How to Invest One Hundred Thousand Dollars – So, you have got 100,000 dollars in cash lying around, and you want to learn the best way to invest it to earn the maximum profit? You should consider yourself one of the lucky ones. If you plan on investing 100,000 dollars, you’re in luck because there are several options available to you. We will share some of the best ways on how to invest one hundred thousand dollars and what options you should choose.
Table of Contents
- 1 1. Create An Emergency Fund and Pay Off Debt
- 2 2. Your Top Priority Should Be Investing for Retirement
- 3 3. Choose Between Active Stock Investing vs. Passive Stock Investing
1. Create An Emergency Fund and Pay Off Debt
You probably want to invest your money straight away, but you should look at the long-term picture instead of short-term gains when it comes to investment. The most important thing to do before you invest any sum of money is to ensure your finances are sorted. This step will ensure you don’t regret it later.
· Pay Off Your Debt
If you have accumulated a lot of debt, such as high-interest credit card debt, you should use your 100,000 dollars to pay off that debt. There are several reasons for paying off your debt before you start investing. Debt accumulates interest, and the longer you wait to pay off your debt, the more money you will owe. If you have high-interest debt, the money you owe will only continue to grow, and you won’t be able to get out of that debt.
· Create An Emergency Fund
We advise you to save at least three to six months of living expenses in case of an emergency, such as loss of income or an expensive hospital bill. It’s better to have money saved up so that you don’t have to take out loans or use your credit card to pay off big bills.
2. Your Top Priority Should Be Investing for Retirement
When you decide how to invest one hundred thousand dollars, it can be tempting to invest it in something that offers you short-term returns. However, your goal should be a long-term investment and looking towards investing for your retirement. You can help grow your retirement fund by putting away 100,000 dollars towards it. Several tax-deductible retirement accounts can be set up, which will ensure you get the maximum out of your investment fund.
3. Choose Between Active Stock Investing vs. Passive Stock Investing
Whether you choose Passive Stock Investing for your retirement or fund another financial goal, such as saving for your children’s college expenses, you have several options. Here are the top investing options that you have when investing 100,000 dollars.
· Get a Diversified Portfolio with Passive Stock Investing
You can choose to invest in the stock market passively if you are looking for a hands-off approach to investing 100,000 dollars. You can put that sum of money into an index fund or mutual fund to diversify your portfolio. You can invest 100,000 dollars in one account, like a taxable brokerage account, or divide it between a taxable account or retirement account to take advantage of the tax perks.
· Trading Individual Stocks with Active Stock Investing
If you want to turn your 100,000 dollars into more money quickly, you should look to trade in individual stocks. It ensures you control your money, but it will take more work from you since you will need to research companies that you believe in and understand. You can track performances to ensure that you can buy and sell as required.
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