How would you most profitably spend it? Would you start a business? If so, what? Would you buy stocks? Real estate?
In this scenario you have the time you need (i.e. you’re not working another day job or encumbered by other obligations), you are geographically mobile, your day-to-day living expenses are taken care of, and you don’t have other debts you need to pay off.
So how, after a few years, would you spin $100k into $150k, or $200k, or more?
Good question. I got considerably more than that last year with much more to come. What to do with it is going to be a problem. I bought a condo that was being unloaded at a serious discount and fixed it up myself. It isn’t the greatest place ever but it isn’t bad and I can live here for as long as I want saving rent or rent it out later. The rent prices in this building are several hundred dollars less a month than I paid if you spread it out over the mortgage plus condo fees. I don’t think I can lose on that deal no matter what I need to do later.
All other money goes into natural gas development funds and blue chip stocks plus some diversions into things like tax beneficial college funds for the kids. I also divert cost of living expenses so that I can max out my 401K plan at work in which my employer matches dollar for dollar and I have that invested in a plan sets me more retirement at 2035 and is heavily invested in stocks but scales back more towards bonds much later.
After a lot of research, I don’t think I can beat those. Any savings account including mutual funds and CD’s pay so little these days it isn’t even worth comparing rates or going through the trouble of opening up an account. It is like drier lint in your financial portfolio. You have to be somewhat aggressive but also smart and safe.
With the market like it is, I’ve been very careful over the past two years. Tax free municipal bonds that are rated BBB or better. A large portion has been in government instruments. They don’t return a lot, but they’re in the plus column, which is better than the other way.
You can’t expect to turn 100K to 150K or more in a few years (a few years means <5 to me) using somewhat safe investments right now. You certainly can’t end up with 200K without some serious risk. The only real way to so that is to invest almost all of it in a couple of risky stocks or a single business start up and hope its takes off but that is one of the most risky things you can do and you may end up with nothing at the end.
I have a lot more than this invested, so I’ve got experience.
The first thing you do is to evaluate your investment goals. The second thing you do is to evaluate the level of risk you are comfortable with. Your actions will be very different is you have a business opportunity you have always wanted to explore versus saving for retirement.
The third thing is to diversify. Putting some of the money down on a house might be very good, but given the low mortgage rates these days you might make more money not putting all of it down and leveraging a bit more. Muni bonds might be good depending on your tax bracket. My father only invested in them, and they returned a fortune last year, which is not usually the case. Some more aggressive investments probably make sense also.
Bottom line - the answer depends on a lot of things not mentioned in the OP.
So where to put your cash or almost-ready-to-access money? I’ve never seen a good answer for this in the past several years that beats “in a locked box, under your bed”.
I’d buy some rental real estate. I think we’ve bottomed out in pricing (though I’ve been saying that for two years now) and the rent would pay a nice dividend. I’ve also been recently looking to REITs, so I might park it there.