So I was a little bit idealistic when I thought I would meet someone on the short term and be able to use the money I have towards a wedding, RESPs, or even *gasp* another down payment towards another place.  The search for Mr. Right isn’t going as well as I had hoped, and now I am contemplating that I need to be doing something with my money instead of just letting it sit there in my high interest savings account.

There are a few options that I have been considering, and I may take a balanced approach in the end.  I thought you might be interested in hearing my thought process as to what I should be doing with the $100,000 I have lying around (other than spend it eating oysters, drinking mimosas, and going for brunches all the time).

Related: Choosing the Latest Investing Fad

Moneysense did a great series on what to do with the first $1000 and $100,000 now, you have available and some of the options were entertaining.  One of the suggestions was to invest in a franchise.  While I wouldn’t want to invest my money into a franchise at this point (that would suck up way too much of my time and energy that I already have so little of), it was an interesting consideration.

What to do with $100,000?
My goals for investing this $100,000 would be to protect my capital and opt for growth that is more than what I am getting in the high interest savings account, while reducing taxes owed on the income generated, if possible.  I am a bit wary of the Canadian equity market at present because everything seems overvalued at present.

The Options…

Invest in ETFs

Since I would have a higher capital investment, investing in exchange traded funds would make sense.  I should be able to set a stop loss on my exchange traded fund purchases and be able to rebalance on a regular basis.  Setting the stop loss should protect my principle investment from a huge market crash, while I would still be able to enjoy monthly or quarterly gains from the dividends produced within the exchange traded fund.  I would most likely opt for a model portfolio recommended by the Canadian Couch Potato with a heavier emphasis on United States and International equity.  I would try and keep most of the United States and International holdings within my RRSP.  I have about $10,000 of RRSP room that I have yet to contribute thanks to the emptiness created when I took money out from the Home Buyer’s Plan.

Related: Read our book on ETF Investing

Smith Maneuvre

This is risky and probably a poor choice with the pending rising interest rates, but it would provide a great tax happy option.  I should be able to deduct the interest income from my home equity line of credit (I have about $25,000 in my home equity line of credit) in order to offset my taxes.  I most likely would not opt for this idea because I am too risk averse. The Passive Income Earner has a great post on how to see if the Smith Maneuvre will work for you.

Invest in U.S. Real Estate

Another fun idea that has come and gone from my idea bank is to invest in some U.S. real estate, somewhere where I can manage it more easily without having to fly anywhere (Arizona and Palm Springs properties are out, then!).  I was thinking somewhere close, like Seattle or Tacoma.  I would opt for something that is cash flow positive so that I am not completely considering recovery from the market or speculating.  I have a friend who is doing this and bought a 2 bedroom house in the Tacoma area for $70,000 and is renting it for $900 per month.  I do not know enough about the tax implications of rental income in the United States and the capital gains tax once the property is sold so I would need to research this before considering this further.

The Decision…

So after hashing out my thought process, still no decision haha!  I am leaning towards the ETF option but very tempted by the U.S. real estate option.  Perhaps I need a professional at this point and the do-it-yourself thing is a bit too risky for this large amount.  I would only opt for a fee-only financial advisor, but even then I would prefer to have it done for free haha (I am so cheap!).

Readers, what would you do if you were in my shoes?

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