How to invest 100K – 3 ways to make your money do the work

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If you’re wondering how to invest 100K, then you’ve officially entered “real investor” status. Welcome. And as a congrats, let me teach you how to invest your hundred thousand dollars to get the best returns. 

We are well on our way to becoming a millionaire but sorry to burst your bubble. You’re nowhere close to millionaire status yet. But if you invest your money properly, you’ll get to that million-dollar mark in just five years!

However! $100,000 is a really fun investing territory to be in because you get to start investing like you see people do on TV. No more learning, no more leveraging your job. Just put your money somewhere and have it grow all by itself.

What’s special about learning how to invest 100K?

$100,000 is a special inflection point in a person’s saving life. 

You don’t yet have so much money that you can sit back for the rest of your life, but finally you get to transition to pure “wealth accumulation” instead of the “brain accumulation” part of your growth.

When we were working with smaller amounts (under $100K) your money was used to upgrade something you already had. Your basement, your brain, whatever. Thereby leveraging what you already have for hyper-efficient investing.

With $100,000 there is a large enough pool that you can’t be terribly efficient (like using money to get a raise). That sounds horrible. Until you see the other side of the coin. You are no longer part of the equation.

Your investment pool is large enough that your money can actually start to work for you all by itself.

That means no work for you! YAY! Easy!


So today we’ll learn the top 3 methods of how to invest 100K: 

1 – Buy lots of stocks! (9%)

“Is he crazy? Has he seen the economy?”

No I’m not and yes I have

Your $100K is finally where you can start investing your money in bulk. You aren’t “super-rich” yet, so you shouldn’t be too aggressive with your money by trying to take over companies, but this is enough that you would cry if it all disappeared. So I’ll tell you the easiest and safest way to invest it. 


Invest your money in index ETFs (like VOO).

Doing this will let you:

  • Diversify your investments (to be safe). The US economy isn’t going to go bankrupt, while some individual companies might.
  • Be very time efficient. This is the biggest selling point for me. For me, it takes like 1 minute once a month.
  • They provide amazing returns. Anyone who tells you otherwise is probably trying to sell you something.
  • Make rough market timing very easy (e.g. go to 100% stocks mid-recession, 70/30 the rest of the time).  

Historical averages of a 70/30 split is a 9% return, so if you go all in, you should see $9000 every year on your 100K.

Not bad for doing nothing. 

Specifically I buy almost exclusively VOO for stocks and BND for bond. If that makes no sense to you. Read: Simple investing for beginners 🙂

But wait there’s more! ETFs are a good way to go whether you have a little or a lot of money. So even though it’s still a while before you make it to the $1M mark, your investing methods won’t really change. 

2 – Emergency Funds (0% return…until you need it, then infinity%)

So maybe this isn’t the most exciting section of how to invest 100K, but I’m making you read it anyway. 

At this point in your life, there’s a chance you have kids, cars, and a few mortgages. Running out of money would be a big issue. Protecting yourself from going bankrupt is now very important plus you have a lot of money so if you go bankrupt you would lose it. *sad face*

If something bad happens, like a recession, a pandemic, losing your job unexpectedly, or health issues, you’ll be glad you thought ahead. 


My personal rule is to have an 18-month runway if you are retired and 6 months if you work full-time. It’s long, but if there’s a recession I don’t want to worry about it when I’m not working.

That sounds like a long time but it’s actually really simple and easy.

Here’s how simple it is

  • My emergency fund runway is my bond allocation from the stock section above. 
  • I spend about $40K/yr, so I make sure I always have at least $60K in bonds. I’ll have that naturally if I have over $200,000 in my 70/30 split from above. EASY!
  • 18-months is a long time but I’m actively retired. I don’t have a real job anymore so I need to be more stable than your average person. Six months is fine while you have a job. Just let your bond runway naturally build up as you close in on retirement.

3 – Downpayment on a pricy rental home (20%+)

I bought a $410,000 rental home years ago with $61,000 downpayment and have been netting $16K back every year. That’s 26% return! It’s hard to beat!

Even better, it’s worth about $40K extra every year! I won’t even quote this as a 91%/yr return because that number is just silly. It’s normal for a fancy rental though.

Therefore, pricy rentals super charge your wealth!

If you’re wondering how to invest 100K. The most lucrative method by far is leveraging it in appreciating real estate. You can nicely utilize $100K for a nice downpayment on an expensive house in an expensive neighborhood. Then if you buy a house in a growing city, you can make a huge pile of money in appreciation. 

Are there downsides and dangers? Oh hell yeah. But they are manageable (learn all of my real estate portfolio‘s lessons).


I’m of the belief that everyone should own at least one rental home. And that’s because the power of mortgages makes your wealth growth explode! 

The downside of real estate investing is that it moves slowly, and so do the lessons. So start with one rental and hold it for a few years to gain an opinion for later once you really have some money to move around.

What didn’t make the cut?

Owning your own home or paying a mortgage

(My parents would be so ashamed.)

Owning your home or paying your mortgage off is more of a lifestyle choice than an investment. In many areas, it could even be a losing deal (if you compare it to the options above.) 

If you think it’d be weird to own a home and rent it out meanwhile renting a small apartment yourself, get over it. That’s how I started and I just wish I’de waited longer. 

Bonus! Learn how to invest 100K but don’t forget the best stuff!

Here are a few cheaper things you should pursue if you haven’t already. (links for more details coming over the next few weeks) 

  • Invest in yourself
  • Rent out your basement
  • Pay high-interest debt
  • Refinance your house
  • Tax-sheltered investments

TL;DR – How to invest 100K

  • You are at a new level of wealth – your money can start to work for you
  • Invest in stocks. I recommend index ETFs
  • Have an emergency fund (in bonds) – now it’s more important than ever
  • Invest in a nice rental property – it’s can be way more lucrative than even owning your home
  • And check back on this infographic if you forget! 

And just like that, you’re a legit investor. From now on your money can go off and work by itself. 

Keep following this path, and you’ll be at millionaire status before you know it. 

And then… I’ll see you on the FIRE escape!

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