Read the full story – https://www.forbes.com/advisor/au/investing/how-to-invest-100k/
Jody McDonald 27 March 2023
Whether it’s from winning the lotto, an inheritance, or the profits from selling an asset—coming into a significant chunk of money creates a range of investing opportunities. But the best way to invest a large lump sum of $100,000 will depend on many factors including your current age and financial situation, and the outcomes you’re looking to achieve. Let’s look at some of your options.
What To Consider Before Investing
Before you invest it’s wise to:
- Knock-down high-interest debts. In particular, pay off credit cards where the average interest rate paid on balances is 17.92%, as it’s less likely you’ll be able to achieve returns higher than that through investing.
- Put away savings for a rainy day. Everybody needs cash to cover costs like replacing a broken fridge, or in case you suddenly lose your job. Aim for enough to cover three-to-six months of living expenses.
Keep in mind that growing your wealth through investing is not a sure thing. Every type of investment carries some risk, so it’s important that only invest money you can afford to lose.
Even ‘safe’ investments like a term deposit or Australian Government bonds that offer guaranteed interest come with risk—primarily, the risk that you’ll miss out on better returns that could be made elsewhere, or not have money available when needed.
Know why you’re investing
Financial planner, CEO of Rekab Advice, and winner of the 2023 IFA Investment Adviser of the year, Amie Baker, says when you come into money it is important to sit down and consider not just your immediate financial needs—but what you want to achieve in five, 10, 20 or even 30 years.
“When we think about our future self, as well as our now, it might be easier to work out what to do with that money when you get a windfall, like $100,000 for example,” she said.
