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What to invest in when you have $1,000, $10,000, or $100,000

Sometimes the hardest part is getting started. Sometimes you've inherited a large chunk of money and need to figure out the best way to invest it. Let's explore the options for each scenario.

The $1,000 portfolio

Starting with $1,000 won't turn into life changing money unless you take the gamblers mentality. And that's not a wise decision. Everyone has to start somewhere and you're starting with a $1,000. Build good habits and keep it simple.

A target date mutual fund, such as the one Charles Schwab offers, is a great place to start. The idea behind a target date mutual fund is that you pick one with the year of retirement in mind. For example if you want to retire around 2055, you'll pick the Charles Schwab Target 2055 fund (SWYJX). The fund expenses are very low at 0.08% and the stock/bond ratio will automatically adjust as time passes so that you have the right mix of stocks and bonds. So even as you add to this investment and it turns into $10,000 or $100,000, you'll still have the right balance of risk and reward.

The $10,000 portfolio

You've got your feet wet and want to add a little spice to your life in investing. Don't touch that target date fund. Continue to add to it and build off that solid base.

But once you're over $10,000 you can start to add some ideas that you have conviction about. Maybe you want to own a little Bitcoin, maybe you want to buy some Apple or Tesla, or maybe you have a strong opinion about the next hot stock or industry. Remember, you can buy a basket of stocks in an industry as a way to invest in a growing sector. A good example is artificial intelligence. Right now, everyone wants to invest in the chipmakers that propel AI. A great way to play that is using the VanEck Semiconductor ETF (SMH). This will buy a basket of stocks in that industry.

Don't get carried away though. Do not go bonkers betting on every thought that crosses your mind. Do it in very small doses as you continue to learn what works and what doesn't. Never risk anything more than you're willing to lose entirely on these investments. Some will work out, others won't. And continue to add to that target date fund.

The $100,000 portfolio

Now it's getting serious. As always, the target date fund is a safe option that won't kill you. But now taxes will come into play as you buy and sell large chunks of stocks or funds. The decisions carry much more weight at $100,000 than they do at $10,000. This is the tipping point where many investors decide they want to start working with an advisor to help manage their portfolio, help plan their retirement or other major goals, and to help manage their taxes.

This is especially true if you inherited a large sum of money. There are major tax consequences for not handling the inheritance properly.

You can continue to manage the portfolio in a fashion that you have for the $10,000 portfolio but I want to REALLY emphasize the importance of not taking a major risk here that will blow up your portfolio. We can all recover from a $10,000 loss, but a lot of us will struggle to bounce back from a $100,000 loss - both mentally and financially.


There is no perfect universal portfolio. Every person is different, each will have a different target retirement, each will have different risk tolerances, and each will have different ideas on how they want their money invested.

The important takeaway is to establish good habits early while you are building your portfolio and then increase your risk taking in bite sized amounts that won't blow up in your face if you're wrong. And most importantly, seek help when you need it.


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