Ask the Readers: How Would You Invest $100,000 Today?

by FI Fighter on December 24, 2014

in Ask the Readers

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If you’re like me and read a lot of forums (whether stocks or real estate), a common question that always comes up is, “If you had x amount of money, how would you invest it?

So, I thought this would be a great question to ask the readers of this site. Just as an arbitrary figure, suppose that you had $100,000 in readily accessible funds to invest with today. What would you do?

The most common answers I come across are typically: individual stocks (such as dividend growth stocks), index funds, single family homes, multi-family homes, or commercial real estate.

But perhaps your outlook for 2015 and beyond isn’t so bullish… In that case, would you stash the cash and wait for a substantial market pullback? Invest only half the funds? Or, as an even more defensive play, shelter the capital in gold/silver? Are bitcoins still en vogue?

What about peer-to-peer lending? Or would you, instead, be the bank and act as a hard money lender? Start your own business?

So many options… And what would your underlying goal be with the $100k? Build passive/semi-passive income? Bet on future appreciation? Or, find a safe haven and wait for better opportunities to present themselves in the future?

I would love to hear your own thoughts and strategies for 2015 and beyond! I’m still working through my own plan, and will share with everyone when I release the 2015 Goals post!

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{ 36 comments… read them below or add one }

1 LukeNo Gravatar December 24, 2014 at 11:10 am

Hmmm….I would probably pay down the loans on my rental properties. But I noticed that option wasn’t on your list 😉 [I’m assuming you’re talking about what to do with the proceeds from a cash-out refi on a rental property.]

In all seriousness, if you don’t have a ready purpose for it, I’d question whether you should be investing it, given that you can get a guaranteed ~4% by paying down debt (or by not borrowing the equity in the first place!).

The best argument I can see for a cash-out refi in your situation is because it will be more difficult to qualify for a loan once you retire. Two other benefits – 1) it makes it easier to pounce when you DO see an opportunity, and 2) it locks you in at a rate that may not be available in a few years. That said, being liquid is going to cost you ~4% per year, maybe a little less when you factor tax deductibility in, so unless I had something that I was confident would make me more than 4%, I’d skip the loan.


2 FI FighterNo Gravatar December 24, 2014 at 11:47 am


It was meant to be a generic question… but now that you mention it, it does seem to coincidentally apply to my cash out refi, doesn’t it? LOL

Yup, that’s exactly the reason I opted to try and get the loan — I won’t be able to later! As they always say, cash is king… Even if I just park it aside and lose 4% every year, there is a lot of comfort in knowing you have a strong cash position… I would imagine especially so if one is no longer employed…

I’m in no rush to utilize the funds… Rental Property SH #3 may fall through, and even if it does, I will be glad to have the funds in hand.

Paying down loans is also a great idea! 🙂



3 Even StevenNo Gravatar December 24, 2014 at 11:33 am

Been thinking about something similar in the new year. I have started to ask myself can I ever have enough emergency fund built up? Let’s say I’m comfortable with 6 months, what about an opportunity fund, something that sits there waiting for that foreclosure, bear market, etc.


4 FI FighterNo Gravatar December 24, 2014 at 11:46 am

Even Steven,

Great point! When opportunities present themselves, it’s important to have cash ready so that we can pounce on them… The best deals do not sit idle for very long at all!

A part of me is thinking to invest some funds into low beta stocks that pay dividends… Maybe I won’t get 4% yield, or whatever the loan amount ends up being, but it would be nice to be able to offset most of it and have cash ready for the next round. I don’t need to beat an index, such as the S&P 500, as preservation of capital will be more important.

I hear you… I struggle with the emergency fund problem as well. I don’t know for certain, but I’m planning for $100k+ before I start early FI… I hope I’m not insane and underestimating things…

All the best!


5 Steve AdcockNo Gravatar December 24, 2014 at 12:38 pm

Nothing special here – I’d put the entire thing in my brokerage account that I have with Vanguard, which is divided up between several varieties of funds, and simply watch it grow. Nothing complicated over here. It would become part of the funds that I will use to live off of once I retire by 40.


6 FI FighterNo Gravatar December 28, 2014 at 9:01 am


I’m also a huge fan of Vanguard and may very well just dump half the funds into index funds.

Over the long term, the market alone should beat 4% annual return…

Best wishes!


7 LeighNo Gravatar December 24, 2014 at 3:27 pm

I would hands down make a $100,000 payment on my mortgage, bringing the balance down to ~$47,000, meaning I could pay off my mortgage in entirety by May/June 2015. That would be pretty amazing. That would then allow me to invest 80% of my monthly paychecks going forward or about $6-7k/month, which would be about 3x monthly expenses invested per month. Looking forward to that day!


8 FI FighterNo Gravatar December 28, 2014 at 9:05 am


I like your strategy and once your mortgage is paid off, you will have a ton of capital to invest with each additional paycheck immediately following. You’ll get there in no time at your current pace! 🙂

I guess for myself, I need to find a way to generate strong cash flow with the funds, since my plan is to check out of corporate very soon… If I were to pay down my rentals by $100k, I doubt it would generate the type of cash flow, or long term returns that I’m after… The mortgages are all about 5% or under, so paying them down wouldn’t help cash flow as much as finding deals that could generate 15%+ cash on cash returns… which are still out there…

Also, a part of me would rather just hold onto the fund since cash is king… especially if another downturn happens.



9 TonNo Gravatar December 24, 2014 at 3:37 pm

Investing in derivative products like equity options and futures would improve your ROC dramatically.


10 FI FighterNo Gravatar December 28, 2014 at 9:12 am


Interesting, I have no experience in those spaces, but would like to learn more. What type of returns are you seeing?



11 Mr. Captain CashNo Gravatar December 24, 2014 at 7:33 pm

Nothing new here. I would put the entire $100,000 into my diverse index fund portfolio and be forever grateful that I am now a couple years closer to achieving financial independence at the age of 26 instead of 28. One thing I would not do is in any way, shape, or form attempt to time the markets.


12 FI FighterNo Gravatar December 28, 2014 at 9:14 am

Mr. Captain Cash,

Love it! Index funds are a great way to go, and nothing beats it for convenience and passivity. I’ll probably shuttle a portion of the funds there.

Take care!


13 JamesNo Gravatar December 24, 2014 at 8:24 pm

Hmm..actually, my father passed away a year ago, and I got his insurance money for 100k. After I had got that money, I tried to find a rental property in Las Vegas. It took me 4 months to get the first deal and 3 weeks to closed an escrow because I underestimated the market there(low ball offer). In 2011, the house price was super super super cheap(30k+15k for rehab), but now it has gone up100% in 2014(I just bought it for 73k+4k for rehab for the a little bit higher rent). I’m not sure if I should happy since all of the my family’s property appreciate 100% or sad since the property over there no longer give good cash flow anymore.


14 FI FighterNo Gravatar December 28, 2014 at 9:17 am


Yeah, I hear you… Many markets that were once affordable are pricey again today… In the Bay Area, properties have all caught up or surpassed their previous all time highs set in 2006-2007.

I heard Vegas was a great market and lots of folks benefited by investing there during the downturn… I’ve heard from a few people that they are now cashing out of Vegas…

All the best!


15 FerdiSNo Gravatar December 25, 2014 at 12:15 am

Personally, I would invest $50,000 where it can earn 8% without too much risk. That would just about counterbalance the $100k loan at 4%. I would keep $25k for emergencies and/or opportunities and “speculate” with the rest, selling put options on dividend growth stocks that I wouldn’t mind owning outright.


16 FI FighterNo Gravatar December 28, 2014 at 9:19 am


To earn 8% without much risk, my first guess would be a Vanguard index fund to track the U.S. market… Either S&P 500, or a broader index.

I like how you divy’d up the funds… I may elect to do exactly that! 🙂



17 DividendsForDummiesNo Gravatar December 25, 2014 at 12:41 am

Would probably put 70k into portfolio, and 30k into a new car. Yes cars do quickly depreciate in value but hey, putting ALL your money into savings is no way to go through life. You gotta do things for yourself too.


18 FI FighterNo Gravatar December 28, 2014 at 9:23 am


Yup, there’s more to life than just saving and investing! I can’t say I would drop $30k on a car, but if you’re saving 70% of the funds, who can blame you?

Take care!


19 Kathy @ RentalRealitiesNo Gravatar December 26, 2014 at 7:01 am

I’d use $100k as the down payments for two more duplexes, and then whatever is left would help knock down that mortgage I’ve been chipping away at. Our “master plan” includes a minimum of 5 properties, so this would top us off!

I know my husband is concerned that mortgage interest rates will eventually rise, so this would probably get prioritized ahead of some other things.


20 FI FighterNo Gravatar December 31, 2014 at 7:39 am


I like the way you think. $100k put to good use in a cash flowing market can yield some good cash flow.

Good point about mortgage rates rising, which may happen sometime in 2015. Let’s lock up as many deals as we can before they do go up!



21 Rat Race QuitterNo Gravatar December 26, 2014 at 11:43 am

I’d probably drop 40% in the Vanguard 500, 25% in single-family rental real estate and, 10% in dividend stocks, 5% in Peer-to-Peer lending hold the rest in a “high yield” CD until Title 3 of the JOBS act actually gets passed this year (if ever!).


22 FI FighterNo Gravatar December 31, 2014 at 7:40 am

Rat Race Quitter,

That’s a great way to divide up the assets and I like the plan! I might have to use it as a blueprint! 🙂



23 JamesNo Gravatar December 26, 2014 at 1:31 pm

I’d start by paying off my high interest student loan (about $25k).

I’d probably drop the remainder on down payments 2 leveraged turnkey properties out-of-state. This would enable me to focus my day job cash on stocks rather than splitting my focus like I will in 2015.


24 FI FighterNo Gravatar December 31, 2014 at 7:44 am


Sounds good! $25k isn’t too daunting, so hopefully you can wipe that out very soon.

Last year, I went with that very plan and put capital into acquiring 3 turnkey rentals. So far, the cash flow has helped quite a bit.

I would also like to get back into stocks once I’m done with the real estate… easily said than done!



25 JPNo Gravatar December 26, 2014 at 6:56 pm

I’m sure you have tapped into mr money mustache’s blog every time and again. He might say pay down all springy debt, ie. Credit card and equity debt, debt that gives you a buffer as you pay it down. In the Boston area, I can take 100k and buy a multi family for 400k that can profit $1500/month, but I know that the Bay Area doesn’t allow for that. I am about to close on prop #3 for a total profit of $4500/month from real estate. I was lucky to be born in an area with so many “up and coming” neighborhoods that I can invest in and bet on.

Our mini retirements this year include Charleston, SC, key west and Italy for 2 weeks. No sense in waiting until 65 to travel and have fun.


26 FI FighterNo Gravatar December 31, 2014 at 7:51 am


Those type of returns you are seeing in Boston are incredible. I would love to learn more if you wouldn’t mind sharing. What areas are these properties located in?

Agreed, gotta have fun today as well! Like you I was in Italy and Key West. I hear Charleston is a great place as well.

All the best!


27 JPNo Gravatar January 1, 2015 at 2:44 pm

Hey Fi fighter, thanks for the response. I’ll try to elaborate without boring you. I bought my first place, a 2 family in Somerville(bordering Cambridge and Boston) for 550k in 2012 using an FHA loan. It’s an area called union square that is absolutely exploding right now, partially because a T stop is going to be built in 2017 with access to Boston in 10 minutes. It is now valued at around 850k. When I got it appraised in May of 2013 for 750k, I refiinanced out of the FHA into a conventional and took out a small HELOC of 50k. Right now we have the 5 bed unit rented under market value for $3400 and the 2 bed unit for $2000. Our expenses are $3400/ month. Profit = 2k

I knew using another FHA loan would be tough but we made it happen. I bought a 4 family in Everett, a blue collar city bordering Boston that had the chance of winning a bid for a “Wynn” casino. I bought it for 550k earlier this year with 3.5% down. The casino is confirmed and with expenses of $3800 and under market rent of $5000/month I’m profitable $1200/month.

After taking out another HELOC on property 1, I had 100k to work with. East Boston is an up and coming area that is getting strong rents. I am about to close on a 2 family for 320k with monthly expenses of $1700 and rents of $3000 between the 2 units.

Although I have good profits, I am still over leveraged and will take the next year to pay down all cc, car and HELOC debt.

My monthly profit now totals $4500 from real estate. I also own 2 gyms where I take a salary and profits. Other areas in and around Boston that can get you strong cash flow and appreciation are Roslindale, Dorchester, parts of Roxbury, Malden, Medford, Chelsea and Waltham. I don’t know what I would do if I lived in your area, probably out of state investing like you have done.

Let me know if you have any follow up questions on the hot Boston market. Happy new year!


28 FI FighterNo Gravatar January 1, 2015 at 2:57 pm


You are a ROCKSTAR! Those rents are extremely good for the purchase price… I always pictured Boston as not being cash flow friendly, kind of like out here in the Bay Area, but you are definitely proving otherwise.

Congrats on all the success, you are doing extremely well with real estate! 🙂

Yes, I would love to learn more. Please shoot me an email if you can.

Happy New Year!


29 Mr. FrugalwoodsNo Gravatar January 5, 2015 at 4:40 am

Congrats on the killer deals! We too bought in the magic time of 2012… just down the road in Inman Square in Cambridge. Made out like bandits! 🙂

Shoot me an email if you’d like to get together sometime. Mrs. FW and I always like meeting FI-inspired locals! Email is frugalwoodsblog @ gmail . com.


30 No Nonsense LandlordNo Gravatar December 26, 2014 at 7:29 pm

A HELOC might have been a better option.

Just park it in an ETF, $10K a month for 10 months. Or a Federal government bond fund, that is inflation protected.

Or put it in an offshore safe deposit box, and declare bankruptcy…


31 FI FighterNo Gravatar December 31, 2014 at 7:56 am


HELOCs are great options as well… Maybe I just haven’t been lucky, but not many lenders around here want to give them out to investors… A cash out refi isn’t easy either, but the lenders I’ve talked to seem more willing to do those on investment rentals.



32 MartinNo Gravatar December 27, 2014 at 10:33 am

I would definitely invest it, or actually trade with it. I trade options and with 100k dollars I could make a significant stream of income and maybe become a semi-retired. But if I were a beginning investor without knowing what I know today, I would invest it into dividend growth stocks. Pick maybe 20 good stocks and start slowly allocating it until fully invested. In the meantime I would be learning how to get more out of investing/trading.


33 DoneByFortyNo Gravatar December 29, 2014 at 7:10 am

I’d lump sum invest the entire amount into my asset allocation, whatever that happens to be. (With the added benefit that you can rebalance via a large buy.)

Waiting for a market downturn seems like folly to me. None of us really knows where the market’s going in the next year…we all know the general pattern is up and to the right. So the best time to buy is yesterday, and the second best time is today. 😉


34 FIHopefulNo Gravatar December 30, 2014 at 10:50 am

The first question to ask, of course, are what are the goals (FI, debt reduction, etc.), but assuming that we’re talking about someone with an already diversified portfolio of income-generating assets and you’re not worried about generating marginal extra income, I’d park it into a semi-liquid investment (intermediate term muni-bonds, maybe for tax preferential treatment of any income).

One thing I constantly hear is to have cash (or semi-liquid investments) available for potential opportunities. I’ve always liked to keep myself close to 100% invested and it has led to a lack of cash when unexpected buying opportunities come up (e.g., wouldn’t it have been great to be sitting on $100K in cash in 2009?).


35 ElroyNo Gravatar December 30, 2014 at 10:58 am

New kitchen for the wife and that detached workshop I’ve been wanting. Done.


36 JacqNo Gravatar December 11, 2016 at 4:08 pm

Did you consider a CD ladder? When I looked at CDs a few years ago it wasn’t worth it to get in for less than 10k (which I did not have, more like 1). The ladder is investing in different time (3 year, 5 year, 10 year) which gives access to some money sooner while letting other part of the funds earn more, it’s just not as liquid.
Aside from index funds or dividend stocks, since it sounded like you wanted it somewhat liquid.


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