Starting from 100,000 yuan, how to choose investment targets to make wealth "double"?

As the year comes to an end, the phenomenon of rising prices becomes more and more evident. Eggs have increased fivefold, bubble tea prices have risen by 20~30%, and mortgage rates have climbed from 1.31% during the pandemic to 2.2%. For a ten-million-dollar mortgage, just the interest rate difference in one year amounts to NT$89,000. In such an environment, relying solely on salary cannot keep up with inflation; investment and financial management have become essential means to protect assets.

Many people consider saving their first NT$1 million a milestone, but for young people just entering the workforce, it’s too distant. So, if you have NT$100,000 on hand, how should you utilize it to accumulate more wealth? The answer lies in the three key elements: mindset, projects, and time.

Essential Preparations Before Investing: Building a Financial Foundation

Before starting to invest, there is a crucial premise often overlooked—this money must be “idle funds”. That is, even if the investment declines, it will not affect your daily life.

Keeping accounts is the first step. Treat yourself as a company, clearly understand your income and expenses, identify areas to increase income and cut costs, so you can determine a stable cash flow for investment. Without this foundation, even the best investment methods will not be effective.

Choosing the Right Projects to Maximize the Effectiveness of NT$100,000

The purpose of investment varies from person to person. For students, the best investment is studying well; for office workers, regular fixed investments in financial products are suitable; retirees need stable cash flow; the wealthy focus on asset inheritance.

For small investors, the investment goal should be “helping expenses find income”. You pay NT$xxx each month for phone bills, utilities, and plan trips or buy a new phone each year—these expected expenses guide your investment choices.

For fixed monthly expenses, choose monthly distribution funds or high-yield targets. Many funds have a distribution rate of 7~8%, so investing NT$100,000 can yield NT$7,000~8,000 annually, about NT$600~700 per month, just enough to cover communication costs.

If your goal is NT$30,000~NT$40,000 for expenses (like a new phone or traveling abroad), you need to generate a 30~40% return. The simplest method is “arbitrage”: deposit USD to earn 5% interest, use USD as collateral to borrow TWD at only 2% interest, and cycle between them. Or buy high-dividend funds for collateral.

Another approach is tracking trend-based stocks. With small capital, your entry and exit won’t impact the market much—you can invest wherever opportunities arise, like a nomad. Although an annualized 20% return is already excellent (even Buffett’s average is about 20%), Buffett once said that if he only had US$1 million, he could earn at least 50% annually.

Different capital levels require different strategies. The biggest advantage of small capital is flexibility. US stocks, indices, precious metals, cryptocurrencies—many platforms support low initial investments and leverage to amplify returns. As long as you judge the right direction and increase turnover to exchange for higher returns, you can quickly grow your principal. Simultaneously, reinvesting your work income as new principal and compounding will make your assets grow like a snowball.

Investment Strategies for Three Types of People

Stable-income Employees

Suitable targets: dividend funds, high-yield ETFs

With limited monthly investment, it’s best to choose stable dividend-paying assets. Over time, dividends can even surpass your salary, effectively adding to your retirement income. Although this method doesn’t fully utilize compound interest and the asset growth is slower, it offers quick returns and is easy to stick with, making it especially suitable for conservative groups seeking stability.

High-Income Groups

Suitable targets: index ETFs

High earners like doctors and engineers don’t need to rush for profits from investments. They are suitable for regular investments tracking major indices. Taiwan’s 0050 tracks the top 50 companies; the US’s SPY tracks the top 500.

These indices automatically “weed out the weak and keep the strong.” Decades ago, GE was the world’s strongest company; later, it was Ford, Microsoft, Apple. Indices favor the strong, and long-term returns are very impressive—the S&P 500’s average return over the past 100 years is 8~10%. Compared to a 5% USD fixed deposit, NT$100 invested for 10 years grows to NT$236 with the former, but only NT$155 with the latter—a nearly double difference.

Of course, the stock market has risks. The dot-com bubble in 2000, the 2008 financial crisis, the 2020 pandemic, and the 2022 inflation—each major dip was followed by a rebound to new highs. But if you need to cash out midway, you must accept losses. Therefore, long-term investing is more suitable for high-income individuals with strong risk tolerance.

Real estate is also an option. Buying a NT$10 million house and selling it after 5 years for NT$12 million earns a 20% profit (excluding taxes and fees). But if you only put down NT$2 million and borrowed the rest, with an annual interest of NT$20,000, after 5 years, deducting interest costs, you still earn NT$1 million—a 50% return rate. The key is moderate leverage, and higher-income earners find it easier to obtain low-interest loans.

Housing prices don’t increase steadily 4% annually but fluctuate. If you can seize periods of rapid growth and use leverage to go long, your returns can be even higher. You can also shift from real estate to stocks or forex, moving from yearly to monthly, weekly, or even daily cycles. By reasonably calculating expected returns and setting entry and exit points, increasing leverage during high-probability periods, you can achieve stable long-term appreciation.

However, this requires extensive research and may impact your primary job’s promotion prospects, which might not be worth the risk.

Time-Rich People (Students, Salespeople)

Suitable targets: short-term hype stocks, cryptocurrencies

These individuals don’t need time to accumulate wealth but can rely on turnover rate. Their main activity is data collection, which is speculation rather than investment.

For example, the US interest rate hike cycle is nearing its peak; future cuts or QE are expected. The supply of US dollars will increase, and shorting the dollar after the last rate hike has a high success rate. A declining dollar will also boost cryptocurrencies.

The stock market also features “hot topic speculation.” When the government announces opening up to mainland tourists or foreign visitors to Taiwan doubles next year, tourism stocks have room to rise. AI concept stocks follow similar logic. By grasping news and current events to predict major capital flows, following the trend can be profitable. This short-term behavior of riding hot topics and hype is speculation, requiring constant monitoring and data collection.

Practical Comparison of 5 Major Investment Targets

Gold: A Stable Choice Against Inflation

Over the past 10 years, gold appreciated by 53%, averaging 4.4% annually. No dividends; gains come solely from price differences. Gold’s strength is effectively countering inflation and currency depreciation. During economic instability or market volatility, its hedging properties are especially prominent.

Significant gold price increases occurred mid-2019 to mid-2020 (COVID-19, US rate cuts) and 2023~2024 (Russia-Ukraine war).

Bitcoin: High Volatility Short-Term Opportunity

Over the past 10 years, Bitcoin’s gains have been astonishing, with no dividends, profits from price differences. Its bullish and bearish factors are all new: exchange failures cause negatives, increased cross-border remittance demand causes positives. Some say it’s an alternative to US dollar depreciation, but these are hard to replicate.

Don’t expect Bitcoin to rise another 170 times to US$6 million, but short-term bullish signals exist. The current bullish cycle is driven by halving events, spot ETF listings, and political changes. Short-term trading is suitable for going long, but long-term, it’s better to buy at lows, reduce holdings at highs, and avoid over-allocating, as volatility is huge and it’s a speculative tool.

ETF - 0056: Taiwan’s Top High-Yield ETF

Tracks high-dividend stocks, with profits mainly paid out annually. Difficult to profit from price differences, relies on dividends. Over the past 10 years, cumulative dividends reached 60%, and stock prices increased by 40%; similar trends are expected for the next decade.

Invest NT$100,000, and after 10 years, the principal grows by NT$40,000, with annual dividends around NT$6,000. It may seem modest, but if you keep investing NT$100,000 every year, after 13 years, annual dividends will reach NT$10,000, enough to support living expenses. After 25 years, dividends exceed NT$220,000, plus monthly pension of NT$20,000 from labor insurance and retirement funds, totaling over NT$40,000 monthly income—living comfortably.

ETF - SPY: The King of US Stock Compound Growth

Tracks the top 500 US companies. Dividend yield is only 1.6%, and non-US investors face a 30% withholding tax, so net yield is about 1.1%. The main gains come from asset appreciation.

Over the past 10 years, from 201 to 434, the return is as high as 116%. Average annual dividend is 1.1%, with an 8% increase in principal. Investing NT$100,000 yields NT$1,100 annually; after 10 years, worth NT$216,000.

Even if dividends are spent, as long as you hold for 30 years, NT$10,000 can grow to NT$100,000, accumulating to NT$3 million principal and ultimately NT$12.23 million. This compound growth carries very low risk—so long as the US dollar remains the global settlement currency, the US won’t go bankrupt, and assets will steadily increase.

The downside is almost no cash flow along the way, relying entirely on asset appreciation. The key is whether your income is stable.

Berkshire Hathaway Stock: Buffett’s Compound Growth Holy Grail

Warren Buffett’s holding company, the holy grail for compound investors. Profits can be replicated: through insurance companies accumulating cash or low-interest arbitrage.

For example, issuing 0.5% annual interest bonds in Japan to raise funds, then buying Japanese stocks; dividend yields far exceed 0.5%, so as long as principal isn’t lost, you profit. Or issuing 30-year savings insurance in the US to buy 30-year government bonds, arbitraging the interest spread.

This model doesn’t change with Buffett’s passing; as long as the company’s strategy remains, profits continue. If you want all earnings to compound, BRK is an excellent choice.

Conclusion

Most of the above targets can be entered with just a few thousand NT dollars, whether through fixed investments or one-time speculation. Time is the best friend of compound growth.

As long as you have good investment thinking, choose the right projects, have enough patience to wait for compound interest, or take time to research entry points, with “mindset, projects, and time” all in place, becoming a small wealthy person is just around the corner.

NT$100,000 is not the end but the starting point of wealth accumulation. Start now and let the power of compound interest work for you.