Let’s say you’ve got $100,000 to invest due to an inheritance, financial windfall, settlement, or years of saving.
The financial landscape is pretty brutal right now after dealing with 11 Fed rate hikes and an overvalued stock market sitting just below all-time highs.
It’s getting more difficult to make easy gains whether you’re investing in stocks, cryptocurrencies, real estate, or sports cards thanks to the easy 4%+ yields from treasury bonds and high yield savings accounts.
Fear not because I’ve got a sample gameplan if you’re sitting on 100k but don’t know where to invest. Even if you don’t have 100k cash, that’s okay because I will provide asset allocation percentages for every investment I made.
How I’d Invest 100k Cash Right Today
With both the NASDAQ and S&P 500 trading just below all-time highs, I’m not interested in growth stocks right now. Valuations are high and the Buffett Indicator shows we may experience a pullback or bear market in the near future.
Total Market Cap dividend by GDP sits at 169.9, which means the US stock market is significantly overvalued. I’m not interested in owning growth or tech stocks until the Buffett Indicator ratio dips below 130.
It doesn’t help that September is historically the worst month for both stocks and cryptocurrencies.
Right now, I’m prioritizing high yield savings or fixed income investments and Bitcoin. Other than a small position in meme stocks (Bought AMC after the Taylor Swift partnership), I don’t own any stocks personally other than Tesla (TSLA) and Grayscale Bitcoin Trust (GBTC) in my kid’s UMTA accounts.
Background Info to Understand My Investment Allocations
I’m 37 with 2 kids under the age of 5.
I retired from the rat race in 2010 and have worked online as a digital nomad ever since. As a millennial with young children, I want to provide a bright future for them by investing in high CAGR assets without taking on too much risk.
Most of my net worth is allocated into meme stocks, Bitcoin, Litecoin, crowdfunded REITs, and cash. My baby boomer parents own nearly $2 million in real estate that I may inherit within the next 10 to 20 years.
Best Ways to Invest 100k in Cash
Here’s how I’d invest $100,000 cash in today’s market. This is what I did with my own money. This is not investment advice for you.
Please always DYOR before making any investment. Your investment decisions are yours alone.
High Yield Savings and/or Money Market Funds (10% of Cash Holdings)
Investing in high yield savings accounts and money market funds is my preferred way to build an emergency savings and earn interest on my short-term cash holdings.
Fidelity and Robinhood both pay 4%+ on your cash holdings with very little risk. You can try high yield savings accounts such as Ally Invest or Marcus to get similar returns as well. All of these accounts are protected by FDIC insurance up to $250,000.
You won’t get rich earning 4% on your cash but it provides peae of mind. You will sleep a little bit better at night.
Stocks (25% of Cash Holdings)
Stocks are trading at high P/E ratios that appear unsustainable at the moment. There’s also the risk of another serious COVID outbreak due to the rise in Eris cases.
It’s getting harder to find undervalued growth stocks so I sold all of them. No to mention that September is brutal for the stock market.
However, I do hold AMC shares thanks to Taylor Swift’s The Eras Movie that will appear in AMC-exclusive theatres on Octobr 13th 2023.
I’m bearish on stocks overall and bought 9/29 QQQ puts to hedge my brokerage account.
Options (5% of Cash Holdings)
I trade options to profit from news events, earnings reports, and new partnerships. Most of my options contracts are made up of AMC calls leading up to the Taylor Swift The Eras Film release.
I’m also holding QQQ puts as mentioned above. You don’t have to lose money if the stock market goes down when you hedge your stocks using put options.
Crypto (50% of Cashing Holdings)
I bought my first Bitcoin in 2019 before the pandemic and believe in HODLing BTC to provide financial security in the long run. 90% of my crypto holdings are Bitcoin while I have a small 10% position in Litecoin.
I don’t trade crypto but instead view Bitcoin as a 21st century savings account and LTC as a 21st century checking account.
Major institutions are applying for Bitcoin spot ETFs before the April 2024 Bitcoin Halving so I’m holding onto my crypto to see what happens.
My gal is to DCA into Bitcoin and hold it until 2025 when the crypto maret may peak. That’s when I will look towards buying a tiny home in cash and saving the rest.
REITs (10% of Cash Holdings)
I’m curious about investing in real estate but don’t believe in taking on a big mortgage or managing real estate privately. There are too many headaches to deal with and I avoid debt like the plague after watching my parents file for bankruptcy as a kid growing up in Washington, DC.
However, I do invest in crowdfunded REITs through Fundrise to gain exposure to the real estate market. I’m up 44% since investing in 2019 but returns have been negative so ar in 2023.
You can get started with as little as $10 and build a balanced, growth, or dividend REIT portfolio with case. The company is launching outher products such as private equity or debt backed investents to give you more investment choices.