Money-making must be the single most fulfilling yet intensive responsibility the world has today. The goal for many people is financial stability and expanding earning potentials whenever they can.
It’s a basic economic fact that investment is an excellent way to increase finances. It could boost your account exponentially, especially when you take the right strategies.
If you’ve got about $100,000 with the intent to invest, there are so many options available to you. To start, 100k is a significant amount of money, which could reflect a solid financial foundation you have for yourself. You could make much more from $100,000 with a proper investment portfolio.
However, the crucial investment question is, “In what do you invest?” Understanding the various investment types allows you to weigh your chances for the most profitable outcome. This piece will show you how to pick the best way to invest 100k in 2022.
Choose Real Estate
Real estate is one of the first choices on any credible post about the best way to invest 100k. It’s our recommendation as well, as we think it does maximize your money earning potential.
Most great investments allow you to earn passively, but real estate investment takes it further. It lets you put your money in assets that give steady and predictable returns instead of arbitrary accounts like retirement funds and stocks. You can even join a real estate syndication group like Peoples Capital Group and grow your 100k passively.
Another reason real estate is the best investment for 100k is its equity benefits. You would build up enormous equity by using your capital as leverage. For instance, you could plop your 100k down payment on a mortgage to buy a million-dollar house. Throughout the mortgage tenure, you’ll enjoy owning a million-dollar asset as you pay off the interest.
Also, you could get monthly or yearly rent as an asset owner with tenants. Monthly income from 100k investment sounds gratifying for most people, making real estate a compelling choice.
Try Mutual Funds and ETFs
If you prefer stock investments and their derivatives, ETFs and mutual funds would be a suitable investment option for your $100k. Mutual Funds and ETFs (Exchange Traded Funds) let you trade in an asset portfolio already curated for you. Exchange-Traded Funds follow certain market indexes, while professional analysts handle mutual fund selections.
This investment type is the best way to invest 100k if you prefer a less risky approach to stock trading. Since you have other entities pick out the possible asset types for you, you’d be risking your money a lot less than trading individual stocks yourself.
Another benefit is the investment experience you get to leverage. Most times, ETF and mutual fund firms have certifications, with professionals who collectively have years of experience. Trusting them with your 100k investment money has more chance to yield profits than most other ways.
Invest in P2P Lending
P2P (Peer-to-Peer) lending has become a more popular investment option over the last few years, and it’s worth considering if you’re looking for the best investment for $100 000.
It involves making money available to businesses or individuals to borrow funds for their investments. Online P2P services exist to link lenders to borrowers.
Essentially, P2P lending allows you to take up a financial institution role by lending money to investors. Here’s a scenario: A private lender could lend their money to a real estate investor at an interest. That allows the investor to complete his deal while the lender profits from the margin.
It’s a more passive investment option, one that doesn’t require you to buy assets yourself. If you’re worried about the risk in P2P lending, you’d be glad to hear that it’s justifiable, as you’d get control over the collateral property if something happens to your money.
Give IRAs a Go
Do you prefer a more laid-back investment option for your 100k? You could invest in your retirement by trying IRAs. These are Individual Retirement Accounts that allow you to enjoy interest on your money when you retire.
Generally, IRAs are saving accounts and are often part of a company’s retirement packages for their staff. Some of the more common IRA types we have are 401k and 403b. An IRA is one best way to invest 100k for income and bolster your retirement savings.
However, it’s worth mentioning that individual retirement accounts also have classifications based on the tax benefits you could get. We have traditional IRAs that give tax returns on retirement savings, and you’d pay the income tax when you eventually retire.
On the other hand, you could settle for the Roth IRAs. These accounts charge the income tax on your savings, allowing you to stay tax-free when you retire.
Overall, opening an IRA is the best way to invest 100k safely, as you won’t have to worry about having a loss due to asset trading or lending.
Buy Actual Stocks
If you prefer to take informed risks on your 100k actively, there’s hardly a better way than trading stocks and indexes. These investment types are for investors who wish to control their chances at every point.
The greater appeal to stock investments is that they let you diversify your portfolio and invest in various assets from different global markets. What’s more, the return potentials are attractive, averaging about 12 percent YoY. Expectedly, it’s best not to expect a constant positive return, but you can improve your chances by reinvesting your earnings and having longer-term strategies.
Stocks and indexes are also an excellent way to stay liquid as you invest. They provide access to your capital much faster than other investment types. When you pair that with how convenient starting stock trading is with a bit of money, putting your $100k in stocks would make more sense to you.
Investment is an effective way to improve financial standings for individuals and businesses. You can find several investment opportunities nowadays, but which one yields the most return?
It’s a crucial consideration, especially when you have about $100k in disposable income. Our handy list above should set you right on the best way to invest 100k for short and long-term returns.
Alternatively, you could consider other actions like paying off existing debt or setting up an emergency fund. These options let you evaluate and improve your financial health so you can be focused on growing your investment fund.