How to Invest $100,000 the Smart Way

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By Jacob Maslow

What would you do if $100,000 landed in your lap tomorrow? If you were wise, you’d invest that money smartly. But once you reach seven figures, knowing where to invest can be overwhelming. So here are six smart ways to invest $100,000.

Pay Off Debt and Establish an Emergency Fund

If you haven’t done so already, the first thing you should do is pay off your debt and stash $15,000 in an emergency fund. An emergency fund will help keep you afloat if you should lose your job or a medical emergency comes up. Paying off your debt is a wise investment in itself.

If you still have some cash after paying off debt and setting up an emergency fund, here are some dependable ways to invest whatever money you have left.

High-Yield Savings Accounts

These accounts have guaranteed payouts, but they don’t provide high returns on your money despite their name. They do, however, offer higher returns than the average savings account.

If you aren’t sure where to invest your $100,000, a high-yield savings account is an excellent choice for short-term investing.

Money Market Accounts

Money market accounts are another smart and safe way to invest. Just be forewarned that they don’t offer huge returns like a high-yield savings account. That said, you’ll likely get more out of a money market account than a CD.


If you’re looking for guaranteed returns, fixed annuities are a great option. But just like any other investment, they could be great in certain situations and terrible in others.

With a fixed annuity, you can be sure that at least part of your investment will be safe, but the returns will be smaller.

Fixed index annuities, also known as FIAs, also offer guarantees and are similar to a fixed annuity in that they offer principal protection. The primary difference between the two is that FIAs will use a combination of interest caps and tracking various market indexes to determine your return. However, they do offer a “pension-like” benefit.

Real Estate

Real estate can be a smart option if you’re looking for a stock market alternative. There are several ways to invest $100,000 in the real estate sector. For example, you could purchase a home for around $100,000 in the suburbs and collect cash flow from the home without ever having to deal with the bank. Or, you could use that $100,000 as a 20% down payment on a $500,000 apartment complex and see a higher return.

That’s the great thing about real estate investing – you have so many different options.

Cash- Value Life Insurance

Cash-value life insurance makes sense as an investment in certain situations. If you invest the full $100,000, the insurance company may pay you a 3% dividend. Compared to the interest rates currently available in CDs or your local bank, cash-value insurance may provide you with a better return. Just keep in mind that you’ll have to pay for the insurance, which could cut your 3% dividend down to 1.8%.

The good news is they’ll never make less than 1.8%, and if the market is up, you make more money, too.

This type of investment makes sense if you have extra money sitting in a bank CD. But it’s important to note that you’ll need to go through the underwriting process because this is a life insurance policy.

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