Where to invest 100k in 2025

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Where to invest 100k in 2025:

Stock Index ETFs: Optimal Diversification with Market Growth
Treasuries: The Safest Investment Option
Pay Off Your Debts: Secure Financial Freedom
Industry ETFs: Targeted Sector Investments
Stock Portfolio: High Growth Potential
Roth IRA: Tax-Free Retirement Savings
Cryptocurrencies: High Risk, High Reward

Investing $100,000 wisely requires a thorough understanding of various financial options and their potential impacts on your portfolio. To assist you in making an informed decision, we have analyzed and rated the top seven investment choices based on factors such as risk level, potential returns, liquidity, tax advantages, and diversification. This comprehensive comparison will help you evaluate each option's benefits and drawbacks, ensuring that you select the best strategy to meet your financial goals in 2025.

What Investors Should Consider in 2025

As you get ready to invest your $100k this year, it's important to consider the trends that will shape the markets in 2025. Understanding what's ahead can help you tweak your portfolio accordingly. Here are a few things experts say are worth paying attention to.

Continued interest rate hikes from the Fed will likely make bonds less appealing this year. With rates rising steadily over the past few years, fixed-income instruments won't deliver the same yields. You'll want to be cautious there
Regulations seem poised to tighten as well, as regulators work to curb financial misconduct and protect consumers. Stay on top of any policy changes so you can adjust your positions if needed
Uncertainty from the ongoing pandemic recovery means resilience will be key. Look for holdings that can weather economic storms
Tech's growing influence as trends like artificial intelligence take off is something to factor in too. AI strategies in particular are gaining traction for their accuracy and efficiency - considering incorporating some may pay off
A strong job market and rising wages bode well for labor-leaning companies. Those industries seem well-positioned if compensation keeps trending up
Diversifying into alternative assets also remains a compelling strategy. Just be sure any exotic bets like private equity, real estate, or crypto fit your broader goals

How to Invest $100K- General Ideas

The stocks and bonds market is often the perfect gateway to personal investing. These assets that follow the 60/40 investment plan-60% stocks, 40% bonds- is revered as a trusted guideline for a moderate risk investor. And for a good reason.

According to Goldman Sachs, the classic 60/40 portfolio generated an impressive 11.1% annual return over the last decade (2011-2025.) However, the net yield for the bonds market is currently negative, with stocks leading for a long time.

As you search for the best way to invest 100K, you need to give preference to stocks. Besides, you can look into other promising investment types such as REITs, copy trading, cryptocurrencies, and starting your own business.

Diversification is Key

According to Billionaire Investor Ray Dalio, the “Holy Grail to modern-day investing” is the diversification of your portfolio in a way that minimizes your risk without impacting returns.

Dalio suggests selecting a handful of assets with little to no correlation to hedge against unforeseen market turbulence. Diversification can reduce your risk exposure while maintaining your expected returns.

Top 7 Financial Options to Invest $100,000

You can pick the type of investment vehicle that relies heavily on your goals, current circumstances, and risk tolerance. Here are our top seven picks on investing 100K in 2025.

Here's the comparative table with the provided ratings:

Popular investment options compared
Investment Option	Risk Level	Potential Returns	Liquidity	Tax Advantages	Diversification	Overall Rating
Stock Index ETFs	Medium	Moderate to High	High	Moderate	High	9/10
Treasuries	Low	Low	Very High	High	Low	6/10
Pay Off Your Debts	Very Low	High (interest saved)	N/A (debt reduction)	N/A	None	8/10
Industry ETFs	Medium	Moderate to High	High	Moderate	Medium to High	7/10
Stock Portfolio	High	High	Moderate	Moderate	Low to High (depending on selection)	9/10
Roth IRA	Low to Medium	Moderate	Low to Moderate	Very High (tax-free growth)	High (varied investment options)	7/10
Cryptocurrencies	Very High	Very High	High	Low	Low	6/10

1. Stock Index ETFs

Overall rating

9/10

The Exchange Traded Fund (ETF) is a type of investment security that keeps track of a particular sector, commodity, index, or asset. For example, stock Index ETFs contain a basket of stocks that track a single sector.

You can enjoy a diversified exposure to a single industry such as the automotive sector by monitoring their stocks.

Warren Buffet, the founder of Berkshire Hathaway, is an ardent fan of stock index ETFs. On average, indices grow in value by nearly 10% annually over the years. It is difficult for a rookie investor to beat such returns.

SPDR Financial Select Sector ETF

The SPDR is an example of a stock index ETF that tracks the performance of the S&P Financial Select Sector Index. The index includes a broad range of stocks from the financial services sector, including banks, insurance companies, and REITs.

The fund offers a dividend yield of 1.93% with an annualized return of 5.12% as of mid-2020.

Considered low-risk investments through diversification.
Takes the guesswork out of your investment plan by matching market performance over time.
Stock ETFs are more liquid than mutual funds
You can enjoy lower brokerage fees.

Since ETFs contain a basket of stocks, the potential returns may be significantly lower than buying individual stocks.
ETFs typically hold cash, and tracking errors are pretty common. As a result, investors may need to dip into their pockets to pay administrative expenses and management fees.

2. Treasuries

Overall rating

6/10

Treasury bonds are debt obligations issued by the U.S. government and backed by the full faith and credit of the United States. They are considered to be one of the safest investments available, as they are backed by the government and have low default risk. As of February 2024, short-term treasury bills had an interest rate of 4.74 percent. 10-year treasuries have a rate of 3.92 percent.

Benefits of Investing in Treasuries

Investing in treasuries is a great idea for many reasons. Here are some of them.

Low Default Risk

Because treasury bonds are guaranteed by the U.S. government, they have a very low default risk compared to other types of investments. For investors, this means they are a safe and reliable investment option.

Tax Advantages

Treasuries also offer tax advantages to investors, as some of the interest earned on them is exempt from state and local taxes. This can help investors reduce their overall tax burden. In addition, capital gains from treasuries are also taxed at a lower rate than other types of investments.

Liquidity

Treasuries are highly liquid investments, meaning they can easily be converted into cash without any significant loss in value or time delay in doing so. This makes them attractive to investors who may need access to their funds quickly or unexpectedly.

Cons of Investing in Treasuries

One downside to investing in Treasury bonds is that you're going to get a lower rate of return compared to other investments, such as stocks or mutual funds, which offer higher potential returns but also come with more risk involved than Treasuries do.

3. Pay Off Your Debts

Overall rating

8/10

You may be in a dilemma after your 100K windfall: to pay off your existing debts or place the money in investment vehicles that will grow in the future. Left unpaid, your debts will also accumulate interest and penalties that may weigh you down financially.

Investing may only make sense if you can earn more from the investments than your debts cost you on interest. Paying off high-interest loans provides a better return for money than any investment class.

Pay off Your Debt

Paying off debt is one of the best investments you can make with your $100K windfall. This is especially true if you're dealing with high-interest debt like credit cards, which can spiral out of control and become unmanageable if not paid off. Besides, it makes little sense to invest in other assets when you are still carrying debt that accrues interest.

For instance, the current credit card interest rates of over 20 percent can be multiple times higher than the return on the best-performing asset classes, such as stocks or bonds. By clearing your debt, you can save thousands of dollars in interest payments and become better equipped to move forward with your financial plan.

Eliminates high-interest rates that can stagnate your financial journey to financial independence.
Peace of mind as you don’t have to worry about debtors contacting anymore.
Repayment of higher-interest debts may provide better returns than most investment vehicles.

Less money left behind to invest and safeguard your financial future.

4. Industry ETFs

Overall rating

7/10

These are pooled investment funds that focus on tracking stocks and securities of a particular sector. For instance, you can invest in sector ETFs that track a basket of technology or energy stocks.

Your investment asset is passively managed through an underlying index of the said sector. The Global Industry Classification Standard(GICS) is the primary standard used to classify the different sectors.

GISC’s hierarchy starts with 11 sectors classified into 24 industrial groups, 68 industries, and 157 sub-industries.

You can create a diversified portfolio by investing in a mix of small, medium, and large-cap stocks. In addition, you can fine-tune your investments to match your risk tolerance by placing close attention to growth and value stocks.

Industrial Select Sector SPDR EFT

The SPDR industrial select sector fund tracks the yield performance of publicly traded equity securities of companies under the Industrial Select Sector Index. The EFT falls under the industrial sector (XLI).

Increased diversification with the ability to trade different industries, commodities, or assets across the globe
Enjoy low brokerage fees
Trading flexibility, with increased liquidity of the asset

Hidden risks that arise when trying to blend different global indexes
Lower dividend yield depending on the market sector you choose to trade-in

5. Stock Portfolio

Overall rating

9/10

The stock market is often the first thing most individuals think of when you mention investing. The historical annual returns of between 7% to 12% make owning a stock portfolio one of the best ways to invest 100K in 2025.

Stock trading involves buying and selling of shares of listed companies. Picking individual stocks to invest in can be difficult for new market entrants, requiring tons of research. Yet even professional traders lose out on the market sometimes.

The volatility in the market is pretty high, allowing for day and intraday trading. If you are uncomfortable with the highly volatile market, consider diversifying your portfolio with lower-risk investments.

Grow your portfolio with the economy
Stay ahead of inflation with better returns
Easy to buy
Low minimum balance required to start investing

You risk losing it all through volatility trading
It takes time to identify and research companies you are willing to invest in
You pay taxes on profitable stock sales

6. Roth IRA

Overall rating

7/10

Roth IRAs are individual retirement accounts where you pay taxes on money going in, and all future withdrawals are tax-free. These retirement savings accounts allow you to plan for your future, enjoying tax-free growth on your investments.

How does a Roth IRA work?

You contribute and pay taxes on your investment upfront, let your money compound, and withdraw in retirement tax-free. In addition, you can enjoy a variety of investment options within a Roth IRA, such as mutual funds, stocks, bonds, ETFs, and index funds. The maximum amount you can deposit in your Roth IRA in 2025 is $6000.

Opening a Roth IRA

You need to research institutions that have approval from the IRS to offer IRAs. These may include banks, brokerage firms, credit unions, and loans and savings associations.

The institution you pick may have a significant bearing on the list of investment options available. If you plan to become an active investor, find a provider with low management fees.

Tax-free growth on your investment
Can double up as your retirement plan
No required minimum distributions

You cannot withdraw account earnings within the first five years from the initial contribution.
The five-year rule makes the Roth IRA less appealing to individuals in their late middle ages.

7. Cryptocurrencies

Overall rating

6/10

Cryptos are a hot topic now, gradually becoming a common answer to where to invest 100K in 2025. These digital coins operate on a decentralized blockchain platform without any control from any singular institution.

Cryptocurrency is an excellent alternative investment for individuals willing to accept the high-risk volatility of the market. However, whether investing in bitcoin or other altcoins, you need to conduct proper research before purchasing or trading the asset.

Searching for stable crypto coins can become a way to diversify your investments. Bitcoin is part of portfolios for top investors, including Ray Dalio and Bill Miller.

Besides, an increasing number of institutional and retail investors seek Bitcoin as a perfect hedge against inflation. As a decentralized blockchain network, Bitcoin’s value isn’t tied to any one economy or currency.

Moreover, the crypto has a finite number of coins at 21 million. Nearly 19 million of the bitcoins have been mined. A fixed supply means fewer coins join the circulation, minimizing inflation risk.

The volatile nature of the crypto market makes it a high-risk investment, with the potential to wipe clean your entire portfolio. Consider a frequent re-evaluation and rebalancing of your crypto holdings to hedge against the volatility.

Independence from a central authority
Higher return potential
An ideal hedging investment against inflation

Highly volatile markets that can wipe out investment accounts
Researching different coins and their offerings may take a lot of time and effort
Increased risk of falling for crypto scams and losing your investment

Where to buy Crypto?

	OKX	Kraken	Crypto.com
Coins Supported	329	278	250
Spot Maker Fee, %	0,08	0,25	0,25
Spot Taker fee, %	0,1	0,4	0,5
Staking for long-term passive income
Open account	Open an account Your capital is at risk.	Open an account Your capital is at risk.	Open an account Your capital is at risk.

Where to copy top traders?

We have compared the conditions of the top 3 brokers for copy trading according to the Traders Union evaluation methodology.

	Pepperstone	OANDA	FOREX.com
Currency pairs	90	68	80
Min Spread EUR/USD, pips	0,5	0,1	0,7
Max Spread EUR/USD, pips	1,5	0,5	1,2
Min. deposit, $			100
Open account	Open an account Your capital is at risk.	Open an account Your capital is at risk.	Study review

How to Invest $100,000 Right Now?

1. Define your goals

Before investing any money, you need to develop a target goal. A compelling goal holds the rudder, determining the direction in which your investment ship will sail. For example, you can propose goals such as a rich pension, financial independence, living on interest, quick profits, and much more.

2. Determine the amount for investment

While there isn't a defined amount of the 100K you should invest every month, you need to create criteria for picking your investments. Also, take note of advisory fees that can cost you 10-30%.

3. Open an Investment Account

The next step involves opening an investment account. You need to research the different brokerage firms, commissions charged, minimum investment balance, and investment options provided.

How to Invest $100,000- Top 3 alternative Ideas

If you are still wondering what to do with 100K, alternative ideas bear a higher risk profile. However, you have the potential to enjoy a potentially faster and higher return.

1. Business

Overall rating

8/10

Most people tout entrepreneurship as the most fulfilling investment decision they have ever made. You can use the 100K as capital for your startup or existing business. Self-funding allows you as a founder to retain equity without burdening your enterprise with debt payment during its initial stages.

Self-financing gives you better control over your investment decisions
You retain full ownership of the shareholding within the business
Better and higher returns if you succeed

High-risk investment, with all the money staked on the startup's success
Active participation in the running of your investment

2. Real Estate

Overall rating

6/10

Real estate investing is another excellent alternative to invest 100K in 2024. The typical investment model often involves buying property then flipping or renting it out. However, purchasing physical real estate and renovating it can be prohibitively expensive.

Fortunately, real estate investing goes beyond the conventional buy-flip-rent model. Instead, you can invest in a real estate investment trust (REIT). REITs function similarly to mutual funds, investing in different properties with a higher rate of return. Besides, your investment is automatically diversified over a range of projects.

Real estate appreciates over time, providing better returns on investment
Unique tax benefits such as depreciation and tax-deductibles
REITs can diversify your portfolio over several properties

Prohibitively expensive, resulting in poor asset allocation
Unique risks such as purchasing the wrong property at the wrong time can damage your portfolio

3. Copy Trading

Overall rating

4/10

As a rookie investor wondering what to do with 100K, the risk of making poor investment choices that blow your money is significantly high. Copytrading allows investors in the financial markets to automatically open and close positions from more-skilled investors.

You can eliminate the constant guesswork on money markets by following an experienced trader’s investment decisions. The first step involves creating a trading account with a reliable broker and linking it to a professional’s main account for money management.

A great way for rookie investors to gain entry into the financial investment world
Network with experienced investors to gain more knowledge
Gradually make money with profitable trades taken by the skilled investor

Determining a legitimate, professional trader to follow can be difficult
Finding a suitable copy platform is also challenging
You need to closely monitor losses to avoid blowing all your money on a bad trade

Understanding Your Risk Tolerance

It's important to start by objectively assessing your risk tolerance. Many financial advisors use questionnaires that evaluate factors like your ability to handle losses, time horizon, and emotional reactions to volatility. This provides data-driven insights beyond your self-perception.

From there, you'll want to structure your portfolio appropriately. If questionnaires indicate you have low-risk tolerance, begin with a higher bond or cash allocation and slowly increase stocks over time as you become more comfortable with investment instability. Another approach is using target date funds, which automatically reduce equity exposure as your target retirement year approaches.

Regardless of your assessed tolerance, always diversify your investments. Don't put all your capital in one stock, sector, or geographic region. Maintain a mix of large/small, domestic/international holdings to reduce non-systematic risk from any single source.

Also, think about including a "bond tent" strategy for the five to ten years before retirement. Gradually increasing your fixed income allocation shields your nest egg from major downturns right when you need the funds. Additionally, establish a 3-6 month emergency savings balance in a high-yield savings account to avoid selling investments at inopportune times.

Finally, periodically rebalance your portfolio to maintain your intended risk level as specified by your time horizon and tolerance.

Summary

Deciding how to invest 100K can be equally exciting and overwhelming. With the right investment choices, you can turn the lump sum of 100K to long-term wealth within no time. You need to diversify your investments, keeping your risk-reward ratio on the low.

FAQs

What should I invest $100k in right now?

There are plenty of options to choose from, depending on your goals and risk tolerance. Stock Index ETFs are particularly attractive, with their value growing by almost 10 percent over the last decade.

What is the smartest way to invest $100k?

For those with debt, it's often wise to pay it off first before investing. After that, you can consider a diversified portfolio of stocks and Roth IRAs, and crypto.

How can I make money with $100k?

The best way to make money with $100k is to invest it in assets that can generate returns for you.

How much interest can I earn on $100k?

That depends on the type of investments you choose and the current market conditions. For example, Treasury bonds are considered to be one of the safest investments available and have an interest rate of 4.74 percent as of February 2024.

When Should You Start to Invest?

It's never too early or late to start building long-term wealth. First, begin eliminating high-interest debts and create an emergency fund account, then kick start your investment journey.

How Do You Know When to Sell?

It can become confusing in the trading world of “buy low sell high” to know when to liquidate your assets. You need to assess your financial health and portfolio balance before getting out of your positions.

What Are the Major Investing Red Flags?

If the deal is too good to be true, then it probably is. Additionally, no investment is ever 100% risk-free. If the investment product is too complex to understand, stay away from it.

How Much Income Do I Need to Save to Reach $100,000?

Saving ought to be a lifelong habit. Start by saving at least a quarter of your gross salary and gradually increase the percentage as you age.

Team that worked on the article

Mikhail Vnuchkov joined Traders Union as an author in 2020. He began his professional career as a journalist-observer at a small online financial publication, where he covered global economic events and discussed their impact on the segment of financial investment, including investor income. With five years of experience in finance, Mikhail joined Traders Union team, where he is in charge of forming the pool of latest news for traders, who trade stocks, cryptocurrencies, Forex instruments and fixed income.

Learn about our editorial policies

Dr. BJ Johnson is a PhD in English Language and an editor with over 15 years of experience. He earned his degree in English Language in the U.S and the UK. In 2020, Dr. Johnson joined the Traders Union team. Since then, he has created over 100 exclusive articles and edited over 300 articles of other authors.

Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets. Her specialties are daily market news, price predictions, and Initial Coin Offerings (ICO).

Investor

An investor is an individual, who invests money in an asset with the expectation that its value would appreciate in the future. The asset can be anything, including a bond, debenture, mutual fund, equity, gold, silver, exchange-traded funds (ETFs), and real-estate property.

Diversification

Diversification is an investment strategy that involves spreading investments across different asset classes, industries, and geographic regions to reduce overall risk.

Cryptocurrency

Cryptocurrency is a type of digital or virtual currency that relies on cryptography for security. Unlike traditional currencies issued by governments (fiat currencies), cryptocurrencies operate on decentralized networks, typically based on blockchain technology.

Index

Index in trading is the measure of the performance of a group of stocks, which can include the assets and securities in it.

George Soros

George Soros is a prominent billionaire investor and philanthropist known for his involvement in financial markets, including forex trading. He gained fame for his successful currency speculation in 1992 when he famously bet against the British pound, earning him a significant profit and the nickname "The Man Who Broke the Bank of England." Soros is also known for his political and philanthropic activities through organizations like the Open Society Foundations.

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