Monthly Income from 100k Investment

November 28, 2022

Covered Call Strategy

You have put in immense work to have 100k to invest and an income from it. You are thrilled with your success and need to continue the good work. But the problem is, there are many different options to invest the money. There's the stock market, real estate, cryptocurrency, and more!

Additionally, there's a problem of outstanding debt that you need to pay off. Some loans from your friends, taxable income, credit cards, and other sources have accumulated over the years. So you have to make sure that your 100k is an extra income and not money that you have to spend on debt.

To help you achieve a steady stream of passive income, we'll lay out a few tips and strategies you can use. So read ahead and get started on your journey to financial independence today!

How To Invest 100k for Passive Income: Best Ways

Before discussing how to invest your 100k effectively, it's important to understand what passive income is. Simply put, passive income is money that you earn from investments or other sources that do not require a lot of effort on your part.

Some common examples of passive income include stock dividends, interest payments from bonds and notes, real estate rental income, and intellectual property royalties

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Best Way to Invest 100k

You can use several strategies to generate passive income from your 100k investment, including investing in stocks, real estate, and cryptocurrency. Let's take a closer look at each of these options and explore the pros and cons of each.

Invest in Stock Market

Putting most of your money into the stock market is the most highly recommended strategy by many financial advisors. This is because stocks provide your investment portfolio with some of the best diversification possible.

Not only can you have exposure to practically every industry in the globe by investing in equities, but doing so has historically been shown to yield one of the highest returns on investment.

Despite the fact that the markets have not been doing very well in 2022, the average annual return on the S&P 500 since the beginning of the 1970s has been close to 12% per year.

Historically, the market has recovered with even better years after periods of economic stagnation. And, while there are no guarantees in life, history suggests that now is a good time to buy individual stocks, especially if you have a long investment horizon.

Dividend-paying stocks

Dividend-paying stocks can also be a great way to generate passive income. Many companies pay regular dividends, especially those in more stable industries such as healthcare or consumer goods.

While these dividend payments are not guaranteed, they generally hold steady even during periods of economic uncertainty and market volatility. And with just one stock purchase, you can generate a passive income that can continue for years.

Why invest in stocks?

There are other reasons why stocks are often recommended as a foundation for an investment portfolio. For example, stocks are not subject to capital gains tax, unlike other types of investments, such as bonds and real estate. This means that you can earn a higher return on investment from stocks than from other asset classes without worrying about paying taxes on your profits.

In addition, income from stocks is typically taxed at a lower rate than other forms of income, such as interest from bonds or rental income from real estate. As a result, stocks can be an especially attractive investment for high-income earners who are looking to minimize their tax bill. Finally, stocks tend to be less volatile than other asset classes, which means they may be a good choice for investors who have lower risk tolerance.

Real Estate Investment

Although it's not a cheap chunk of change,100k is not nearly enough for real estate investing. On the other hand, you might want to look into real estate crowdfunding and REITs


Investing in commercial real estate projects through crowdfunding has become a popular way to invest in large real estate developments. This method allows a large number of people (the "crowd") to pool their resources and invest in a real estate project.

The investors then become partners in the venture and are rewarded based on a variety of criteria, such as a predetermined financial amount that they are paid back as a component of a loan, or perhaps they are given a piece of the project once it has been completed and is successful.

This is an excellent way for real estate investors to earn passive income from their savings accounts, and it is also a great way to invest in an income-producing property.

Real estate investment trust

A real estate investment trust, commonly known as a REIT, is a company that owns, operates, or finances income-producing properties. Shares in a REIT can be bought and sold on major stock exchanges, and they offer investors a way to diversify their holdings beyond traditional stocks and bonds. One of the main benefits of investing in a REIT is that it provides payouts that are typically tax-free.

In addition, owning shares in a REIT can be a passive income strategy for investors who want to earn regular dividends without the hassle of managing an investment property. However, it's important to note that REITs are subject to special taxation rules, and investors may be required to pay taxes on some or all of their dividends.

Nonetheless, investing in a REIT can be a straightforward way to diversify your portfolio and generate passive income.


When investing in real estate, you should always take a buy-and-hold approach rather than trying to make quick money through flipping properties. While there's always the potential to make a lot of money quickly by flipping an investment property, it's generally not considered a good long-term strategy.

You have to pay taxes on any profits you make from flipping properties, and you also incur other costs, such as insurance, repairs, and closing costs. By contrast, if you take a buy-and-hold approach and invest in an income-producing property, such as a rental property, you can earn passive income over time without paying any taxes on your profits.

Invest in Mutual funds and exchange-traded funds (ETFs) 

Before investing in mutual funds or exchange-traded funds (ETFs), there are a few key things to understand. Both options offer the potential for diversification and professional management, but there are some key differences to be aware of.

ETFs are similar to mutual funds because they both trade on the stock market. However, ETFs typically have lower expenses than mutual funds. When investing in ETFs, you can also choose to invest in particular types of businesses, sectors, or assets. Some ETFs support particular causes, such as environmental causes.

Another key difference is that you may be subject to income tax on your dividends and capital gains with mutual fund investments. With ETFs, you are only subject to income tax on your dividends. 

On the other hand, mutual funds are a combination of different investments bundled together and divided into shares. It might be stocks, bonds or even a combination of both. These funds are also professionally managed and offer the diversification, though they typically charge higher fees than ETFs.

Investors who want to invest in individual funds but don't have the time or skills to analyze each stock individually might find mutual funds a reasonable compromise solution.

Save for your Retirement Account

Your retirement savings should be one of your top financial priorities, as it's important to plan for the years ahead. One of the best ways to save for retirement is through a retirement account such as an IRA or 401(k).

These accounts allow you to make tax-deductible contributions and grow your savings over time without paying taxes on the growth until you're ready to withdraw it. Additionally, many retirement accounts offer tax-deferred or tax-free growth, which means you can earn more money over time without worrying about paying taxes on the gains until much later in life.

Additionally, personal finance experts recommend automating your savings by automatically transferring your checking account to your savings account each month. This will ensure that you are consistently setting aside money for the future, and it can also help to prevent you from spending this money on less important things.

Create an Emergency Fund

An emergency fund is an important part of any successful financial plan. This fund can help you to stay financially secure during unexpected events, such as losing your job or experiencing a medical emergency. If you don't have an emergency fund, one option is to set up an automatic transfer from your checking account to your savings account each month.

Your emergency fund should be large enough to cover three to six months' living expenses. You may want to start with an initial goal of saving $500 and then increase this amount over time as you get more comfortable with your savings plan. To help you reach your savings goals, you may consider setting up automatic transfers and regularly tracking your progress.

Peer to Peer Lending

One potential investment option for individuals looking to earn more income is peer-to-peer lending. Peer-to-peer lending involves lending directly to borrowers through a platform rather than investing in stocks or bonds.

Investors can choose which borrowers they want to lend money to based on criteria such as credit scores and debt-to-income ratios. Here are some reasons why P2P lending is smarter than stocks or real estate investing:

1. Higher returns

P2P lending platforms often offer investors higher interest rates than many other investment options, making it a potentially attractive choice for those looking to earn more income.

2. Diversification opportunities

Investors can choose to spread their money across multiple borrowers and loan products, helping minimize the risk of any loan defaults.

3. Liquidity

Funds invested in P2P lending can typically be accessed at any time, making it easier to access your money if needed.

However, it is important to do your research to understand the risks and potential returns before investing. Additionally, there is always the risk that a borrower may default on their loan, leaving investors with less money than they originally put in.

Despite these challenges, peer-to-peer lending can be a smart way for individuals looking for higher-yield investments to diversify their portfolios.

Invest in Cryptocurrencies

One emerging investment option that many people are considering is cryptocurrencies. Cryptocurrencies, or digital currencies such as Bitcoin, Ethereum, and Litecoin, are becoming increasingly popular among investors due to their high returns and potential for growth. Crypto trading is a high-risk, high-reward investment that can be attractive for those looking to maximize their earnings.

How does it work?

Crypto trading involves buying and selling cryptocurrencies on a digital exchange or through peer-to-peer platforms. Many people choose to use automated trading software, which can help them analyze data and make more informed investment decisions.

You can also choose to invest in specific currencies or diversify your investments across various cryptocurrencies.

There are many risks involved with investing in cryptocurrencies, including price fluctuations and possible hacking attempts on the exchange platform.

In addition, crypto trading can be highly speculative and requires people to understand market trends and risk management strongly.

Invest in a Dividend Reinvestment Plan

In this investment strategy, investors purchase company shares and then reinvest their dividends into more shares. This can help individuals build wealth over time by allowing them to earn compound interest on their investments. Additionally, investors may be able to take advantage of certain tax benefits that come with holding dividend-paying stocks.

There are several factors to consider when choosing which companies to invest in for a dividend reinvestment plan. These include the company's financial health, growth prospects, and track record of paying dividends over time.

Another important consideration is the cost of setting up and administering a dividend reinvestment plan. Some companies charge investors a fee for this service, which can cut into your returns over time.

Overall, investing in a dividend reinvestment plan is a savvy investment strategy that can help you build wealth over time while minimizing some of the risks associated with investing.

Things To Do Before Starting to Invest

100k is no joke; we know you worked hard to earn it. Before starting to invest, there are a few important steps that you should take in order to ensure your financial security and protect yourself from potential risks.

Pay off high-interest debts

As we mentioned earlier, high-interest debts can be very costly and negatively impact your ability to save and invest. One of the first things you should do before investing is pay off any high-interest debt, like credit card debt or student loans. This will help free up more money in your budget that you can invest.

Likewise, it is also a good idea to build an emergency fund before starting to invest. This will help you stay prepared for unexpected financial setbacks and keep your investments safe.

Diversify your portfolio

Another important step to take before investing is to carefully diversify your portfolio across different asset classes, such as stocks, bonds, real estate, and cash. This will help protect you against market volatility and balance out the risk and potential returns of your investments.

You have to penetrate a lot into this thing, we can say. This involves a lot of study and the presence of mind to be able to understand the things that come out of this venture. You also have to know how to handle your investments as well so you won't lose it all in one go.

Determine what kind of investor you are

In addition to these factors, it is also important to consider what type of investor you are and what your financial goals are. Below are some other important considerations to make when determining what kind of investor you are:

Investment timeframe

Do you plan to invest in the short-term, medium-term, or long-term? This will help inform your investment decision and how much risk to take.

Level of investment knowledge

Do you have experience investing in the stock market or other financial products? Understanding your existing level of investment knowledge can help inform how much risk to take on as well.

Your tolerance for risk

How comfortable are you with taking risks and losing some of your hard-earned money? If you are uncomfortable with incurring potential losses, then a more conservative investment strategy may be better suited.

Plans, goals and objectives

What are your short-term and long-term plans, goals, and objectives? Determining these factors can help you prioritize your investments and ensure that they align with what is most important to you.

By considering these considerations, you can develop a customized investment strategy that works best for your financial situation and long-term goals. With careful planning, discipline, and a healthy dose of patience, you can build wealth over time while minimizing the risks associated with investing.

Decide how to manage your investments

After the investment options we gave you and the tips above, you can now decide how to manage your investments! 100k can be a big amount to invest, so make sure you research and find the most suitable investment option. It's best to hire a professional financial advisor to help you navigate your investment options and ensure that your investments align with your risk profile and time horizons.

Lyons Wealth Management can be a great resource for you as you start investing. We have years of experience working with individuals and businesses to help them achieve their financial goals through smart investment strategies. We offer a wide range of services, including portfolio management, wealth planning, and tax planning, so we can help you find the right investment options and manage your investments over time. Check our website and learn how we can manage your wealth today!

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