How to Invest $100,000
Having $100,000 to invest is a rare opportunity, and gives you a range of options. But the combination of a potentially life-changing sum of money and broad access to the world of financial services calls for discipline. If you're exploring how to invest $100,000, you should have a financial plan that outlines your goals and how you'll get there. You can create one on your own or work with an investment professional.

How to Invest $100,000
Having $100,000 to invest can be exciting—and a bit overwhelming. Especially if the money is a surprise windfall, $100,000 can be a real life-changer.
The good news is that this should be enough to get you past most of the minimums you might face in the investing world and give you a lot of options.
In very broad terms, you could divide your options in two:
Either you go it alone, or you work with a financial advisor.
Going it alone could take more effort, but if you have the time and motivation to learn, just follow these steps:
First, start by setting some goals for your investments.
Are you investing to buy a house? Retire?
Setting goals will help you pick your strategy.
Next, identify your investments. Are you willing to take risks? Or are you more cautious?
Riskier investments can deliver higher returns but can also mean more significant losses, so pick investments that match your goals.
And finally, build a diversified portfolio. This means spreading your money across a variety of stocks, bonds, cash, and other assets in order to manage your risk.
That way your portfolio won’t depend on just one asset.
Now if that sounds too time-consuming, then definitely consider working with a financial advisor.
An advisor can look at how that $100,000 fits with your overall financial situation and help you develop an investment plan based on your goals.
There are many ways to invest $100,000, which can be tailored to your goals:
- If you're investing for retirement and haven’t maxed out your 401(k) or IRA, contributing more to these accounts may be a good first step. You can also consider various types of deferred Tooltip , including fixed, indexed or variable.
- For educational goals, a 529 plan, Education Savings Account (ESA) or custodial account may be a good option. But keep in mind, 529 plans and ESAs have contribution limits. And custodial accounts don’t have the tax advantages of 529 plans and ESAs.
- For other goals, you could open a traditional brokerage account to invest on your own. You may also want to consider a managed investing solution.
Let's get started.
Identify your goal.
The first step is to zero in on your goal. What are you investing for? Are you saving for retirement or looking to build your overall wealth?
Select the appropriate account.
Once you've identified your goal, it's time to select an account.
There are many types of investment accounts but here are some of the common ones—organized by goal.
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A range of goals
A brokerage account can help you save and invest for a broad range of goals.
Schwab One® Brokerage Account
Allows you to invest in everything from stocks and bonds to mutual funds, ETFs, and more.
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Retirement
Tax-advantaged accounts can help you invest for retirement needs.
Traditional IRA
Allows you to invest pre-tax dollars for tax-deferred growth.
Learn more
Roth IRA
Allows you to invest after-tax dollars, and qualified distributions are tax-free.
Learn more -
Education
Tax-advantaged accounts can help you save and invest for educational expenses.
529 College Savings Plan
Allows you to save for college and qualified distributions are tax-free.
Learn more
Choose your investments as part of a diversified portfolio.
Once your account is open, you'll want to select investments to build a Tooltip . Here's how to create one:
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StepDetermine your asset allocation.
Asset allocation is the way you divide your money among groups of similar investments or "asset classes." The three main asset classes are Tooltip , Tooltip and Tooltip . In general, if you're a conservative investor looking for income and stability, you may want to hold more bonds than stocks. But if you're a long-term investor looking for high-growth potential and less concerned about immediate income, you may want to invest more aggressively by holding more stocks. See our model portfolios for sample asset allocation plans.
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StepDiversify within asset classes.
Stocks and bonds can be broken down further into different types. For example, you can invest in stocks that represent large companies (large-cap), small companies (small-cap), international companies and everything in between.
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StepDiversify within sectors.
You can break down your investments even further. For example, with large-cap stocks, you can invest in different sectors (like technology, health care and communications). Within each sector, you can also invest in different industries. For example, within the health care sector, you could consider pharmaceuticals, biotechnology or equipment industries.
You also want to select short- and long-term investments. Your timeline for an investment is also called your time horizon.
Or let a robo-advisor choose for you.
If you'd prefer to have a portfolio set up for you, consider a robo-advisor. This service provides you with a diversified portfolio of low-cost Tooltip based on your preferences. All you have to do is fill out a questionnaire about your goals and risk tolerance, and the service will assemble and manage a portfolio for you.
Stay the course.
Consider making regular contributions to your account. Explore investing a set amount of money every month (or at any regular interval), regardless of how the stock market is performing—a strategy known as dollar cost averaging. When the market is down and prices are low, you can buy more shares for your money. When the market and prices are up, you'll buy fewer shares. While dollar cost averaging doesn't protect you from the ups and downs of the market, the net effect of this strategy is that it helps you minimize downside risk.
The idea is not to try to wait for the perfect time to invest, as that's very difficult to do over time. Get in the habit. Even small amounts add up over time, thanks to the power of compounding.
Take the next step
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Take the next step.
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