Sun Jul 21 2024, by Tyler Gardner

How I Would Invest $100,000 of Your Money

If I were to invest $100,000 of your money, here is exactly how I would do it. I'm Tyler, a former financial advisor and portfolio manager, and I create financial content for free to help you make informed investment decisions.

1. Invest in Low-Cost Index Funds

I would invest $80,000 directly into a low-cost index fund, such as Fidelity's FXAIX. Historically, the S&P 500 has returned around 10%, or 7% adjusted for inflation. This investment could turn that $80,000 into $323,000 in just the next 20 years. That’s a quarter of a million dollar return just for having your money sit there. I'll take it!

2. Diversify the Remaining Investment

I would invest the remaining $20,000 in one of the following options: a bond fund like BND, a real estate investment trust like VNQ, or a dividend fund like SCHD. This diversification moves beyond just growth stocks and provides me with a consistent stream of income.

3. Celebrate Your Financial Independence

Finally, I would take you out for a cup of coffee to celebrate. By doing this on your own, instead of paying an investment advisor 1% of your assets, we just made you an additional $100,000 on the stocks and $8,000 on the fixed income over the next 20 years.

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