Saving $100k is a huge milestone, but not everyone can achieve it easily, especially when someone tries to save money on a tight budget. If you manage to do that, that’s excellent. So, there are many ways to invest that amount effectively.
By investing $100,000 in the right place, you can earn a monthly income. From my personal experience, I can tell you that you can expect to make at least $2,000 per month, which means up to $24,000 annually.
However, it’s important to remember that your income will depend on market fluctuations; sometimes the market goes up, sometimes down, but it’s always up in the long term, especially If you’ve diversified your portfolio.
Another important factor that will surely determine your monthly income is the amount you invest and the place you have chosen. It’s not necessary to invest exactly $100k; you can invest more or less depending on your financial situation and how much money you have right now. And I’m not promising that anyone can hundred percent earn $2,000 or $5,000 by investing $100,000.
I’m just sharing my own experience because I’ve earned more than 2% per month and up to 24% in a year from an investment of $1,000. I’ve also seen other people who earn at least 1-2% monthly; it’s not trading, btw. And I’ll also discuss my strategy.
Best Ways to Invest $100k for Monthly Passive Income
Here you are, the seven best tips that can help you make passive income every month by investing your $100,000 or any other amount.
1. Real Estate Investments
If you have about $100,000 and are now thinking about where you should invest, investing in real estate might be an excellent choice and a smart money move. It’s a traditional method of making monthly passive income that everyone likes.
All you have to do is buy a property that you can rent out. Many people also use Airbnb because it’s a great way to earn money, too. Most people prefer Airbnb for short-term vacation rentals, where they stay for just a few days or weeks. However, your property should be in a good location to attract guests.
Besides this, if your property isn’t in a tourist location, then you can rent it out to someone who doesn’t have a home or is looking for a place for an office, etc. And you can make a monthly income. On the other hand, the value of your property would also be increasing, so don’t get surprised if, in a few years, your $1000k turns into $150k or even $200k.
The best thing about investing in rental property is that you don’t need to be an expert, unlike the stock market and trading. In rental property, you just need to find a place and rent it out, and in return, you’ll receive money monthly. This is called passive income because you’re not working every day to earn that money; you’ve already done your part by buying this rental property. Now, your money is working for you.
2. Dividend-Paying Stocks
If we talk about investing, my favorite choice is to put my money in the stock market. There, I can make money in two ways: first, the price of my stocks will increase, and second, I’ll also earn dividends. There are many different companies in the US market that offer good dividends, such as Coca-Cola and Johnson & Johnson. Although these aren’t the only companies that pay dividends to investors, there are many other companies that also provide good dividends.
However, it might be risky. You have to do some research before making an investment in the stock market. Make sure you’re choosing the right stocks and in different sectors. Don’t invest all of your $100,000 in one company. You have to diversify your money.
You can choose sectors like Tech, Healthcare, Utilities, or any other. But make sure to check out the dividend history of the company you are investing your money in. Here, our main aim is to earn passive income.
Also read: Passive Income Ideas
3. Peer-to-Peer Lending
Another way of making passive income from your money is to put your money into peer-to-peer lending. In P2P, you’ll be like a bank because you’ll give your money to someone who needs it for a specific time, and you will earn interest on it. There are many platforms that you can use to lend your money peer-to-peer, such as LendingClub, Prosper, etc.
However, whether you’re using this Peer-to-Peer Platform or any other, make sure to read reviews because you don’t know if the person to whom you’re giving money is genuine or not. You can check their credit profiles, etc., to make sure you’re giving money to the right person and can earn good interest.
Moreover, you should also do some maths, for example, platform charges, and how much money you’ll receive, time period, etc.
4. High-Yield Savings Accounts and CDs
If you want to play safely and don’t really want a higher return because your safety is important for your money, then High Yield Saving Accounts and CDS might be a good choice for you, where your money is highly safe.
Another good thing about investing in savings accounts or CDs is that your money is liquid, which means you can take your money out whenever you want without getting any penalty. On the other hand, you have similar options available, such as Mutual funds, but you can get a penalty if you try to get money back before the time because they’re not usually liquid. Also, liquid funds do exist.
You can also lock your money in CDs (Certificate of Deposit) for six months or five years. And depending on the bank, you’ll earn interest. Some banks pay 4%, and some pay more. So you have to find a better deal with your bank or anyone through a broker app.
5. Invest in a Business or Franchise
Another choice that you might consider is investing in a business or a franchise or starting your own business. I’d consider investing in a business or franchise because we are talking about passive income. And you don’t need to have a billion dollars in the bank to invest in a business. You can do it with a small amount and earn a semi-passive income.
There are many businesses out there, such as Subway and Dunkin. So you can buy their franchise. Besides this, there are many more famous brands. If you are buying their franchises, you don’t have to promote them because they are already well known. You’ll just need some employees who will work for you. And yeah, here you go.
If you don’t want to invest in a franchise, then you can also invest in a small business that’s already making business. For example, neighborhood coffee shops, small manufacturing companies, etc. They are a little bit risky if you don’t have knowledge about them. But here, you can also make a pretty good return.
However, before you invest in a business, I would like you to do some homework. You get a bit of knowledge about how the franchise works and try to see the competition, market trends, initial cost, etc. Just don’t jump anywhere directly without proper knowledge because no one likes to waste hard-earned money.
6. Real Estate Crowdfunding
Suppose you don’t have $100,000, or you aren’t able to buy a property because you don’t really have a ton of cash. So, in this case, you can go for real estate crowdfunding. In real estate crowdfunding, many people and you will collect money and put it into a big real estate project. It might be a fancy shopping center or something else.
There are many best platforms that can help you invest your money in crowdfunding, such as Fundraise and RealityMogul, and you can start there with just a few hundred dollars. You don’t need to have $100k dollars, or $10k.
However, make sure to do some research, such as knowing the background of the developer and see if the developer has a good track record and what they have done in the past. If you find everything is fine, you can consider investing there. And if everything goes well, you’ll be able to earn some share of profit, which is a nice income on the side.
7. Annuities
If you’re looking for guaranteed returns, then you might think of investing in annuities. And there are many types of annuities, such as fixed, variable, and indexed. You can choose any of them after researching a little bit.
- Fixed Annuities: If you are investing in fixed annuities, you’ll get a specific amount every month, which is an excellent choice if you want predictability.
- Variable Annuities: If you are investing in variable annuities, your income can grow depending on the market performance. But, another thing is that it can also slow down, so there is some risk in it.
- Indexed Annuities: The indexed one is a little bit risky but not too much because it can also give you a minimum guaranteed return whenever the market gains.
You can also consult a finance advisor before making an investment in Annuity because it might come with a lot of fine print.
Conclusion
So here I’ve covered everything regarding investing, and I explained to you where you can invest your $100k for monthly or passive income. However, it doesn’t mean you need to have $100,000 or any other specific amount.
There are many ways you can start investing with a few hundred dollars or even just a few dollars, such as investing in the stock market and buying some good stocks for the future, where you can grow your money and also earn a dividend.
Although I’ve discussed it multiple times throughout the article, I again want to remind you that please don’t put all your eggs in one basket. This means focusing on diversification. If you’re investing in the stock market, then don’t put all your money in one company. You can try different companies in different sectors, such as healthcare, tech, and utilities.
Make sure to research the company and how it has performed in the past. If you’re investing somewhere else, as discussed in the article, you still need to do some research and try to talk with people who have already invested there. How was their experience? Although talking with people is not necessary, researching the company or platform through which you’re investing is important.
How Much Can You Make in Dividends with $100K?
How much dividend you can make with $100K depends on many things, such as where you’re investing your money and how much dividend per share the company declares. And besides this, some companies give dividends one time in a year, and some give twice a year.
So overall, it totally depends on the number of stocks you own, the company that declares the dividend, and how many times the company gives the dividend. On the other hand, if you have invested in a business such as a franchise or a rental property, nobody knows how much you can make with the business because ups and downs are common there, but you can earn a set amount from rental income.
I have $100,000 cash how can I create a $5000 per month income
You can make $5,000 per month when you have $100,000 capital with the stock market by doing swing trading, but it’s not 100% secure. It’s risky.
For example, you can buy $100,000 worth of stock from different companies in different sectors, and you’ll hold it for about a month. And once you see the gain in your capital, you will sell your stocks. By the way, it’s my strategy.
However, you don’t have to sell it in one month; you can also keep it for one year. After getting 15 to 30 percent, you can sell your stocks, and after keeping the extra income that you’ve gained throughout the year, you can reinvest $100k for the next year or month.
- Invest $100k in different stocks of different companies and sectors.
- Earn 2 to 5 percent in months
- Sell stocks
- Keep that 2 to 5 percent
- Reinvest that $100k
However, it doesn’t mean you can 100% make 2% or 5% in months; companies can sometimes also go into loss. Sometimes, you can even earn more than this, but usually, they don’t grow by the same percentage.
But if you’re at a loss, you can keep your money in the company if it has a good background and you also know the company has a good future and it will come back.
Besides the stock market, there’s also another way that can help you make $5,000 a month with your $100,000 investment. You can buy any famous franchise like Dunkin, Starbucks, etc, or start a local business, such as starting your own neighborhood coffee shop. These businesses can help you make $5,000. You can also hire some employees who can work there in your franchise.
But keep in mind that businesses are risky, so there is no guarantee you can 100% make $5,000 a month when you buy a franchise or start any other business.
The Best way to invest 100k for monthly income
There are many best ways to make a monthly income from your 100K dollar investment. If you’re not afraid of taking risks, you can consider investing in the stock market, but if you want to go with a safe option, you can consider investing in a high-yield savings account.
How to invest 100k for passive income
There are many ways you can invest your 100k for passive income, such as buying stocks and earning from the dividend or buying a rental property that will generate income for you. Besides this, You can also start your own business or just buy a franchise and hire some people who will work for you (Business can be risky).
