Best Way To Invest 100k

Read on to find out about the best ways to invest £100k.

Updated: January 3, 2024
Matt Crabtree

Written By

Matt Crabtree


Imagine waking up one day with an extra £100,000 in your bank/savings accounts. What would you do with that kind of money?

There are endless possibilities, but one thing is for sure: you have a significant opportunity to make your money work for you.

Investing £100k is no small decision, and it's natural to feel overwhelmed by the sheer number of investment options available. However, with the right approach, you can turn this windfall into a long-term source of financial security and even more wealth.

In this article, we'll explore the best ways to invest £100k and help you make the most of this incredible opportunity.

No matter if you're an experienced investor or a novice in the field, this guide is designed to equip you with the knowledge necessary to make well-informed choices regarding your finances.

Best Way To Invest 100k — Build a Diversified Portfolio

Diversification simply means spreading your money across various types of assets so won't be too heavily impacted by one investment going south.


So, how can you diversify with £100k? One way is to invest in mutual funds, which are managed by professionals and invest in a variety of assets across different sectors and regions.

Another option is ETFs, which are like mutual funds but are traded on stock exchanges.

Index funds are also a good choice, tracking an index like the S&P 500 or the FTSE 100. When you invest in one of these, you are essentially buying a small piece of the entire index, which can provide broad market exposure and diversification.

Aligning Your Financial Goals with Your Risk Tolerance

When selecting investments, it's imperative to consider whether your trading strategy reflects your risk tolerance.

If you're in it for the long run and are comfortable with higher levels of risk you could try stocks or equity funds. These have the potential for higher income and capital growth, but also come with higher risks.

On the other hand, if you have a shorter investment horizon and are more risk-averse, try investing in bonds or fixed-income funds, which typically have lower returns but also lower risk.

Furthermore, it's vital to consider the fees associated with each investment option. Mutual funds and ETFs often charge management fees, so it's worth comparing fees to choose funds with lower costs.

In addition, you should consider the tax implications of your investments, as different investment options have capital gains tax or income tax fees.

Invest in Real Estate

Real estate investing is one of the more lucrative ways to grow your wealth. With interest rates at historic lows and the potential for strong returns, many investors are turning to the housing market for portfolio diversification.

Specifically in your case, having £100k or more to invest can be a significant advantage when it comes to real estate investing. With a larger amount of capital to work with, investors have the potential to purchase higher-value properties or to invest in multiple properties, which can help to diversify their portfolio and spread risk.

Furthermore, it can also provide more flexibility when it comes to financing real estate investments. For example, investors may be able to obtain better mortgage rates or negotiate more favourable terms when purchasing a property with a larger down payment.

Let's look more closely at why you should consider taking real estate seriously.

Advantages of Investing in Real Estate

Real estate has many advantages as an investment asset, including:

Income Generation

One of the best things about real estate is the potential for earning rental income. By owning a rental property, you can receive a reliable and steady stream of passive income. It's a great way to make your money work for you without having to put in too much effort once the property is rented out.


Real estate generally appreciates over time, which means that the value of your investment is likely to increase over the long term.

Inflation Protection

Real estate investments have a unique advantage when it comes to protecting against inflation. As inflation rises, so do rents and property values, meaning that your real estate investment can grow in value over time.

As a result, it serves as an effective way to protect your wealth against the effects of inflation, while potentially earning a solid return on your investment.

Tax Benefits

Real estate investors receive various tax deductions such as mortgage interest, property taxes, and depreciation.

Different Ways to Invest in Real Estate

There's plenty ways to get some skin in the real estate game, such as:

Buying a Rental Property

If you're considering investing in real estate, one popular option is to buy a rental property. This allows you to earn income by renting out the property, while also building equity over time as the property increases in value.

Real Estate Investment Trust (REIT)

REITs are a type of company that owns and manages income-producing real estate. By investing in a REIT, you can benefit from the income and appreciation potential of real estate without having to manage the property yourself.

Real Estate Crowdfunding

These platforms let investors pool their money to invest in real estate projects. While this may not be something you'd need to do if you had as much capital as £100k, it can still be a good way to diversify your real estate investments and gain exposure to various properties.

Tips for Evaluating & Managing Real Estate Investments

When evaluating potential real estate investments, it's important to consider factors such as location, property condition, rental income potential, and market trends.

Here are a few tips for managing real estate investments effectively:

Set Realistic Expectations

Real estate investments require a long-term perspective. Don't expect to get rich quick; instead, focus on steady, long-term returns.

Be Prepared for Unexpected Expenses

While real estate investments can be a great way to earn income and build wealth, it's important to keep in mind that they can come with some unexpected costs. You'll need to be prepared for things like unexpected repairs, property management fees, and other expenses that may arise.

Make sure you're factoring in these costs when evaluating potential real estate investments and to have a plan in place for how you'll cover these expenses.

Consider Working with a Property Management Company

If you don't want to manage your rental property yourself, seek independent financial advice and consider working with a property management company. They can help you find tenants, handle repairs and maintenance, and collect rent.

Stay Informed about Market Trends

Keep an eye on real estate market trends, including changes in property values, vacancy rates, and rental rates. This helps you make better choices when buying and selling real estate investments.

Invest in Stocks

Stocks have been popular for decades, but it's crucial to keep in mind that even with a substantial amount of capital trading carries risks. As such, it's paramount to conduct thorough research and monitor your investments regularly to ensure you're on track to meet your financial goals.

Potential Benefits of Investing in Stocks

For starters, stocks have a history of providing higher returns than other types of investments, like government bonds or cash. Plus, if you ever need access to your money in the short term, stocks are pretty liquid — meaning you can easily buy and sell them.

But that's not all — investing in stocks can also offer the potential for dividend income in your general investment account. This is when companies pay their shareholders a regular amount of money. And not only is it some extra cash in your pocket, but it can also help to balance out any market ups and downs.

Potential Risks of Investing in Stocks

It's true that there are a ton of potential benefits to be had, but it's also important to take a closer look at the risks involved.

For instance, stocks are known for their market volatility, which can cause the value of your investment to go up and down in a relatively short period of time.

On top of that, investing in individual stocks can be risky in and of itself. There are a lot of factors that can impact the performance of a single stock, such as the company's management, competition, and market conditions. It's definitely something to keep in mind when you're making your investment decisions.

Another thing to consider is the level of knowledge and experience that investing in stocks requires. You need to be able to understand financial statements, keep up with market trends, and stay on top of economic indicators in order to make informed decisions.

If you're not feeling comfortable with that level of knowledge just yet, don't worry! You can always work with a financial advisor or use a robo-advisor to help manage risk in your savings or investment account.

It's all about finding what works best for you.

Tips for Selecting Stocks and Managing a Stock Portfolio

Here are a few tips to help you select stocks and manage your stock portfolio:

Research Individual Companies

As mentioned before, investing in individual stocks is risky. As such, it's paramount you're aware of things like financial statements, industry trends, and are researching competitors to make informed investment decisions.

Diversify Your Portfolio

It's always a good idea to reduce risk when trading. One way to do this is by considering stocks from different industries and sectors. By spreading out your investments, you ensure you aren't just dumping all your eggs in the same basket.

Keep an Eye on Market Trends

When it comes to making investment decisions, staying informed about market trends and economic indicators is crucial. Keeping track of financial news and regularly monitoring stock market performance can help you identify potential investment opportunities.

So, make it a habit to check the latest market updates and economic news to stay ahead of the game!

Monitor Your Portfolio

It's important to keep an eye on your stock portfolio to make sure it's meeting your expectations. Regularly reviewing your investments can also help you identify any underperforming stocks or areas where you may be overexposed.

By doing this, you can make more informed decisions about whether to hold onto certain stocks or sell them in favour of other investments.

So, make it a point to regularly review and rebalance your portfolio to maintain a healthy and diversified investment strategy.

Invest in Crypto

Cryptocurrency has become much more mainstream in recent years, with lots of investors hoping to make some serious money from them.

Of course, it's important to remember that there are always risks involved when it comes to investing. Cryptocurrencies in particular can be pretty volatile, and their value can fluctuate rapidly.

It's definitely not a get-rich-quick scheme, but if you're willing to do your research and stay up to date on market trends, it could massively supplement your investment portfolio and potentially achieve some significant returns.

Potential Benefits & Risks of Investing in Cryptocurrencies

One of the most significant pros is the potential for high returns.

Bitcoin, for example, has seen significant gains in recent years, with its value peaking at around £57,400/$69,000 in 2021.

Other popular cryptocurrencies, such as Ethereum and Dogecoin, have also seen significant gains in value.

Additionally, cryptocurrencies offer a level of decentralisation and privacy that traditional investments do not, which may appeal to some investors.

However, there are also significant risks associated with investing in cryptocurrencies. Because cryptocurrencies are not backed by the Financial Services Compensation Scheme (FSCS) or any government, they can be particularly volatile and subject to sudden drops in value.

They can also be vulnerable to hacking and fraud, making them a riskier investment compared to traditional stocks and bonds.

Suggestions for Investing in Cryptocurrencies

If you are still considering investing in cryptocurrencies, there are several ways to do so. One option is to purchase popular cryptocurrencies like Bitcoin or Ethereum directly. This can be done through a cryptocurrency exchange or through a digital wallet.

However, it's important to do your research and choose a reputable exchange or wallet provider to avoid potential scams.

Another option is to invest in a cryptocurrency index fund, which allows you to invest in a diversified portfolio of cryptocurrencies. This can be a good option for those interested in the crypto space but don't want to take on the risks associated with investing in individual cryptocurrencies.

Tips for Managing Your Cryptocurrency Investments

Managing your cryptocurrency investments requires careful attention to market trends and potential risks. Here are a few tips for managing your investments and evaluating potential investments:

Stay Informed

Keep up-to-date on market trends and news related to cryptocurrencies to make informed investment decisions.

Diversify Your Portfolio

Don't put all your eggs in one basket. Consider investing in a mix of different cryptocurrencies to spread out your risk.

Set Realistic Goals

Never trade an excess of what you can afford to lose, and set realistic investment goals based on your financial situation and risk tolerance.

Consider Working with a Financial Advisor

If you're new to investing or feel unsure about managing your crypto investments, consider working with a financial advisor who specialises in cryptocurrency investments.

Invest in AI

Investing in Artificial Intelligence (AI) is not just a buzzword anymore, it's an ever-growing field that presents various investment opportunities. With the potential to revolutionise several industries such as healthcare, finance, and transportation, AI is an attractive option for long-term investors.

Here are some top picks for investing in AI and what you need to know about it:

AI Investment Opportunities

When trading in this sector, you can choose to invest in companies that are already at the forefront of AI or ones with the potential to become leaders in the future.

Alternatively, you could focus on AI-based exchange-traded funds (ETFs) that provide a diversified portfolio of companies focused on AI innovation. These ETFs include companies from various sectors such as healthcare, finance, and transportation, giving you the opportunity to invest in AI without betting on a single company or industry.

Healthcare & AI

AI companies in the healthcare industry are particularly promising. By using AI to improve patient care and reduce costs, these companies are making significant strides in the medical field.

For instance, AI-powered diagnostic tools can help doctors identify diseases faster and more accurately, while AI-powered robots can assist in surgeries and other medical procedures.

Investing in these companies can be a long-term strategy with the potential for high returns.

Risks of AI Investment

While investing in AI has several advantages, it also carries risks. The potential for market volatility and ethical concerns can arise, such as perpetuating existing biases.

As such, it's crucial to be aware of these risks and take them into consideration when making investment decisions.

Invest in Yourself

When it comes to investing, the first thing that comes to mind is usually stocks, real estate, or cryptocurrencies. However, there's a less traditional, yet equally rewarding investment that often goes overlooked: investing in yourself.

Investing in yourself means putting time, effort, and resources into personal and professional development. It's a way to improve your skills, knowledge, and mindset to achieve your goals and create a fulfilling life.

And with £100k, you have a significant opportunity to invest in yourself in meaningful ways that could lead to substantial returns.

Let's discuss some suggestions on how to use your to invest in your personal and professional growth.

Ways to Invest in Yourself with £100k

Go Back to School

Going back to school can help you acquire new skills, expand your knowledge, and increase your earning potential. Consider investing in a degree, certification, or specialised training program.

Start a Business

Starting a business can be a risky investment, but it can also be rewarding. If you have a particular passion for a specific business you'd like to open, it may be worth considering when you have this much capital.

Pursue a Hobby

Hobbies can be a great way to invest in yourself. Whether it's painting, cooking, or learning a new language, hobbies can lead to personal growth and fulfilment.

Hire a Coach or Mentor

Working with a coach or mentor can help you gain perspective, set goals, and achieve them. Consider hiring a professional to help you work on specific areas of your personal or professional life.

Attend Conferences & Networking Events

These can be a great way to expand your knowledge and build your professional network. By meeting new people and learning from experts in your field, you can gain new insights and make valuable connections that can lead to career growth and higher earnings.

Learn a New Skill

Learning a new skill, such as coding, graphic design, or digital marketing, can open up new career opportunities and increase your earning potential. Have a go at a course or training program that can help you acquire new skills that are in high demand.

Investing in yourself is a left-field suggestion for some, but it can lead to personal and financial rewards that are hard to achieve through traditional investments. With £100k, you have a significant opportunity to invest in yourself and make a meaningful impact on your life.

Remember that whatever method you choose on the road to self-improvement, investing in yourself will provide a higher ROI than any fund or savings account.


To wrap things up, you don't have to be Warren Buffett to accumulate some investment gains. By considering the options outlined in this article, you can make informed decisions that will, hopefully, lead to profitable returns.

Remember, it's crucial to conduct thorough research, diversify your portfolio, and maintain a long-term outlook, regardless of whether you choose stocks, bonds, or real estate.

The key is to start investing now, rather than waiting for the “perfect” time. With patience, discipline, and a willingness to learn, anyone can achieve financial success through investing. So, don't hesitate any longer — take action and start investing for the future today!

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