A story of turning around with a small capital of 100,000: Choose the right investment direction, and wealth will naturally flow in.

End of year is approaching, and soaring prices have become a daily experience. Egg prices have doubled, dining costs increased by 20~30%, and mortgage rates have risen from a pandemic low of 1.31% to 2.2%—these numbers hide a harsh reality: relying solely on work income will only increase financial pressure.

Taking a 10 million mortgage as an example, an increase from 1.31% to 2.2% in interest rate adds nearly ###90,000 in annual interest costs. In this environment, small-scale investing is no longer optional but necessary. The question is: how to start the wealth growth engine with just ###100,000?

The Three Elements of Investing: Mindset, Targets, and Time

Many think investing is complicated, but the logic is simple—like running a business, it requires three things: the right mindset, suitable targets, and enough patience.

Step 1: Organize cash flow and confirm investable amount

Don’t be scared by the word “investment.” First, understand a basic concept: investment must use idle money, meaning this money’s use will not affect your daily life.

It sounds simple, but many fail to do it. They invest emergency funds, and when the target drops, they are forced to sell at a loss, suffering heavy losses.

So, the first step should be bookkeeping—manage yourself like a company. Clarify:

• How much is your fixed monthly income
• How much are your necessary expenses
• How much surplus can be used for investment

Only then can you calculate a stable investment amount, rather than blindly going all-in.

Step 2: Match expenses with corresponding income

With ###100,000 in hand, don’t rush to invest randomly. First ask yourself: What problem does this investment solve for me?

Different people have different answers:

Monthly fixed expenses (e.g., phone bill, internet) → Choose dividend-paying funds or high-yield ETFs, aiming for annual dividends of 7~8%, which can generate 600~800 yuan passive income per month with 100,000 invested

Large expenditure needs (e.g., traveling abroad, buying a new phone) → Require 30~40% returns, demanding more aggressive strategies

Long-term asset accumulation → Pursue compound growth, with an annual return of 8~10% sufficing

This logic is crucial: Make each investment have a clear goal, not just watch the account balance grow.

Investment Mindsets for Different Capital Sizes

Small capital has its advantages—high flexibility, no market disturbance when entering or leaving, easy to test and learn. But strategies must vary by person.

Stable-employed professionals

Your advantage is stable cash flow; your disadvantage is limited time. The best strategy is dividend ETFs + long-term holding.

Take 0056 as an example: over the past 10 years, dividends accounted for 60%, capital appreciation 40%. If you invest 100,000 annually and spend all dividends, after 13 years, you can withdraw 100,000 annually just from dividends. After 25 years, annual dividends reach 220,000. Combining with pension and labor insurance after retirement, quality of life can improve year by year.

This approach seems slow, but the benefits are:

• Stable, low psychological burden
• Easy to stick with, as cash flow feedback exists
• Exponential growth of compound interest over time

High-income groups (doctors, engineers, etc.)

You don’t lack cash flow; what you need is real asset growth. At this stage, SPY or US stock index ETFs are better choices.

SPY tracks the top 500 US companies. Over the past 10 years, it rose from 201 to 434, a 116% return, about 8% annually. Although dividends are only 1.1% (after 30% US tax), capital appreciation is the main focus.

Key calculations:

• Invest 100,000, after 10 years worth about 216,000
• Continue for 30 years, investing 3 million over that period, final assets reach 12.23 million

This kind of compound growth is almost risk-free—so long as the US dollar remains the global settlement currency, the US won’t go bankrupt, and assets will inevitably appreciate.

The downside: no cash flow during the process, relying solely on capital appreciation. Suitable only for those with already stable income.

People with ample time but limited capital (students, entrepreneurs, etc.)

Your advantage is more time and high-frequency operation. Your strategy should shift from “relying on time compound interest” to “profiting from operational frequency.”

These investors are suitable for chasing hot topics:

• US Federal Reserve may cut rates after peaking → short USD, long cryptocurrencies
• Government announces opening of free travel for mainland tourists → tourism stocks rise
• AI wave arrives → AI-related stocks soar

This short-term trading requires:

1. Constant market monitoring
2. Quick information gathering
3. Timely entry and exit

Profits mainly come from market over-optimism or over-pessimism reactions—creating opportunities for “leeks” (retail investors) engaging in short-term speculation. This is gambling rather than investing, with high risk but quick returns.

Deep Analysis of Five Major Targets

Now, let’s see what 100,000 yuan can be invested in specifically.

1. Gold (precious metals for hedging)

Past 10-year increase: 53% (annual average 4.4%)

Gold pays no dividends; returns come solely from price differences. Why allocate gold? Because it’s a hedging tool against inflation.

Periods of significant gold rise usually coincide with:

• Economic crises (2008 financial crisis, 2020 pandemic)
• Geopolitical conflicts (Russia-Ukraine war)
• Monetary policy shifts (Fed rate cuts)

In unstable times, gold often outperforms stocks. That’s why big investors like Buffett keep a certain proportion of gold— not for profit, but for peace of mind.

2. Bitcoin (digital asset volatility king)

Current price: $87.03K (latest data) 24-hour change: -0.06%

Bitcoin is currently the most talked-about investment target. Over the past 10 years, it surged over 10,000 times, but this figure can be misleading.

Bitcoin’s rise is driven by different factors each time:

• Early: cross-border payment needs, underground gold flow
• Mid: dollar replacement effect, safe-haven asset
• Recently: halving cycles, spot ETF listings, geopolitical tensions

Key point: Bitcoin lacks thousands of years of recognition like gold, nor does it have corporate earnings like stocks. Its value is entirely driven by consensus. Short-term speculation is possible, but long-term caution is advised.

Suggested strategies:

• Short-term: seize clear themes like “halving → rate cuts → QE”
• Long-term: treat as a speculative asset, not exceeding 10~15% of total assets
• Entry: buy at low prices, reduce holdings at high points

3. 0056 (Taiwan high-yield ETF)

10-year dividends: 60% 10-year capital appreciation: 40%

0056 is Taiwan’s most well-known high-dividend tool. The core strategy is investing in high-dividend stocks to earn yields.

This target is suitable for:

• Those needing cash flow
• Those psychologically needing “visible returns”

The downside is limited reinvestment of dividends and capital appreciation. But it’s psychologically satisfying—dividends paid quarterly, making investors more willing to continue adding.

4. SPY (US giant ETF)

10-year increase: 116% (from 201 to 434) Average annual dividend: 1.1% (after tax) Average annual capital appreciation: 8%

SPY tracks the top 500 US companies. Unlike 0056, SPY focuses on growth rather than dividends.

Its key advantage is the “automatic elimination mechanism”—poor-performing companies are removed, and strong ones added, ensuring the index always contains the best companies.

The power of compound interest is remarkable:

• Starting with 100,000, after 30 years, it becomes 1 million
• Over 30 years, investing 3 million, final assets reach 12.23 million

This is almost a no-brainer—just invest regularly, hold long-term, and avoid tinkering.

5. Berkshire Hathaway (Warren Buffett’s Holy Grail)

Berkshire’s profit model is unique—it doesn’t produce goods but earns through arbitrage.

Core logic:

1. Accumulate cheap capital via insurance companies
2. Invest this capital in high-yield assets
3. As long as returns exceed financing costs, profit is made

Concrete examples:

• Issue 0.5% annual interest bonds in Japan → use funds to buy Japanese stocks (dividends around 5%)
• Issue 30-year savings insurance → invest in 30-year US Treasury bonds

As long as fundamentals stay the same, this model can continue. Even if Buffett passes away, Berkshire’s operating logic remains valid.

So, if you want your wealth to snowball automatically, BRK is a good choice.

Practical Summary

Starting with 100,000 yuan for small-scale investing isn’t about how much principal you have, but whether you’ve found the right rhythm.

Three life choices:

• Stability-seeking: Focus on 0056, annual dividend 5~6%, slow savings, slow compounding
• Growth-seeking: Focus on SPY, annual growth 8~10%, tenfold in 30 years
• Fast-paced: Short-term themes + cryptocurrencies, high operation frequency, volatile returns

No matter which path you choose, you need three things:

• Correct mindset: Understand the power of compound interest, risk matching
• Suitable targets: Select based on your situation
• Ample time: Let compound interest work its magic

Final words: Choice is more important than effort, but persistence is more important than choice. After finding your suitable direction, keep investing consistently and patiently wait. Ten years later, looking back, every cent invested now will have turned into returns.