14 Ways to Invest $100,000 with Confidence

Joseph Meyer
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Best Ways to Invest $100,000 in 2021

So now that you have made it, what will you do with your accumulated wealth? Will you leave it to your children, give it to the poor, or invest it? And once you get over the stereotype or failure you have had with the idea of splurging the money, it’s time to get sensible about it. Here are our top ways to invest this income wisely.

There is a lot more money out there in different investment options. Some of them are unique to your situation (you are rich, single, retired, high-income professional), but if you’re an open-minded investor, there are plenty of things you can do with your money.

These are the most common places where people invest money. These are also my picks. I decided to take a personal approach from my point of view.

Table of Contents

{1}. Start a business
{2}. Save for retirement
{3}. Start a 529 college savings plan
{4}. Invest in a house at a young age
{5}. Establish an emergency fund
{6}. Create an investment account
{7}. Invest in real estate
{8}. Help out with family expenses
{9}. Pay off high interest debt
{10}. Make smart investments
{11}. Take care of a pet
{12}. Improve your home
{13}. Go to college for free

DIY Investing

Vs. Advantages and Disadvantages

Purchasing individual stocks is fraught with danger and can be costly if you don’t know what you are doing. Additionally, you may be overpaying for services and paying more in fees than you need to. You don’t need a financial advisor to be a successful investor. There are plenty of resources available online where you can research and purchase stocks.

Here are some of the main advantages and disadvantages of DIY investing online.

Pros of DIY Investing

There are numerous websites where you can purchase stocks, usually for a nominal fee. The biggest advantage to buying stocks online is the low cost. There are no transaction fees and you can typically buy fractional shares which results in lower costs. You can also make trades throughout the day, so your orders will be fully executed. That is not the case with brick and mortar brokerages where you may get filled at the end of the day at the closing price.

If you are seeking stockbroker advice, you enjoy your own privacy and do not need to divulge your portfolio or any of your personal details to a third party. Talk to a financial planner if you want advice on how to invest but it’s completely up to you when and how much you choose to invest.

Peer-to-Peer Lending

Peer-to-peer lending is a relatively new concept, but it has gained a ton of traction lately … and a ton of cash. The concept is simple. Find people who are looking to borrow money to make special purchases (usually a mortgage, business expansion, car, etc.). Lenders who are willing to make these borrowers loans can invest in their personal loan and earn money off the interest.

The process works very well because both sides know what they’re getting into. The borrowers have to submit to a credit check and give personal financial details to the lender. It’s also a field where minorities and low-income earners have historically been turned away because of their credit scores, so it’s a way to provide a chance to the disenfranchized.

Betterment

M1 Finance – Invest with an Expert (but not at expert prices)

M1 Finance is an automated investing service that helps you invest with a team of advisors, by giving you access to thousands of ETFs. Best of all, it’s free. M1 Finance is more like an “If you can’t beat them, join them” strategy for building wealth. If you can’t afford a human financial advisor, you can at least consult a team of them for free. And while it’s not a full-blown professional financial firm with teams of accountants and lawyers, it’s a useful tool to teach you how to do it yourself.

Buy Like Buffett

I’m always intrigued with Richard Band’s approach on investing. He’s got a formula, and he’s kinda stick to it. Even if the market around him seems abnormal and crazy, and he’s calling it a “bubble,” he sticks to his investment strategy because his formula works.

I believe many of us can be successful investors if we adopt an approach of making rational investment decisions by examining the facts. This will insulate you from making bad decisions often influenced by emotion and other factors. By learning from the masters, we can create our own investment principles to ensure a good financial future for our families.

In the following post, I want to share 14 of my favorite investment principles that investors can use to help grow their wealth over time. These are principles that some of the world’s greatest investors will likely adopt, expand, and use to be a successful investor. I’ve adopted and used the following principles to my own investing activities and that of my family.

The Boring Stuff

High-Yield Savings Accounts

To make things a little easier, we put together 14 investment options that fit into the category we’re calling high-yield savings accounts, which should get you a return between 1% and 3% per year.

The interest you earn from Series I, II, or EE Savings Bonds is determined by the Treasury and varies 6-8% annually.

Similarly, a credit union may offer up to 1% interest as a sign-on bonus. Checking and savings accounts aren’t exactly where you’d expect to find a lot of yield.

But if you’re lucky enough to open an interest-bearing checking and savings account with a credit union, you may be rewarded with a higher rate of interest than you’d find with a traditional bank.

Since credit unions are not-for-profit organizations owned by their members, you’d expect them to offer higher interest rates to lure members over large financial institutions. If you’re a member of a credit union, look into these savings accounts to see if they can’t get you a better deal.

CDs

A certificate of deposit is a low-yielding but very safe instrument for savings and money market accounts. It is widely used by individual investors because they can be highly flexible and usually are FDIC insured.

If interest rates increase, the CD will gradually become worth less than the principal. You’ll also not be able to access the money prior to maturity.

Money Market Accounts

The money market account is the popular, workhorse banking service. This account provides safety from theft. The account holder can’t accidentally withdraw all the money. And, there are laws in place to help the customer get back his or her funds.

A key benefit of this banking service is the high interest rate. Check with your bank to see how much interest they offer on a money market account. As an example, when I last looked, US Bank was paying .50% on our money market account.

Investing With a Guarantee – No Worries

Investing with confidence can be a bit of a challenge. Keeping things simple with solid steady returns is an easy way to limit your risk. Here’s a rundown of 14 different options guaranteed to return your money, withdraw your money at any time, and offer some steady returns.

Annuities

Annuities are a type of investment that guarantee a lifetime income stream based on a stream of single premium payments. If you are the kind of investor who is nervous about making his money last, annuities are a smart investment tool for you.

A typical annuity features a death benefit, which means that your beneficiary may receive a lump sum payment when you pass away. Depending on what you need, annuities are offered for a wide variety of lifetimes, including single year, 5 years, 10 years and multi-generational annuities. Depending on your age, the longer the lifetime, the higher the cost.

Cash-Value Life Insurance

10. Super-Size Your Charitable Gifts

Choose one of the best charities (American Humane Association, The Humane Society of the United States, etc.) and give them a six-figure donation. They’ll thank you for it, and never have to chase you down later for more money.

Stock Market Alternatives

There are some really good reasons why investing in stocks is the most popular way for most people to invest for retirement.

With around 10,000 publicly-listed companies in the U.S. alone, there’s no shortage of opportunities to find markets you can profit from.

Furthermore, even the smallest investments can make a difference in your life because the more money you make, the more tax you pay on your investment earnings.

Real Estate

Your Education

Seeking Help

Because your money is important to you, you should have a financial advisor. A financial advisor can help you weigh the options for your investment portfolio, improve your investment performance, and help with your estate planning and tax planning, when necessary.

A good financial advisor will:

Help you buy a product or service you wouldn’t have purchased without their advice.

Make your decision easier.

Remain neutral and help you make your own decision.

Financial advisors are not all created equally. Although there are plenty of competent financial advisors out there, some may not be as trustworthy as others. For example, some may have hidden or unreasonable fees or commissions. Some may charge you for services that should be covered under their fiduciary oath. Some may have little or no financial experience. Some may even be seeking to take advantage of you. Others may give you advice that is tilted in their favor without your full understanding. Some may recommend high-priced, overly risky products to earn themselves extra fees.

With a financial advisor, make sure to watch out for the following red flags:

  • Hidden or excessive fees
  • Unreasonable fees or commissions
  • No-touch or guaranteed products
  • Unnecessary or high-risk products
  • Lack of fiduciary duty to act in your best interests

Investment Advisors

You truly don’t know what you don’t know. Check out a couple of investors from ChooseFI podcast and listen to their stories. To me, it’s a fascinating episode to hear how other people look at investing. These are two of the best investors with a great track record. You can be sure, they know what they are doing, but as they admit, they don’t know everything. You don’t either. That’s why you might want to consider an investment advisor to guide you.

Why Do You Need an Investment Advisor?

Marc Lichtenfeld, an investment advisor, reminds us why you need an investment advisor.

If you do it on your own, you have more control. But then again, control can be a double-edged sword. You can fully control your assets by yourself or fully control your life. You can’t do both. Life is not a spreadsheet.

With an investment advisor, you bring him in at the beginning in the beginning and say, “I want you to be like an architect. I want you to come in and help me design my life, and then I’ll execute it on my own.”

AssetLock™

At first glance, AssetLock™ seems like your typical Certificate of Deposit. However, AssetLock™ actually works to your advantage by providing a higher interest rate than a standard CD, as well as financial flexibility that many standard CDs do not offer. As your aggregate balances increase to meet the minimum balance, yields increase to meet your growing savings needs!

The only catch is that your savings will be locked in the account for the length, or term of the CD, which initially is set to a period of three years. While this is a deal breaker for many, it can be the difference in solidifying your financial future and creating the financial habits that you are working to form. This is because through this approach, you are building a steady foundation of financial products, instead of picking one at random.

A one-time, lump sum investment will often lead to a great rate of return, but can also result in poor financial habits. With AssetLock™, you are putting an end to the guessing and jumping between different financial products. This turns what could turn into a money tree for you in the future, into a guarantee.

About the Author

Ryan Fee owns, operates, writes, receives royalty checks from, and has the obligatory tiny office in a big office building in Vancouver, BC. He has had hundreds of articles on the Internet since 1998 but is probably best known as the creator and writer of the world’s most popular financial advice column “Money Smarts” which has been syndicated in Canada’s biggest newspapers for 11 years and has been shown on television. He has written 3 books, including the national bestseller Money Sense, plus one of Canada’s best-selling business novels. His book How to Manage Your Money When You Don’t Have Any was short-listed for the NDP-sponsored Stephen Leacock Medal for Humour. He is also the author of the online personal finance community, YourFinancialFuture.ca. He is an active angel investor and is pleased to predict that even making silly investments will continue to increase in popularity, even though it is a terrible idea.

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