6 finance professionals explain how they would invest $100,000

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What would you do if you got a financial windfall of $100,000? In today’s economy, it’s hard to figure out the best way to get the most out of a lot of money, so I asked six finance and investment professionals this question to find out what they would do in this situation.

Learn: how to invest your money in 2022
Beginner’s Guide: How to Invest Your First $1,000, $5,000, or $25,000

Here is what they said.

Wendy Liebowitz, CFP, Vice President, Division Head at Loyalty investments

There are four areas that I consider when it comes to any investment strategy: debt, emergency account, protection and growth.

First, pay off any debt that bears high interest, such as a credit card with a high interest rate. Second, save at least three to six months of essential expenses and keep those savings in a checking, savings, or money market account so you can easily access them if you ever need them. Third, depending on your risk tolerance and time horizon, consider protecting your principal, or the amount you invest, through methods such as a fixed rate investment, which tends to be less volatile.

If you are retired, you may also consider protecting the amount of income you will need in retirement through guaranteed sources of income, such as Social Security, pensions and/or annuities.

Once these three areas have been addressed, allocate the remaining $100,000 to growing a well-diversified investment strategy of stocks, bonds and cash, which can be done through individual stocks, funds mutual funds, ETFs or fee-based solutions, just to name a few options. Following these four steps should help you balance risk and reward and put you in a better financial position to achieve your long-term goals.

Amy Richardson, CFP With Schwab Premium Smart Wallets

When exploring ways to invest a financial windfall like this, the first step should be to focus on your goals. If you’re investing for retirement, a good place to start might be maximizing your 401(k), IRA, or other retirement savings vehicles. If you are looking to invest for future education costs, you may consider opening a 529 education savings plan.

Finally, if you have a wider range of financial goals in mind – whether it’s building wealth, maximizing savings, or paying off debt – a brokerage account may be a good choice. because it allows you to invest in a wide range of assets, from stocks and bonds to mutual funds, ETFs and more.

The Market: 10 Best Stocks to Invest in in 2022

The types of investments you choose will depend on your goals and the time you have to achieve them. If you have more time to invest and are looking to maximize the growth of your investment, you may want to invest more aggressively by holding more stocks.

More conservative investors typically place a larger portion of their portfolio in bonds. Whether you’re a more conservative or more aggressive investor, it’s important not to put all your eggs in one basket and instead focus on building a diversified portfolio. It is also important to avoid trying to time the markets, which is nearly impossible. The most important thing is to maximize the time your money has in the market to grow.

Jilliene Helman, CEO of Realty Mogul

In this time of market volatility, multi-family real estate has all the characteristics where a savvy investor should put $100,000 right now. I would invest in four private placement offerings, putting $25,000 into each. I would make two appreciation-oriented trades in high-demand markets, like Austin, Texas and Miami, where there is strong population growth, and two cash-flow-oriented ones. Right now, most markets are incredibly volatile and bond yields – although rising – have not outpaced the rate of inflation, making real estate one of the safest, in my personal opinion.

Michelle Brownstein, CFP, Senior Vice President of the Private Client Group at Personal capital

First, make sure you have an appropriate emergency fund, which is usually three to six months worth of expenses left over in cash. Then the rest should be invested in a diversified portfolio, probably using low-cost ETFs that match your goals. For longer term goals, it is usually appropriate to have more inventory. For a medium-term goal, being more bond-heavy is generally appropriate.

David Greene, co-host of the “Bigger Pockets” Podcastreal estate agent and investor

Given current monetary policy and the likelihood of high inflation in the future, I would buy real estate in markets where we are likely to see growing demand, population growth and wage increases. States with zero or low income tax and warm weather are very attractive to wealthy Californians and New Yorkers looking for a change of scenery and tax relief. So I would start with those regions.

Short-term rentals offer a great way for those who want to maximize their income while running a side business to learn about real estate fundamentals. If you live in one of these areas, strongly consider “house hacking” – buying a property with a low down payment as your primary residence, living there, and renting out units, rooms, in-laws’ quarters, or other rooms in the house to generate additional income and reduce your living expenses.

Winning in real estate means playing for the long term. If you invest your money in growth areas and hire a property manager to handle the details, you can turn $100,000 to $1 million over time.

Barbara Friedberg, MBA, investment expert at BarbaraFriedbergPersonalFinance.com

Before suggesting how to invest $100,000, let’s assume you are under 55, have an emergency fund, have no personal or credit card debt, and are able to leave the money invested for more than five to seven years. Under these conditions, the time has come to put a good part of this money in a diversified investment portfolio of ETFs.

The easiest route would be to invest 60% in SPDR S&P 500 ETF Trust (SPY), which is a low-fee index fund that tracks the S&P 500, or Vanguard Total Stock Market Index Fund (ETF-VTI). Then, for global equity exposure, invest 20% in Vanguard FTSE All-World ex-US ETF (VEU), and the rest could be invested in a diversified medium-to-short term fixed or bond fund, such as Vanguard Intermediate-Term. Bond ETF (BIV) or SPDR Portfolio Short Term Corp Bd ETF (SPSB).

Because we are in the midst of a stock market correction, now is the time to invest money “for the long term” in the stock market. If you fear further declines, invest $50,000 now and wait a few months to invest the remaining $50,000.

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About the Author

With eight years of personal finance experience at GOBankingRates, Jaime Catmull has built an extensive network of influencers and financial experts. Now she’s tapping into that network to get the real scoop on how you can live your best financial life and grow your wealth.