Turning $100k into $1 million is not hard. You just require patience and good investing strategies. You must know where you should invest the money and where it can grow effectively.
Making a million dollars from one hundred thousand dollars is not possible overnight. It’ll surely take time to make $1 million, but how much time it takes depends on the growth and the strategy you follow. In this article, I’m going to discuss the best strategies that can help you turn $100k or any other amount into a million dollars. We’ll discuss all possible ways to become a millionaire, including the risky and safest ways.
6 Best Ways to Invest $100K to Make $1 Million
So, you’ve got $100k and now thinking, “What’s the best way to turn $100k into $1 million, right?” Great! There are actually six ways that can help you become a millionaire; let’s discuss them one by one.
1. Stock Market Investments
Investing in the stock market has always been my first choice because, in it, you have to buy shares of a company and then hold them.
Now, It’s up to you which company’s shares you buy and which company you trust more, but as the company’s value increases and it earns profit, your capital will grow if you’ve invested in that company.
There are many ways to invest in the stock market, so let’s discuss them one by one.
Diversified Portfolio
You can buy shares of any company in the stock market after doing research and analysis, as there are some popular companies like Coca-Cola and Tesla. However, I’m not recommending them; it is important for you to do your own research.
Secondly, you should invest in at least fifteen or more companies from different sectors. If one company performs poorly in the future, the other companies will cover for it. It’s an old saying: Don’t put all your eggs in one basket; they might break. The same principle applies to the stock market.
If you’re thinking about investing in the stock market, you can go ahead. Just make sure to pay attention to the company, do thorough research and analysis about it, and always keep your portfolio diversified, as it’ll reduce risk.
Index Funds & ETFs
If you don’t want to get the headache of picking stocks and researching them, keeping an eye on them, whether they are performing well or not, if you don’t like all these things, then you can go with ETFs and Index funds.
These funds take money from many other investors like you to buy too many company’s stocks or bonds. That’s why ETFs and Index funds are less risky than individual stocks. Plus, there’s a fund manager who’ll manage all things regarding investment, such as which stocks they should buy and which they should sell, etc.
When you’re investing in funds, it is like you’re buying a buffet instead of a single dish, where you can taste everything.
Growth Stocks
You can also find growth stocks if you want to make $1 million in 10 years by investing 100k or any other amount. If you find the right stock, aim to find a stock that has the potential to grow in the long term.
You shouldn’t really care about the dividend. Just look for revenue growth and future earning potential. Besides this, you should also look at their year-over-year or quarter-over-quarter revenue growth.
You can also use the National Association of Securities Dealers Automatic Quotation System, commonly known as (NASDAQ), Yahoo Finance, Morningstar, or Finviz. These websites can help you pick up a good stock and see its past growth and history.
Dividend Stocks
Many companies that pay dividends don’t grow very fast, especially compared to those who aren’t paying any dividends but are currently focusing on growth.
If you want to get side income or a little bit of profit on your growth, you can invest in high-paying dividend stocks. But if your aim is just to grow your $100k into $1 million, you can still buy dividend stock and reinvest that amount, which you’ll earn on your stockholding.
According to NerdWallet, September 2024, some of the highest dividend-paying companies are Angel Oak Mortgage REIT Inc (AOMR) which is paying 11.44%; REV Group Inc (REVG), paying around 10.96% and Buckle, Inc. (BKE) at 10.89%.
By the way, these companies will keep changing over time. Moreover, your aim is to make $1 million, so just don’t directly invest in any company without knowing it. You must do your own research before making an investment. $100,000 isn’t a joke.
Also Read: Best way to invest 100k for 6 months
2. Real Estate Investment
Real Estate is another traditional method where people buy land and later sell it for a higher price. Besides this, some people also buy a piece of land, make a home or a shop, and then rent it. There are many ways you can use the property to make money.
Rental Property
Investing in a rental property might be another best choice you can make. You can buy a property that can be given on rent. It can be a shop or an apartment which you can rent. There is another famous platform called Airbnb that can help you find short-term guests who can pay a good amount of money, depending on the location and facilities you provide.
Moreover, your rental income will keep growing over time. In my opinion, it is the best option for those who want to have a risk-free passive income source. You’re getting monthly income, plus property value is also increasing by the times and inflation.
Real Estate Investment Trusts (REITs)
If you don’t want to be a landlord, then I’ve another thing for you: REITs. There are many companies that own or finance income-producing real estate. Investing in these companies is similar to investing in dividend-paying stock, but the difference is that dividend-paying stocks pay once or twice a year.
Another benefit of investing in REITs is that they’re safer than owning individual stocks, plus you don’t have to manage a property.
House Flipping
If you like DIY projects, then house flipping might be a good choice for you. In this, you’ll buy a house, fix it, such as renovating it, and then sell it for a higher price after holding it for a few times and making some improvements.
In the real estate field, buying a house and then selling it is highly beneficial but also highly risky, so you must have good knowledge about flipping houses, renovating costs, etc.
Crowdfunding
In this way, some crowdfunding companies take money from investors to work on a large real estate product. It’s quite similar to teaming up with friends or a group to buy something that is expensive, and later, you’ll all get benefits.
There are many best Crowdfunding platforms that can help you put your money into real estate, such as Kickstarter and Indiegogo (They mostly focus on product-based investments). Wefunder and Startengine are also good if you want to invest directly in startups. They’re profitable by risk, too, because startups can grow, but there’s also a higher risk as startups can fail.
Also Read: How to invest 100k for passive income
3. Starting or Investing in a Business
Putting your hard money in a business or startup might be an exciting investment; let’s explore some more options where you can invest.
Franchises
When you’re buying a franchise, it’s like investing in a business that is already proven; you won’t have to pay too much for marketing and bringing reliable customers. You can quickly test the recipe for success rather than starting a business from scratch.
Some of the best franchises where you can invest are:
- 7-Eleven – it’s a. Famous convenience store chain with a lower startup cost of around $50,000.
- Dunkin’ – It’s a fast-food option famous for its coffee and donuts.
- Subway – it’s another lower-cost option in the fast-food industry; you just need to have around $100,000 to $350,000.
McDonald’s, The UPS Store, Anytime Fitness, and Supercuts are also good choices because they’re already famous. Therefore, risk chances are lower than starting your own business, but the cost is high; even getting a MacDonald franchise can cost you up to $2.2 million.
Startups
Investing in a startup might be another good choice to invest your money in, but it can be a rollercoaster ride. Sometimes you will see a hike and Sometimes drop. Ups and downs are common, especially in a new business. It will take time to grow it.
You have the choice to start a startup by yourself, or you can also look for a startup with a great idea and a solid team. You can put your money in and multiply it by the time. But make sure to do some homework because it’s not really easy for everyone to get into a startup and take it to the next level.
Side Business
If you’re not ready to dive into a full-time business, then starting a side business can be a good choice for you. You don’t need a lot of money; you can do it with $100k or less, even $50k.
It’s kind of a side hustle; you can do anything you like, starting an online store or local service. Some other side business ideas are starting a Laundromat business, which isn’t really risky; you can open a self-service or automatic car wash; if you’re passionate about health and fitness, you can also open a boutique gym or fitness studio.
Besides this, if you’ve got real estate or a small home in a tourist-heavy area, you could start a bed and breakfast business. Moreover, if you have expertise in manufacturing small products like handmade goods, furniture, or beauty products, you can start a manufacturing business. It won’t cost more than $100k, although it depends on the size of your business, but it’ll surely help you to turn $100k into $1 million.
Equity Crowdfunding
If you can take a little bit of risk, then you can look for equity crowdfunding. There are platforms like SeedInvest or Crowdcube that can help you invest in startups and small businesses.
As I have said a couple of times, investing in a business can be a little bit risky. However, putting your money in equity crowdfunding through Seedinvest or Crowdcube is like investing in the stock market. Where you get some equity or a piece of the company, and if the company succeeds, you will get benefits, too.
Risks are involved in most businesses. However, you don’t need to be a millionaire to invest. In equity crowdfunding, you can start with a few hundred bucks.
4. Investing in Cryptocurrency
Cryptocurrency can be the Wild West of investing; many people don’t even talk about it; most prefer the stock market, but let’s discuss it too.
Bitcoin and Ethereum
One of the hypothetical questions people ask me is, what would you do if you could go back in time? My common answer is that I would have invested in bitcoins. Bitcoin is one of the biggest players in the cryptocurrency field. It is also called digital gold.
Ethereum also has tons of potential with its smart contracts. If you’re interested in cryptocurrency, you can consider investing in Bitcoin and Ethereum, but make sure to do some research.
Altcoin
Altcoin is another currency other than Bitcoin, which can also offer a huge return, but it can also be more speculative. Altcoins is a new currency, but some people say it will go up. However, I’m not very sure about it.
From my personal experience, I won’t put my money into this currency because I’m more interested in the stock market. Even if I want to invest in cryptocurrency, I would consider investing in Bitcoin. Moreover, my answer would also be the same for Bitcoin about 5 to 10 years ago. As of right now, it is for Altcoin.
And the things is that I’m not afraid of taking risks, but to me, cryptocurrencies are highly risky as compared to the stock market because in the stock market, I know the company and I know the company’s past record and also can predict a little bit of the future from my point of view. Therefore, I am more interested in the stock market than in cryptocurrencies. But if you’re interested, you can do some homework and invest in it.
Blockchain Technology Stocks
If you’re not interested in investing in cryptocurrencies, then you can consider putting your money into companies that develop blockchain technology. But wait, what are blockchain Technology Stocks?
Well! Blockchain technology stocks are shares of companies that are focusing on developing and supporting blockchain technology. Blockchain is a decentralized ledger system that records transactions across a network of computers.
It’s also known for powering cryptocurrencies like Bitcoin and Ethereum, which we’ve discussed earlier, but it’s not limited to here; blockchain technology extends far beyond just digital currencies, touching industries such as finance, supply chain, healthcare, etc.
DeFI
Have you ever heard about decentralized finance? It’s like a new kid on the block who is offering financial services without traditional banks.
Although it’s a new thing and kind of experimental, invest only if you’re interested in it. Keep in mind that it’s like cutting-edge financial technology.
In other simple words, decentralized finance is a financial ecosystem built on electronic technology that operates without intermediaries such as banks, brokers, and centralized institutions.
Another good thing about Decentralized Finance is that there is no central authority to control the DeFi platform. Besides this, anyone who has internet access can participate. And it doesn’t matter which place you belong to.
There are some famous platforms that you can use, such as Aave or Compound, which can help you lend your crypto assets to earn interest. Besides this, you can also use Uniswap or Sushiswap. They can help you do peer-to-peer trading of cryptocurrencies, and you won’t even need a centralized exchange.
However, keep in mind that it’s not as easy as it may sound. So, you have to learn a lot about it, and then you can jump into it.
Also Read: How to save your first $100k
5. Peer-to-Peer lending
When you’re trying to invest 100k to make $1 million, you can also consider putting your money into Peer-to-Peer lending. It’s a great way to help you earn high interest on your income.
Lending Platform
If you’re interested in peer-to-peer lending, then you can use platforms like LendingClub or Prosper, which will help you to lend your money to individuals and small businesses.
These platforms allow you to choose individuals and businesses. So it’s totally your choice whom you want to lend your money to. Plus, you can also set your own terms, just like a bank. But it’s a little better than a bank in one way. It’s that you’ve got more control over your money. And you can decide who can get your money.
Risk Management
Lending your money to individuals and businesses is easy, but it also comes with some risks, so you’ve to learn how to manage it. One of the ways that can decrease risk chances is that you diversify your loans with different borrowers.
This strategy will never let you lose your own $100k or any other amount at the same time.
Portfolio Diversification
Diversification is very important. Whether it’s peer-to-peer lending or investment in the stock market, you must do it. I’d highly suggest you spread your $100k across multiple loans and borrowers; it’ll surely lower the risk chances.
Returns and Reinvestment
If you’re following the right strategies, you’ll surely get a good return. However, as your main financial goal is to become a millionaire with a $100k or less investment, it’s important to reinvest the amount you’re earning into your current investment.
Either you can invest the money that you earn from peer-to-peer lending to give more loans, or you can simply put that amount in the stock market or in any other business where you can grow your money. It’s a slow process but very useful, and it can help you become a millionaire with just $100,000 or less amount.
6. Precious Metals and Commodities
Investing in precious metals and commodities is also a good choice, and it’s a traditional investment that people have been doing for many centuries. And it’s also my mother’s favorite investment type. She invested her money into buying gold and silver, mostly gold, and now it has doubled or tripled the price.
Gold and Silver
If we talk about investing in precious metals and commodities, gold and silver would be my first choice, and most people prefer it. Moreover, gold is doing great. You can see its history. And I believe it will continue to do so.
Even if the economy gets shaky, the metal won’t lose its value easily. Therefore, investing in gold and silver might be a good choice, and probably, if they can’t give you returns like stocks or any other high-return investment, they’ll be a good hedge against inflation and market volatility.
One of the best platforms that you can use to buy gold, silver, and other precious metals is Silver Gold Bull. It’s a Canadian company, but it also works in America. You can buy gold bars, silver bars, and other precious coins. They have too many options available. Depending on your investment capability, you can choose anything.
Commodities
Besides putting all your money into precious metals, although it’s safe, you still have other options. For example, you can invest your money in commodities such as oil, natural gas, and agricultural products.
Investing in commodities is also a very good way to diversify your investment portfolio. And potentially you will get more benefit from it because prices are mostly rising for these things. And I don’t think so. At any cost, we can stop, especially agricultural products. For one time, we can get rid of oil.
But not in upcoming years, it will take time; even if we get electric vehicles and most things are dependent on electricity, we may lose dependency on oil, but we won’t be self-sufficient enough to reduce our dependence on oil.
Storage and Security
So, if you have made a decision to invest in physical metals, you should think about how you’ll store them. Safety is the most important thing because you don’t want to damage your investment. You can choose any secure vault or reliable storage. Although Silver Gold Bull can also help you with that.
However, my first choice to store physical metals is home storage, then bank safe deposit, Private Vault Storage, and you can also look up Allocated and Unallocated Storage.
ETFs and Mutual Funds
If you’re ready to invest in precious metals and commodities but don’t want to deal with physical assets, then you can look up ETFs and mutual funds. They’ll help you invest in commodities and precious metals without owning the actual goods.
If you want to invest in precious metals and commodities through ETFs and Mutual Funds, you’ll need to open a broker account. You can use platforms like Fidelity, E*TRADE, or Vanguard. There are many ETFs that focus specifically on gold or a variety of commodities; for gold, you can go with SPDR Gold Shares (GLD) or iShares Gold Trust (IAU).
On the other hand, if you’re looking for broader commodity exposure, then you can try Invesco DB Commodity Index Tracking Fund (DBC), iShares S&P GSCI Commodity-Indexed Trust (GSG).
If you’re thinking of investing in commodities through mutual funds, then you can go with the BlackRock Commodity Strategies Fund (BICSX). Investing in this mutual fund means you’re investing in a variety of commodities like energy, agriculture, and metals. Besides this, the Fidelity Global Commodity Stock Fund (FFGCX) is also a good choice. It’s a mix of stocks from companies that are involved in commodities like oil, gold, and other natural resources.
Conclusion
I hope this investing guide helps you and gives you a clear picture of how to invest 100k to make $1 million. I’ve shared many investments and options to help you become a millionaire, and they all have their own risks and rewards. You can choose whichever is good for you.
You can choose any investing strategy as a beginner, such as investing in the stock market, real estate, or alternative investments like cryptocurrency or precious metals.
However, I would suggest one thing to you, and that is to make sure to diversify your portfolio. If you are investing in the stock market, make sure you are investing in multiple companies in different sectors.
Suppose you have $100,000, so you can also invest then, besides investing in stocks. You can also choose other options, such as Mutual Funds, Index Funds, Commodities, etc., to diversify your portfolio because you don’t want to lose your hard-earned money.
And always remember that building $1,000,000 is not a joke, especially if you are starting from $0 or $100,000. It will take time, so you have to stay informed and patient while your money is working for you and growing rapidly. And, trust me, it’s an amazing feeling when you see your money growing because I see it when my stocks go up.
How long does it take to grow 100k into 1 million?
How much time will it take to grow $100k into $1,000,000 depends on multiple factors, such as the rate of return on your investment. For example, if you are earning 10% return annually on your investment, it will take around 21 to 22 years to turn $100k into 1 million. On the other hand, if you are getting a 20% annual return, it will take around 14 years to grow $100k into 1 million.
Here’s an example. If you’re getting 10% annual returns, how long will it take to grow 100k into 1 million?
- To grow $100k to: 7.2 Years
- To grow $200k to $400k: Another 7.2 Years
- From $400k to $800k: another 7.2 Years
- And from $800k to $1 million: Around 2-3 years
In total, it’s about 21-22 years to grow $100k into $1 million. And if you get 20% return annually, it’ll take 14 years to grow $100k into $1 million.
However, you can also use a common formula, which is known as Rule of 72. It can calculate how long an investment will take to double or give a fixed annual rate of return.
How long does it take for 100k to double?
It also depends on annual return; suppose you’re making a 10% annual return from the stock market, which is pretty normal. So it will take around 7.2 years to double the 100k amount.
How to invest 100k to make $1 million in a year
Achieving 10x return on $100k and turning them into $1 million in just one year is very risky and hard. But it’s not completely impossible. You can go with high-risk strategies to achieve such milestones.
You can consider investing in cryptocurrency, or you can look for a startup investment or real estate flipping. These types of things are very risky, but this is the only way to help you turn $100K into $1 million. Otherwise, it’ll take time; making a million with $100k is highly risky.
How to invest 100k to make $1 million in 10 years?
If you want to grow your $100k to $1 million in 10 years, you’ll need at least 25.9% return annually, which is very high. But not impossible. You can achieve it with diversified investment. So, consider investing in the stock market, especially in growth stocks.
Real estate is another good choice. Besides this, you can look for entrepreneurship, private equity or angel investing, and index funds with leverages. However, it’s also a little bit risky. You need to get at least 25% to 30% return every year. So, I’d suggest you diversify your portfolio.
Is it possible to turn 100k into 10 million?
Yes, it is possible to turn your 100k into 10 million, but it is extremely difficult. You’d have to put your money into a highly risky investment, plus you’ll need extraordinary success to achieve 10 million dollars with just a $100k investment.
You can consider investing in high-growth stocks such as Amazon, Tesla, and Google. These are just examples. Suppose you’ve invested $100k in Amazon in 1997, so now they’d be more than 10 million dollars. Or even if you’d have invested in cryptocurrencies like Bitcoin, you would still be super rich. But these types of opportunities are rare.
So, turning $100k into $10 million is possible. But you need an extraordinary mind and super luck. Luck, especially in the stock market, if you’re investing in penny stocks.
Besides this, you’ll need good strategies and skills to start a new business. You can become a founder, such as the example of Uber AirBnB, whose investment skyrockets in value.
