How should I invest $100,000?
For long-term growth (10+ year horizon): 80% in a total US stock market index fund (VTI/VTSAX), 20% international (VXUS). For a balanced approach: 60% stocks, 30% bonds (BND), 10% international. First priority: max tax-advantaged accounts (401k, Roth IRA, HSA) before taxable brokerage.
Formula
Investment priority: Emergency Fund → 401k match → Roth IRA → HSA → Max 401k → Taxable brokerage. All in low-cost index funds.
Example
$100k to invest. $10k → emergency fund top-up. $23.5k → max 401k (pre-tax). $7k → Roth IRA (VTSAX). $4.15k → HSA (invested in stocks). $55.35k → taxable brokerage (VTI 70%, VXUS 30%).
How it works in detail
The decision tree: (1) Do you have high-interest debt? Pay it off first. (2) Emergency fund funded? No → put 3–6 months in HYSA. (3) 401k getting full match? No → contribute there first. (4) Roth IRA maxed? No → $7,000 there. (5) Now invest the rest. Account priority for $100k: maximize tax-advantaged space first ($23.5k 401k + $7k Roth + $4.15k HSA = $34.65k), then invest remainder in taxable brokerage. In taxable accounts, use tax-efficient funds (total market index, avoid bonds which generate ordinary income). Lump sum investing beats dollar-cost averaging 68% of the time historically — but DCA over 3–6 months is fine for psychological comfort.
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Should I use index funds or hire a financial advisor?
Index funds for most people. A low-cost three-fund portfolio (US stocks, international stocks, bonds) charges 0.03–0.10% in fees and has outperformed 90% of professional fund managers over 15+ years. A financial advisor (typically 1% AUM fee) is worth it only for complex situations: large inheritance, business exit, multi-state taxes, or estate planning.
What is the right asset allocation (stocks vs bonds) by age?
A common starting rule: hold your age in bonds (30 years old = 30% bonds, 70% stocks). But modern research suggests more aggressive: 110 minus your age in stocks. A 35-year-old with 30+ years to retirement should hold 75–90% stocks. Reduce to 50–60% stocks by retirement age.
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