, you would earn approximately $15,927 in interest income.

Risk Rating: 1 out of 10

Pro Tips

  • Ladder Your Bonds: Spread out bond maturities to manage interest rate risk.

  • Credit Quality: Invest in high-quality bonds to reduce default risk.

  • Consider Inflation-Protected Bonds: These bonds adjust for inflation, protecting your purchasing power.

Best For

  • Age: 50+

  • Location: Anywhere

  • Risk Tolerance: Low

5. Peer-to-Peer Lending

Overview

Peer-to-peer (P2P) lending platforms connect borrowers with investors. Investors can earn interest by lending money directly to individuals or small businesses.

Example

Invest $100,000 across a diversified portfolio of P2P loans with an average annual interest rate of 7%. Assuming some defaults, your net annual return might be around 5%, growing your investment to approximately $127,628 in five years.

Risk Rating: 7.5 out of 10

Pro Tips

  • Diversify Loans: Spread your investment across multiple loans to reduce the impact of defaults.

  • Choose Reputable Platforms: Use established P2P lending platforms with good track records.

  • Monitor Loan Performance: Regularly review the performance of your loans and adjust your strategy as needed.

Best For

  • Age: 30-50

  • Location: Regions with access to P2P lending platforms

  • Risk Tolerance: High

6. High-Yield Savings Accounts

Overview

High-yield savings accounts offer higher interest rates than traditional savings accounts, providing a safe place to store your money while earning interest.

Example

Deposit $100,000 in a high-yield savings account with an annual interest rate of 2%. After five years, your savings would grow to approximately $110,408.

Risk Rating: .5 out of 10

Pro Tips

  • Compare Rates: Shop around for the best interest rates and terms.

  • FDIC Insurance: Ensure the account is FDIC-insured for protection up to $250,000.

  • Avoid Fees: Choose accounts with no monthly fees or minimum balance requirements.

Best For

  • Age: Any age

  • Location: Anywhere

  • Risk Tolerance: Low

7. Certificate of Deposit (CD)

Overview

A certificate of deposit (CD) is a time deposit offered by banks with a fixed interest rate and maturity date. CDs are low-risk investments suitable for those looking for predictable returns.

Example

Invest $100,000 in a five-year CD with an annual interest rate of 3%. At maturity, you would have earned approximately $15,927 in interest.

Risk Rating: 1 out of 10

Pro Tips

  • Ladder Your CDs: Invest in multiple CDs with different maturities to manage interest rate risk.

  • Early Withdrawal Penalties: Be aware of penalties for early withdrawals and choose terms that match your financial goals.

  • Shop Around: Compare CD rates from different banks to find the best offers.

Best For

  • Age: Any age

  • Location: Anywhere

  • Risk Tolerance: Low

8. Real Estate Crowdfunding

Overview

Real estate crowdfunding platforms pool money from multiple investors to fund real estate projects. This allows individuals to invest in real estate without the hassle of property management.

Example

Invest $100,000 in a real estate crowdfunding project with an expected annual return of 8%. Over five years, your investment would grow to approximately $146,933.

Risk Rating: 7 out of 10

Pro Tips

  • Research Platforms: Choose reputable crowdfunding platforms with a track record of successful projects.

  • Diversify Investments: Spread your investment across multiple projects to reduce risk.

  • Understand Fees: Be aware of platform fees and how they impact your returns.

Best For

  • Age: 30-60

  • Location: Regions with access to crowdfunding platforms

  • Risk Tolerance: Moderate to high

9. Cryptocurrency

Overview

Cryptocurrency is a digital or virtual currency that uses cryptography for security. Investing in cryptocurrencies like Bitcoin, Ethereum, and others can offer high returns but also comes with significant risk.

Example

Invest $100,000 in a diversified portfolio of cryptocurrencies. If the portfolio appreciates by 15% annually, your investment would grow to approximately $201,135 in five years.

Risk Rating: 9 out of 10

Pro Tips

  • Do Your Research: Understand the technology and market dynamics behind each cryptocurrency.

  • Use Secure Exchanges: Choose reputable exchanges with strong security measures.

  • Diversify: Invest in a mix of established and emerging cryptocurrencies to balance risk and reward.

Best For

  • Age: 25-45

  • Location: Anywhere with access to cryptocurrency exchanges

  • Risk Tolerance: Very high

10. Starting a Business

Overview

Starting your own business can be a highly rewarding way to invest your money. It offers the potential for significant financial returns, personal fulfillment, and the opportunity to create something of lasting value.

Example

You use $100,000 to start an online retail business. After initial setup costs, inventory, and marketing, the business generates $50,000 in profit annually. In five years, your total profit would be approximately $250,000.

Risk Rating: 8 out of 10

Pro Tips

  • Create a Business Plan: Develop a detailed business plan outlining your goals, target market, and financial projections.

  • Start Small: Test your business idea on a small scale before committing significant resources.

  • Seek Mentorship: Find experienced mentors who can provide guidance and support.

Best For

  • Age: 25-50

  • Location: Anywhere

  • Risk Tolerance: High

11. Investing in a Franchise

Overview

Investing in a franchise allows you to operate a business under an established brand with a proven business model. Franchises offer support and training, reducing some of the risks associated with starting a business from scratch.

Example

You invest $100,000 in a franchise. The franchise generates $40,000 in annual profit. Over five years, you would earn approximately $200,000 in profit.

Risk Rating: 8 out of 10

Pro Tips

  • Research Franchise Opportunities: Choose a franchise with a strong brand and proven track record.

  • Understand Fees: Be aware of initial franchise fees, ongoing royalties, and other costs.

  • Leverage Support: Take advantage of the training and support offered by the franchisor.

Best For

  • Age: 30-55

  • Location: Regions with available franchise opportunities

  • Risk Tolerance: Moderate to high

12. Angel Investing

Overview

Angel investing involves providing capital to early-stage startups in exchange for equity ownership. This high-risk, high-reward investment can lead to significant returns if the startup succeeds.

Example

Invest $100,000 in a startup with high growth potential. If the startup's valuation increases tenfold, your investment could be worth $1,000,000.

Risk Rating: 10 out of 10

Pro Tips

  • Diversify: Spread your investment across multiple startups to mitigate risk.

  • Do Your Due Diligence: Thoroughly research the startup's business model, market potential, and management team.

  • Be Patient: Understand that it may take several years for the startup to achieve significant returns.

Best For

  • Age: 35-55

  • Location: Regions with active startup ecosystems

  • Risk Tolerance: Very high

13. Investing in Art and Collectibles

Overview

Investing in art and collectibles can provide aesthetic enjoyment and potential financial returns. These alternative assets can appreciate significantly over time, especially if you invest in pieces by renowned artists or highly sought-after collectibles.

Example

Invest $100,000 in a piece of art by an emerging artist. Over five years, the artist gains recognition, and the value of the artwork increases to $200,000.

Risk Rating: 8.5 out of 10

Pro Tips

  • Educate Yourself: Learn about the art market and what makes certain pieces valuable.

  • Buy What You Love: Ensure you enjoy the art or collectibles you purchase, as returns can be unpredictable.

  • Use Reputable Dealers: Purchase from reputable galleries, auction houses, and dealers to avoid fraud.

Best For

  • Age: 30-60

  • Location: Anywhere

  • Risk Tolerance: High

14. Investing in Precious Metals

Overview

Precious metals like gold, silver, and platinum are tangible assets that can provide a hedge against inflation and economic uncertainty. They are often seen as a safe haven during times of market volatility.

Example

Invest $100,000 in gold. If the price of gold increases by 5% annually, your investment would grow to approximately $127,628 in five years.

Risk Rating: 3 out of 10

Pro Tips

  • Diversify Metals: Invest in a mix of precious metals to spread risk.

  • Understand Storage Costs: Consider the costs and logistics of storing physical metals.

  • Monitor Market Trends: Stay informed about global economic conditions that impact metal prices.

Best For

  • Age: 35-65

  • Location: Anywhere

  • Risk Tolerance: Moderate

15. Investing in Yourself

Overview

Investing in yourself through education, skill development, and personal growth can yield substantial returns. Enhancing your knowledge and abilities can lead to higher earning potential, better career opportunities, and personal fulfillment.

Example

Use $100,000 to pursue an advanced degree, attend professional development courses, or acquire new certifications. This investment can lead to a higher salary and greater career advancement.

Risk Rating: 2.5 out of 10

Pro Tips

  • Choose Relevant Skills: Focus on acquiring skills and knowledge that are in high demand in your industry.

  • Set Clear Goals: Define what you hope to achieve through your investment in education and personal development.

  • Network: Take advantage of opportunities to network with peers and industry leaders.

Best For

  • Age: 25-50

  • Location: Anywhere

  • Risk Tolerance: Low to moderate

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In The End

Investing $100,000 wisely can significantly enhance your financial future. The key is to choose investments that align with your risk tolerance, age, location, and financial goals. Whether you prefer the steady growth of index funds, the tangible value of real estate, or the high-risk, high-reward potential of angel investing, there are numerous opportunities to put your money to work in 2024.

Key Takeaways

  1. Stock Market Investments: High potential returns, suitable for moderate to high risk tolerance.

  2. Real Estate Investment: Tangible asset with rental income and appreciation potential.

  3. Index Funds and ETFs: Diversified, low-cost investment with steady growth.

  4. Bonds and Bond Funds: Low-risk investment with regular interest income.

  5. Peer-to-Peer Lending: High returns with diversified loan portfolio.

  6. High-Yield Savings Accounts: Safe, low-risk investment with FDIC insurance.

  7. Certificate of Deposit (CD): Low-risk, predictable returns with fixed terms.

  8. Real Estate Crowdfunding: Access to real estate investments without direct ownership.

  9. Cryptocurrency: High-risk, high-reward investment in digital currencies.

  10. Starting a Business: High potential returns with personal fulfillment.

  11. Investing in a Franchise: Established business model with support and training.

  12. Angel Investing: High-risk, high-reward investment in early-stage startups.

  13. Investing in Art and Collectibles: Alternative assets with potential appreciation.

  14. Investing in Precious Metals: Safe haven investment with inflation hedge.

  15. Investing in Yourself: Personal growth and skill development for higher earning potential.

By diversifying your investments and following these pro tips, you can maximize your returns and achieve your financial goals. Remember, the best investment strategy fits your unique circumstances and aligns with your long-term objectives.

Warm regards,

Build Wealth Yourself Team

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