20 Best Ways to Invest $100K

Managing your finances can be a complex job. That is where wealth management firms or financial advisors come in. They work with clients to identify their financial objectives, craft a strategy to achieve those goals over time, and manage their wealth. Since financial goals differ by individual, these firms offer a variety of specialties and services.

Among the best things you can do before investing $100,000 is reducing debt that carries a high interest rate, such as credit card debt and debt from other loans, like payday loans. The average credit card interest rate is 16% or more, well above the average annual returns from the stock markets.

If you have debt on multiple credit cards, look into getting a balance transfer credit card. Some cards will allow you to consolidate all of your debt and may offer an introductory 0% rate that can help you accelerate paying down your debt.

An emergency, or rainy day, fund is cash set aside for emergencies, such as losing your job, having a major car or house repair expense, or any other emergency. Many Americans are not prepared for emergencies. A 2018 report by the Federal Reserve found that almost 40% of American adults would not be able to cover a $400 emergency with cash, savings, or a credit card charge that they could quickly pay off.

Whether you are a do-it-yourself investor or lean on the advice of a financial professional, before you invest, decide what kind of investor you are, including how much risk you are willing to handle. If you have a high tolerance for risk, more of your portfolio can be invested in stocks. You may be more inclined to take a flier on smaller companies. The motto of investing is high risk, high reward, but this may leave your portfolio more vulnerable.