Storing 100,000 dollars without doing anything, will you really get poorer and poorer? The "most profitable investment method" that small investors must understand

End of the year—do you also have this feeling—money is becoming less and less valuable? Egg prices have risen by 50%, mortgage rates have soared from 1.3% to 2.2%, and even lunch boxes now start at 30 yuan. The 100,000 in your bank account, if just left there, evaporates each year in inflation.

So the question is: what is the most profitable way to invest 100,000?

There’s no absolute answer, but the logic is simple—the core variables of investment are “mindset, project, and time”—different people should choose different strategies.

First, clarify what you lack

Many people start by asking “what to buy that will go up,” but actually, you should first ask “what do I lack.”

Step 1: Treat yourself as a company. Keeping accounts isn’t just about saving money; it’s about calculating “steady cash flow.” You need to figure out how much spare money you can allocate monthly for investment—that’s your real principal. If the market drops and you need to use the money, you’ll be forced to sell at a loss—that’s the biggest killer of asset growth.

Step 2: Define your investment goal.

• If you have fixed monthly expenses (phone bills, insurance), then dividend-paying funds are suitable.
• If you want to save for travel or a new phone, you might need a 30~40% return rate.
• If your mindset is long-term retirement, compound interest is more important than short-term gains.

In short, it’s about “finding income for expenses.” With motivation, you can identify the right investment targets.

Three types of small investors, three best strategies

Stable job: dividend funds + patience

Your advantage is stable cash flow; your disadvantage is limited time and inability to trade frequently. The best choice is dividend funds or high-yield ETFs—let your investments generate passive income automatically.

Some funds have dividend yields of 7~8%, meaning 100,000 yields 7~8 thousand annually, about 600~700 per month. Over time, as long as you hold long enough, these dividends can even surpass your salary—effectively creating a monthly pension for yourself.

The benefit of this approach is quick returns and easy persistence, especially suitable for conservative investors who want to “see results.”

High-income earners: index ETFs + compound interest

If your monthly salary is high (doctors, engineers, etc.), you don’t need to rush to cash out from investments. The most suitable are index ETFs tracking the market—like the US’s SPY (tracking S&P 500) or Taiwan’s 0050.

Why? Because these indices automatically “weed out the weak and keep the strong.” The top companies from ten years ago (General Electric, Ford) have been replaced by Microsoft, Apple. Index ETFs are always loyal only to the strongest.

The S&P 500’s average return over the past 100 years is 8~10%. To illustrate: 100 yuan, with 10% annual compound interest, becomes 236 yuan after 10 years; with only 5% fixed deposit, it’s 155 yuan. Just this 1% difference results in 81 yuan more after 10 years (81% of the initial principal).

But what’s the cost? You must withstand market crashes. The dot-com bubble in 2000, the 2008 financial crisis, COVID-19 in 2020, inflation in 2022—each time, the market dips, but always recovers and hits new highs. If you need to access the money midway, you’ll have to sell at a loss. So this method is only suitable for those with “sufficient principal and risk tolerance.”

Another approach is real estate investment with leverage. A 10 million house that appreciates to 12 million in 5 years seems to earn only 20%. But if you only paid 2 million as a down payment, and the remaining loan only pays interest (say 200,000 per year), then over 5 years, interest costs total 1 million, netting you 1 million profit—yielding a 50% return.

The key point: As long as you believe the asset will rise, moderate leverage is correct. And when you’re young with less principal, the opportunity cost of failure is low.

Time-rich students and salespeople: short-term themes + quick turnover

This group lacks not time, but initial capital. So they should pursue “speculation” rather than “investment”—accumulating principal through rapid turnover.

The key is to catch news and trends. For example, the US rate hike cycle is nearing its peak, and future cuts or QE are inevitable. The dollar supply will increase, so shorting the dollar after the last rate hike has a high success rate. Similarly, the stock market periodically has “hot themes”—AI concept stocks, outbound travel stocks—by grasping news sentiment and predicting major fund flows, you can follow the trend.

The profit here comes from market over-optimism or over-pessimism reactions, so constant monitoring and current events research are necessary. The advantage is shorter cycles (from years to months, weeks, or even days), small principal but quick accumulation.

Five major assets comparison: who makes the most money?

1. Gold: inflation hedge

Gained 53% over 10 years, average 4.4% per year. Gold itself doesn’t pay dividends; it relies on price appreciation. Its real value lies in “hedging against inflation”—especially during economic instability or market volatility. The gains in 2019~2020 and 2023~2024 correspond to major events like pandemics, rate cuts, wars.

Suitable for: Conservative investors seeking risk hedging

2. Bitcoin: high volatility, high returns

Over the past 10 years, from a few dollars to its current high point, it’s an explosive return. But each rally has different reasons—exchange failures, geopolitical issues, dollar replacement effects—that can’t be replicated.

Currently, Bitcoin’s bullish factors include “halving,” “spot ETF listing,” and “political factors.” Short-term, there’s room for speculation. But long-term, don’t expect it to rise 170 times again. Day trading is possible, but don’t allocate too much of your total assets, due to huge volatility.

Real-time quote: Bitcoin price $86.99K, 24h change +0.07%

Suitable for: High risk tolerance, long-term speculative investors

3. 0056 (Taiwan high-yield ETF): stable dividend machine

Over the past 10 years, 60% dividend payout, 40% stock price increase, total return about 100%. The strategy is to pursue “high dividends.” Taiwan’s long-term dividend yield is about 4%, so the estimated return over the next 10 years is similar—doubling assets, with 60% paid out as dividends.

Invest 100,000, after 10 years, principal grows by 40,000, with annual dividends of 6,000. If you keep investing 100,000 each year, after 25 years, annual dividends will reach over 220,000—creating a retirement income. And this is under the scenario of “dividends spent,” so actual compound interest would be even stronger.

Suitable for: Conservative workers seeking stable cash flow and peace of mind

4. SPY (US S&P 500 ETF): king of compound interest

Tracks the top 500 US companies. Dividend yield only 1.6% (1.1% after tax), but main returns come from asset appreciation. Over the past 10 years, from 201 to 434, a 116% return.

Power of compound interest: 100,000 yuan, with 8% annual return, becomes 216,000 after 10 years. Over 30 years, with just 3 million principal, it grows to 12.23 million.

Almost zero risk—as long as the dollar remains the global settlement currency, the US won’t go bankrupt, and assets will grow. The downside is no cash flow along the way; it relies solely on asset appreciation.

Suitable for: Stable income earners, no need for cash flow, long-term investors willing to wait 30 years

5. Berkshire Hathaway (Warren Buffett’s flagship): replicable arbitrage machine

The company owned by the stock king, with extremely clever profit methods—accumulating cash through insurance companies, then using low-interest loans for arbitrage. For example, issuing bonds in Japan at 0.5% interest to buy stocks (dividend yield much higher than 0.5%), or issuing 30-year savings insurance in the US to buy US Treasuries (profit from interest rate spreads).

The key is: this logic won’t change even if Buffett passes away. The company’s strategy has always been to continuously replicate this arbitrage. If you want your returns to compound, BRK is a very good choice.

Suitable for: Investors seeking stable compound growth and long-term holding

Final choice

Investing in these assets doesn’t require a large principal—regular investments of just a few thousand TWD can start. The real scarce resources are “time” and “patience.”

As long as you have clear investment thinking, choose the right projects for yourself, and are willing to let compound interest work over time, your goal of becoming a small wealthy person is within reach. The key isn’t “what to invest in that makes the most money,” but “choosing the right approach for yourself and sticking to it.”

Many trading platforms now offer low-threshold entry—like US stocks, indices, precious metals, cryptocurrencies—zero commissions, low spreads—making institutional-level trading accessible to small investors. The most important thing is to start taking action, not waiting forever for the “perfect timing.”