Quora Answer: As a 31-Year-Old, Where Should I Invest $100,000?

The following is my answer to a Quora question: “I am 31 years old.  I have $100,000.  Where should in invest it?  I am debt free.”

I am assuming that you have a balanced risk profile, and an intermediate to long horizon.  This is a general strategy.  You may want to check with a professional financial adviser in your area.

I would suggest you divide the money into two portions, 60:40.  The 40% should be put into low risk, preferably debt securities, such as treasury bonds or corporate papers.  They can also be put into fixed deposits.  These investments have low liquidity, but high stability.  They serve as an anchor, and to ensure that in a major unanticipated downturn in the market, you do not lose all your money.

The other 60% is to be put into higher yield, mostly equity investments.  Their ROI must be higher than the rate of inflation, and that entails undertaking more risk.  An easy way to balance out is to set some aside for an investment-linked plan, ensuring that there is some form of coverage, and an immediate estate should anything adverse happen, impacting your future ability to earn.

Most safe investment strategies are variations of this theme with preferences in differing instruments, regions, industries or classes of securities.  However, avoid any sort of complex instrument and wraps.  Due to the extreme leveraging, it is easy to get burned badly.