Investment 101

May 7, 2025

I’ve been thinking a lot about investing lately, especially since I’m early in my career and want to set myself up for the future. I’m based in the USA, earning around $100k a year, and I wanted to figure out my options—without getting into interest-based investments since that’s not my preference. Here’s what I’ve learned about where to invest, how much to set aside, where to put the money, and what kind of returns I might see over 5, 10, 20, or 30 years. Let’s break it down in a simple way.

Investment Options in the USA for Early Career People

Since I’m just starting out, I looked into options that are accessible and don’t involve interest (like bonds or savings accounts that rely on interest). Here’s what I found works for someone like me in the USA:

  • Stocks (Equities): Buying shares in companies through the stock market is a solid choice. You can invest in individual stocks or go for exchange-traded funds (ETFs) that track broader markets, like the S&P 500. This is profit-based since you’re earning through price growth or dividends.
  • Real Estate (via REITs or Direct Ownership): Real estate investment trusts (REITs) let you invest in property without owning it directly—they pay dividends from rental income, not interest. If you’ve got more capital, buying property to rent out can work too.
  • Business Ventures: Putting money into a small business or startup (either your own or someone else’s) can be a way to grow wealth through profits. It’s riskier but can pay off big.
  • Commodities (like Gold or Silver): Investing in physical assets like gold or silver is another option. They don’t generate interest but can grow in value over time. You can buy physical gold or invest through ETFs.
  • Profit-Sharing Accounts: Some financial institutions offer accounts where your money is invested in businesses, and you get a share of the profits instead of interest. These are often called “Sukuk” or “Islamic investment accounts” and are available through certain banks in the USA.

These options align with avoiding interest while still giving me a way to grow my money over time.

How Much Should I Invest with a $100k Salary?

I make $100k a year, and after taxes, I’m left with about $75k (roughly, since taxes depend on your state—let’s say I’m in a moderate-tax state like Texas with no state income tax). My monthly expenses (rent, food, transport, etc.) come to around $4,000, so that’s $48,000 a year. That leaves me with $27,000 to save or invest annually.

I’ve heard a good rule is to save at least 20% of your income, which for me is $20,000 a year. I like to keep some cash for emergencies—about $10,000 in a liquid account. So, I’m comfortable investing around $10,000 to $15,000 per year. Since I’m early in my career (let’s say I’m 25), I can take a bit more risk, but I’ll start with $10,000 a year to keep things manageable.

Where Should I Invest?

Here’s how I’d split that $10,000 based on the options I mentioned:

  • Stocks/ETFs ($5,000): I’d put half into a broad ETF like one tracking the S&P 500. It’s a mix of 500 big companies, so it’s less risky than picking individual stocks.
  • REITs ($3,000): I’d invest in a REIT focused on commercial properties, which can pay dividends from rental profits. It’s a way to get into real estate without buying a house.
  • Gold ($2,000): I’d buy some gold through an ETF or maybe physical coins to store safely. It’s a hedge against inflation and doesn’t rely on interest.

I’m not ready for business ventures yet since they’re riskier, and I’d need to research profit-sharing accounts more to find one that fits.

What Returns Can I Expect Over 5, 10, 20, and 30 Years?

Let’s estimate the growth of my $10,000 annual investment. I’ll assume I invest this amount every year, and here’s what I found for average annual returns (based on historical data, but of course, past performance isn’t a guarantee):

  • Stocks/ETFs: Historically, the S&P 500 averages about 7-10% annual growth after inflation (let’s use 8% to be conservative).
  • REITs: Non-interest-based REITs might give around 6-8% through dividends and growth (I’ll use 7%).
  • Gold: Gold has averaged about 3-5% annual growth over long periods (I’ll use 4%).

I’ll calculate the weighted average return for my portfolio:

  • Stocks: 50% of my portfolio at 8% = 4% contribution
  • REITs: 30% at 7% = 2.1% contribution
  • Gold: 20% at 4% = 0.8% contribution
    Total average return = 4% + 2.1% + 0.8% = 6.9% per year.

Now, if I invest $10,000 every year at a 6.9% average return, here’s what I might have over time (using a future value of an annuity formula, FV = P * [(1 + r)^n – 1] / r, plus the annual contributions compounding):

  • After 5 years: I’d invest $50,000 total. With 6.9% growth, I’d have around $59,500.
  • After 10 years: $100,000 invested, growing to about $139,000.
  • After 20 years: $200,000 invested, growing to about $389,000.
  • After 30 years: $300,000 invested, growing to about $790,000.

These numbers assume steady returns, which isn’t realistic—markets go up and down. But it gives me a rough idea. Over 30 years, my $300,000 in contributions could more than double to $790,000, which feels like a solid foundation for retirement.

Final Comment

Starting to invest early with my $100k salary feels doable. I can set aside $10,000 a year and split it between stocks, REITs, and gold to avoid interest-based options. Over time, I could see decent growth—maybe $59k in 5 years or close to $800k in 30 years, which is exciting to think about! It’s all about starting small, staying consistent, and picking options that match my values. If you’re in a similar spot in 2025, I hope this helps you get started too!