My friend has 100,000 in the bank savings account.






 

he should talk to a fee-based professional, or spend some time educating himself.  The last place I would look for advice is on an internet forum--even this one . . . My $0.02, FWIW.  YMMV.

Not enough details on what her objectives are to give you ideas.  I suppose if she has no idea and you have no idea then just stick it in a target date fund and call it a day.  It'll work out better than bank savings one way or another.

Need more details. It is possible that 100k is only enough for her emergency fund, and in such a case, she should probably keep it in the bank. If she has alternate sourcing for emergency funds or her expenses are lower, I would consider some short term stuff. I personally would not consider putting 100k in the stock market all at once right now. I would consider implementing a dollar cost averaging plan to get that money into the market, something like a 1-2k per month over the next few years, which would lower the risk of dumping 100k into the market right before a bear market.

I assume the friend is debt free. If not I would use it to pay off debt.

After that is covered you want an emergency fund. The amount of this varies depending on your lifestyle and expenses but you want enough money that you can quickly get your hands on to cover you when shit happens. I like to keep enough on hand where if I was out of work for six months it would cover me.

After that I like to max out tax advantaged accounts. You said the friend has an IRA so maybe this is done.

All that I can think of after that is mutual funds or real estate. In my neck of the woods 100k would buy a decent house that you could rent for $1,000 a month.

Whatever you do aside from an emergency fund I would not leave a lot of cash in a bank. You are guaranteed to lose. Inflation is probably running close to 5% and banks are paying less than 1%.

Call USAA Financial Advice Center and they will help for free.  1-800-531-8111

IDK, in a recent thread looking at historical prices over the last couple years Machine Guns seem a relatively safe investment with pretty darn good returns.

Hedge fund would be a good way to go.  Obviously you need a manager who can perform, preferably one coming off a drawdown.  Lot of research needed to pick the right one.  I would go managed futures over stocks.  A good trend-following futures fund will positively kill the S&P.  Personally though I wouldn't give my money to someone else; I do my own trading.  But that's a steep learning curve--believe me.  Real estate is good, but not renting.  Too many landlord horror stories.  I'd just buy land.  Maybe some good farmland or something with the potential for development.

I think the correct question would be, what is her end goal with the 100k, slow and steady return like a treasury bond ? fluctuating returns with mutual funds in various sectors ? lock it up in a CD for a specified amount ?

water rights.  It's the new gold.

Stop asking people on the internet and call a licensed advisor at USAA as already mentioned. They don't work on commissions and they don't recommend funds with sales loads.

i have always been extremely skeptical of USAA. They act like they are a non-profit for soldiers but they definitely are a big for-profit bank. They just have a cheesy pro-soldier marketing campaign they spend millions to create. Nothing is free.

1. pay off debt.
2. emergency fund.
3. retirement investment of some kind. There are lots of good books on this. before spending 100k in investments its worth spending a few weeks reading 3 or 4 books to learn the basics (and read different approaches and then shop for a broker.

As a prior 8.5 year employee there as a financial advisor, and later as an instructor to financial advisors at USAA I can assure you the "marketing campaign" you are speaking of is the reality of how the business is run.  From the first day a new employee walks in the door they are saturated with the military culture so that the employees actually get a very intense appreciation of what it means to serve in the United States military.  In addition to the initial training, the corporate culture of military awareness and doing the right thing for the member is something that all employees are exposed to NONSTOP.  Seriously, they constantly being told to do the right thing for the member no matter what.  Those that do not buy into that culture are not employed there for any significant length of time.





I can tell you from experience as a financial advisor there, the generic advice you have mentioned above is the model that is followed when giving advice to members.  When I was there it was also very common to spend 30-60 minutes on the phone talking to members and advising them as to the best course of action based on the situation and the end result was for them to not invest at all.  Every situation is different and the advisors are trained to pick up on that and ensure that the right advice is given to the member because the members are the priority.





Although I resigned in 2012 so that I could attend law school, the experience I had at USAA is not something I will ever forget, nor will by business ever go somewhere else.  I have seen it all while working there and I have heard stories from members that they would never tell other companies (or even their friends or family), but the way members trust USAA is something that is so different than anything else that USAA is smart enough to know not to breach that trust, and in every case I saw or was involved with I can confidently say that the right thing was always done for the member.
 

I am glad to hear they are genuinely looking out for the service member.

Good LORD....!!!!
REALLY??? A hedge fund "would be a good way to go" ???

The poster came on here and asked what to do w $100k...this is clearly a question that a beginner would ask..  
And just the very fact that he's asking people on a gun forum about investing, indicates that there is  ZERO experience, and probably little to no knowledge.
NOT one thing you mentioned is "the way to go" for someone that has such a limited amount of money, and most likely no investment experience.
Hell--If  I told someone what you just did, and was somehow able to  convince an investor like the OP was talking about to put their money into these things--even if it got through compliance (I doubt it would) -- I'd fully expect the Feds to yank my license,and slap a huge fine on me.  

Hedge funds and Managed Futures are totally and completely inappropriate for this person, as they are for most typical investors

***sorry, too many words for one post, so I had to cut it and make second post below, to finish the thought.**

A damn hedge fund is one of the most complicated investments available--not to mention expensive.  
Secondary to that-- unless his friend has a whole lot more money somewhere else--she doesnt even qualify to invest in Hedges or Futures.
Ever heard the term "Qualified Investor"? That means someone with fairly high liquid net worth--otherwise, the SEC has determined that these products are completely unsuitable for someone with limited assets, and limited experience.

As far as managed futures "killing" the S&P, well...thats just not true.
Had you been in futures in 2000-2001, or 2008-09, say for example Campbell, or Frontier, or any of the other top rated Managed Futures funds--depending on the strategy you were in, you could have lost somewhere around 70% of the value.
SEVENTY PERCENT!!
In addition--all of these products are sold by subscription, and have limited liquidation events. In other words--if this person did somehow take your advice and sunk $100k into either one of those --and the market went south like it has in the past, or her transmission went out, or her roof started leaking--she better have some cash in the bank, cause it could take 3-4 months to get out of a hedge or managed futures.
But-- the single biggest element that you missed completely is that these ARE NOT INVESTMENTS!  They are .....hedges!  
Thats why the returns are so different from the indexes. Thats the whole purpose for them--in all practicality, buying a hedge or future is almost like putting insurance on something you own.
If they are used correctly, as intended, they are designed to provide returns and performance that is non-correlated to the markets as a whole--and whatever individual product or holding you are trying to protect--or "HEDGE", hence the name. They definitely have a place and a use--but not as an investment. We use them frequently in our practice, and have many high net clients in them--but they are used as a buffer for large holdings they have.

On another point-- you made the statement that "Personally though I wouldn't give my money to someone else"....
What exactly is the reason you would say that?
Bad experience in the past?
Or do you tend to think that you can do it just as well or better than an advisor can?
Just curious.

I seem to hear that type of comment often here-- yet I'd be willing to bet dollars to donuts, those that do it themselves to save a buck have regularly and consistently both trailed the performance and exceed the declines of a professionally managed portfolio.

It always seems to get  mentioned here about the "high cost" of using an advisor-- but just like anything else, cost is only an issue in the absence of value.
In other words--why does my client care if I charge a commission or a fee-- if I make them money--and more importantly DONT lose it when the markets turn?
And generally,  GREATLY surpass any gains they would have achieved on their own..

Thats a legitimate question-- I'd be interested to hear what the thoughts are from those that do it themselves.

+1. Adding:  having some cash on hand, out of the bank. A bank holiday would constitute an emergency.

"accredited investor".  

look it up, because you clearly don't know what it is.

ar-jedi

What about paying off the mortgage?