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100K is really a big number, and if you have reached a stage in your life where you are searching for the best ways to invest $100K for a year, then you are on the right track to financial freedom. Coming up to invest $100k in order to grow your wealth is an achievement all unto itself.
That said, your 100K may turn into Million dollars if invested well. You may see exponential growth in your earnings if you invest them with proper research. In this article, I would share the best 7 ways to invest your 100K to increase your earnings.
7 smartest ways to invest 100K for a year
1. Invest in Real Estate:
Undeniably, real estate is the best kind of investment. It provides you with an enormous amount of benefits for generations. You’ll have a steady and predictable cash flow for the rest of your life. Real Estate is to be considered the safest and most profitable investment if you get into this business.
The best thing in this field is you can have more property than you can actually have by leveraging your finances. You must have a good credit score and you are good to go. You can actually have a property worth one million if you use your 100K as a down payment to acquire the property. After calculating your EMIs, rent the property to cover your EMIs with some profit.
Cash flow, you’ll have the cash flow for the rest of your life. The one million dollar property you rented out brings you a decent amount of money that you can invest in any other ventures you want.
Tax Advantages, paying taxes in America is an expensive thing, and no one would miss an opportunity to have tax advantages. There are tax incentives if you own any real estate property. For instance, your expenses of running a property – maintenance, home improvements, and paying mortgage interest all of these can be reported as deductions to lower your taxes.
In addition, if you are selling your investment property, you would be subject to capital gains tax, but using a 1031 exchange, you can transfer the gains to a new property you purchased. The U.S. tax system, therefore, incentivizes you to continue investing in properties and boost your wealth.
2. Invest in Stocks:
Undoubtedly this is one of the best ways to invest your money for any period of time (long term is preferred). Still, people ask, if it is possible to turn 10k into 100k in the stock market, and my answer to them always remains the same, you have wasted time while asking this question. Yes, definitely investing in the stock market is the best option to grow your money exponentially, provided you have done in-depth research about stocks you want to invest in.
You can diversify your investment portfolio with stocks. You can invest in an industry that is trending at the time, or have a better future like the gaming industry, technology, pharmaceuticals, and many more industries you may choose according to your research and preferences.
The returns in stock investments are generally quite strong, usually, you’ll around 12-13% but in some cases, it might be over 30-40% in new companies or due to market news.
Microsoft has given returns of more than 48% in last year. The return is extremely high as there are very few chances that you will get such results anywhere else
In addition to this, you should also look for dividend stocks. Dividend stock can you a stable source of income, you can either reinvest that money to increase your profits or use it as pocket money to buy stuff. Microsoft gives you dividends of 0.74% whereas Intel gives around 2.6% of the dividend.
3. Invest in Cryptocurrency:
Well, this should be on the top, as you can never have such awesome results. Crypto is the only place where you may have returns of more than 1,000%. The trend of crypto has increased over the years, as a result, many websites have implemented crypto payments methods. Many countries made crypto legal to mine and use on daily basis.
Due to the acceptance of cryptos in various countries, the price of many coins has increased multiple times in the last year, and one of them is the Eth coin. It is the #2 coin in the cryptocurrency coin tally with a market cap of $464,236,354,482. The average growth rate for eth is 200%, it has increased over 1.02K% in the last year, which is insane.
The future of this coin is also very very bright. So if you are planning to invest in crypto, then you must give a thought to this coin too. You must diversify your portfolio to avoid severe losses if you are planning to invest in cryptocurrency.
4. Invest in Mutual Funds and ETFs:
If you are looking for a safe investment then this is the right one for you. Mutual funds are the best if you don’t know how to study the market. They are the pool of different best-performing stocks, your invested amount will be distributed in all the different shares decided by the fund manager to maximize your profit. The same goes for ETFs. Particular indexes (like the S&P 500) are known as ETFs, while mutual funds are a portfolio of stocks that fund managers have carefully selected.
There are a lot of options to pick your funds, low-risk, high-risk, long-term, short term. You may choose as per your final goal, that you want to achieve. Usually, these funds provide returns of around 10-12% but there are few high-risk, high-return funds that may provide up to 18-20% of returns.
5. Peer-to-Peer Lending:
Peer-to-Peer lending is absolutely clear by its name, also known as P2P lending. In this investment, people lend money to individuals, here individual investor acts as a bank. One can lend money to anyone without asking for papers.
6. Pay off high-interest debt:
This is also a great option for you, as it is not necessary to invest when you have high-interest debt. The rate at which you will make a profit by investing your money will be canceled out by your debt. So, it will be the best decision to pay off your debt if you have any and then look to invest the rest of the money.
7. Savings:
Savings! If you couldn’t decide where you want to invest saving is the best option. Here, it is not possible to get results like cryptocurrency, stocks, or mutual funds but still, you will get something good.
Make sure you find the best APY, as still, you’ll get very low APYs. You need to search and check every bank to find the best one. Some savings accounts and money markets to consider are from Chime, CITI Bank, Ally Bank, and Capital One 360. They have great APYs among all other banks.
Emergency Funds, your savings account will act as the emergency funds that you may use for several purposes.
Final thoughts:
100K is really a nice amount that you should and must invest if you don’t have any debts. I have shared the best ways to invest your 100K to have some passive income in the really short term. There are many other ways you can invest your money, but these methods are picked to provide the best return in a short period of time.
My personal advice to you is to invest 100K in different ways, invest equal portions of money in crypto, stocks, and mutual funds. And if not this, then leverage this 100K to buy a big property and rent that out, pay your mortgage through rent. This way you could use your money in a much better way.
Still don’t get fascinated by these numbers, though they are real. Take time, research, ask your advisor (if any), and then invest. We must be confident in your investment so that if you see any downfall in your portfolio you’ll be confident in your investment.
I hope you’ll get some help from this article if there is anything you wanna ask, there is a comment section for you. See you lads in the next one!.
