If you save up 100k, you should invest it so it increases. Can you grow it to 1 million? Learn how to invest 100k to make 1 million and earn a fortune!
Robo advisors, the stock market, cryptocurrency, real estate, and a business are some of the investments that will help turn your 100k into a million. With enough appetite for risk, a concrete plan, and extensive market knowledge, you can become a millionaire!
Read on to learn how you can invest your $100,000 and turn it into a million!
How to Invest 100k to Make 1 Million
First off, congratulations! Having $100,000 to invest is a luxury exclusive to a few people. On average, Americans have $9,600 to $51,400 in their savings account, depending on their age.
Investment opportunities abound, each with its promise. Some are too good to be true, but there are practical options. The most important is to do your research and know the risk that you want to take. In general, below are some of the best things that you can do with your $100,000 if you dream of eventually turning it into a million:
1. Robo Advisor
Too lazy to manage your investments? Not confident about your market knowledge? Looking for the best financial advice without spending a fortune? In all these instances, a Robo-advisor is promising.
A Robo-advisor automates investing services. It uses advanced computer algorithms for building and managing an investment portfolio. It is a brokerage account that works similar to having a financial advisor, except that the fees are lower, and everything happens through automation.
The process often begins by creating an online account. You’ll also fill out a questionnaire, which will evaluate your risk appetite. The Robo-advisor will then choose the best investments depending on its assessment and automatically allocate your funds to different investments.
The Best Options for Robo Advisors
For effortless investing, below are some of the top Robo advisors that can be instrumental in growing your $100k to $1 million:
- Betterment: Save for the life you want – this is what the company wants its customers to do. It has tax-smart and socially responsible investments. For a minimum balance of $100,000, they charge an annual fee of .4%.
- WealthFront: The company focuses on simplifying your finances and automating your investments. From emerging markets to dividend stocks, they will diversify your portfolio to minimize risks. They have already managed $25 billion of client funds, which speaks a lot about their reputation.
- Vanguard: Providing sensible and convenient guidance, this Robo advisor uses a tested investment methodology to manage your funds. They charge a gross advisory fee of .2%, which means you will pay $200 if you invest $100,000.
2. Stock Market
This is one of the famous strategies for long-term wealth building. On average, the annual return ranges from 7% to 10%, depending on the stocks you choose and the market performance.
It is also quite easy as all you need is to have an online brokerage account. If you do not want to manage the funds yourself, you can also work with a Robo advisor, as mentioned earlier. Nonetheless, you need to do your research and trade at your own risk to make well-informed choices.
While stock investments are for the long haul, it pays to manage your portfolio actively. There will be fluctuations, but these should not discourage you. Look for ways to minimize your risks while maximizing the returns.
The Best Stock Market Trading Platforms
One of the vital decisions is your choice of a trading platform. If you are clueless about what to use, here’s a quick look at some of our top picks:
- Fidelity Investments: From commissions to fees, this is a competitive trading platform. You can make the most out of your every dollar without being overcharged for the use of their service. You can choose from more than 7,000 stocks and mutual funds that are available in their investment offers.
- TD Ameritrade: A great choice for beginners, it has a seamless interface that makes stock investing convenient. It also has various educational materials available to help beginners navigate the stock market.
- Charles Schwab: Known for its exceptional customer service, this is another good trading platform for those who hate complications. They make investing effortless while providing a wide array of stock choices to diversify your portfolio.
A digital gold rush – this is how people are describing cryptocurrency. It has made billionaires, such as Cameron and Twinkle Winklevoss, Michael Saylor, Matthew Rozsak, and Tim Draper.
If you have $100,000 right now and want to turn it into a million eventually, cryptocurrency investments are promising. However, one thing that you have to understand is the volatility of the market. The movements are crazy, so expect that while you can win big, the losses can be devastating.
In recent years, cryptocurrencies have gained mass adoption, although it still has a long way to go. In many countries, it is already regulated, which is paving the way for its global legitimacy.
The Best Cryptocurrencies to Invest In
Clueless about the best crypto where you can put your money in? Here’s a quick look at some of the top options that are worth considering:
- Bitcoin: Even after more than a decade following its introduction, bitcoin remains the most popular cryptocurrency. In April 2021, the price surged to over $60,000 for one bitcoin. It accounts for more than 45% of the circulating cryptocurrencies. Banks and hedge fund managers are recognizing bitcoin.
- Ethereum: The next most popular cryptocurrency after bitcoin, Ethereum is a blockchain technology based on a software platform. It aims to deliver smart contracts as one of its real-world applications. Currently, it has a market cap of over $400 billion.
- Cardano: This is one of the most affordable cryptocurrencies with huge potential. It is designed to deliver more than just payment processing. It can also run smart contracts and is on its way to having more uses.
4. Real Estate
Another good way to invest $100,000 to make $1 million is through real estate. Nonetheless, not everyone who purchases a property will become a millionaire. You need a robust strategy to grow your capital.
Market saturation is one of the biggest challenges. You need to stand out to win. Look for properties with huge potential for growth and work towards making them more saleable. From maximizing the client experience to leveraging social media, consider different tactics to make your property better than what everyone else offers.
Location is also an essential consideration. Whether you are building from scratch or flipping, pick a property in a safe and accessible neighborhood to drive its value up. Do your research to know the hottest locations.
Getting rich in real estate is not just about selling residential properties. You can also consider commercial properties as an alternative. Leasing is also a good idea, especially if you want a consistent long-term income.
The Best Ways to Become a Millionaire in Real Estate
Not everyone who ventures into real estate will make it big. Below are some tips that can help you succeed.
- Invest in Rental Properties: If your goal is to have a sustainable long-term income, which can eventually accumulate millions, rental is a good idea. You can increase the rent through the years depending on economic indicators. You can even turn your properties into Airbnb.
- Buy Mortgage Notes: This is a great opportunity to earn passive income. By buying mortgage notes, you can earn from interest. The longer the loan duration is, the higher is the interest that you will be paid for.
- Flip Houses: Flipping is a real estate investment strategy wherein you will buy a house and later sell it at a profit. It includes repairs and renovations to increase the property’s value and wait for the right time to sell the house at a higher price than its acquisition cost.
Go bold and build a business if you want to become a millionaire with $100,000 capital. This is a common path that many people tread, but only a few are lucky to succeed. You need to start with an idea and turn it into a tangible product or service. Look for something that the market lacks and fill such a gap.
The best businessmen are relentless in their pursuit of success. They recognize the obstacles along the way, but they do not let them limit their potential. They are willing to push the boundaries. Do not be afraid to challenge the conventional.
The Best Businesses to Start with $100,000
Here are some ideas if you want to build your business and become a millionaire:
- Restaurant: Food is essential. It is something that people will always want and often willing to pay for. Find a nice concept that is unique to the competition. From designing the restaurant to curating the menu, work with a competent team to offer an unforgettable experience to your customers.
- Affiliate Marketing: You don’t even need $100k to start this business. Your goal is simple – find a product, promote, and earn from commissions. It might be a long way, but once you found your niche and attract a large audience, you can become a millionaire.
- Agriculture: With rapid urbanization, agriculture is a dying industry. Especially if you live in a place where there is a high demand for agricultural products, this is a good business idea.
What Kind of Investor Are You?
Before thinking of any investment, you should first assess the kind of investor that you are. This will determine your attitude towards risk. In turn, it dictates the potential yield of your money:
1. Risk Averter
If you are a first-time investor, you are probably a risk averter. This means that you are unwilling to take any risk. You would rather play it safe. You are afraid that you will lose your money, so you often tread with caution.
2. Risk Neutral
Under this category, investors are willing to take some risks. You are willing to pay an equal amount depending on the return that you expect.
3. Risk Taker
This is where most people who want to invest $100,000 to make $1 million falls under. You are willing to pay more and swallow uncertainties in exchange for a high yield.
Tips for Investing $100k
Make the most out of your investment. Below are some of the best things to do to increase potential yield:
- Start with a plan. Have something concrete in mind, which will dictate your direction. When you fail to plan, you plan to fail.
- Manage the risks and expectations. While it is good to have ambition, you should be practical. Layout the pros and cons of each investment opportunity.
- Diversify your investments. Most millionaires will advise that you should not put all your eggs in one basket. This is an effective way to spread the risks.
- Do something that you love. The more passionate you are about one thing, the more effort you will put into it.
- Find ways to minimize taxes without doing something illegal. High taxes will take a toll on your earnings, so you should learn how to lessen its burden.
- Surround yourself with the right people. Be friends with millionaires, and you can adopt the same mindset. They can even become your mentors.
Conclusion – How to Invest 100k to Make 1 Million
To become a millionaire – this is what most people dream of. Unfortunately, only a few people achieve its reality. If you already have $100k to start with, consider yourself lucky. You can invest in Robo advisors, stocks, cryptocurrencies, real estate, and businesses. The returns can vary depending on the market performance and duration, among other things.
While there are many opportunities to turn your $100k into a million, they are not all promising. Do your research and tread with caution. Prudence and due diligence are important. You should also know the risks and manage them effectively. Dream big but do not lose yourself in the process.