With $100,000 to start with, you have several paths to work in your attempt to grow that money to a whopping $1 million nest egg. Each path has its own trade-offs, commitments, risks, and opportunities, and you should recognize those as part of your decision on how to proceed.

Given your initial money, reaching that milestone could be fairly straightforward if you have enough time to enable the market or your efforts make the magic happen. To help you get started, here are five ways to grow $100,000 into $1 million for your retirement savings.

Man with cash and a piggy bank.

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1. Buy a stock index fund

One of the most straightforward ways to turn $100,000 into $1 million is to buy a broad market stock based index fund and hold on for the ride. Over long periods of time, the market has delivered compound returns somewhere around 9% to 10% annualized. If the market does deliver in line with those historic rates of return, at 9% annualized returns, $100,000 turns into $1 million in under 27 years, and at 10%, it takes just over 24.

Even if stocks underperform that level in the future, at 6% annual returns, $100,000 turns into $1 million in under 40 years. Even if you don't have 40 years until you retire, you don't spend your entire nest egg the instant you stop working, and the money you're not spending can continue to compound on your behalf.

The big upside of this approach is that it's very low-effort on your part. You make a one-time decision, and then you wait. The market and the underlying companies do the heavy lifting on your behalf. The downsides are that at best, it'll take decades for you to get there, and of course, the fact that stock market returns are far from guaranteed.

2. Invest using options

Risk meter pointing to high risk.

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Options are a leveraged investing tool that might be able to compound your money even faster than stocks can. With a $100,000 nest egg, you should be able to get basic options permissions at most brokerages. Add a bit of experience with options under your belt, you can apply to get more advanced permissions to attempt even more aggressive strategies.

Of course, there are some incredible downsides to this approach that make it tougher and riskier than investing in stocks. For one, the leverage involved in options means that your losses can be just as magnified as your gains -- if not more so. In addition, options expire, so investing with them requires you to take a much more active approach than simply buying an index fund does. If that weren't enough, those expiring options mean you'll face a lot more churn and tax related costs if your strategy works.

Between the more active effort involved, the higher churn costs, and the additional risks associated with options investing, think carefully about pursuing this approach to try to eke out higher returns. Even with those downsides, using options to get faster returns than stocks may be possible, but it is far from guaranteed.

3. Buy a franchise opportunity

Franchise costs are all over the map, but there are several that will accept some or all of your $100,000  to get started in your endeavor. The advantage of a franchise is that you're buying into a known entity where you can see examples of success and get an estimate for the potential returns before you put your money on the line. As a franchise owner, you have the potential to earn an ownership return above and beyond the salary for the role you play in the business, which can help you reach your target.

A key disadvantage is that you not only pay the start-up costs for the franchise, but you also typically have to pay ongoing costs as well. Those include things like having to pay royalties as a percentage of your revenue and being forced to use captive suppliers for your materials and supplies. You may also be limited either by the franchise agreement or by customer expectations based on what other branches of the franchise charge in terms of what you can charge for your services.

On top of that, as a franchisee, you are locked in to the operating model of the franchisor. If you have better ideas on how to run things, you may be limited in your ability to adjust how you do business. Still, many people find that the advantages of franchising outweigh the disadvantages and are willing to combine their money and their elbow grease in pursuit of building their wealth.

4. Start your own company

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$100,000 is a reasonable amount of seed capital to use to start up your own small business. If you have a decent idea and a clear addressable market, you might want to use that money as an incubator to launch your idea into an operating company. Big advantages of launching your own company over buying a franchise are that you don't owe royalties to the parent company and that you have more control over how you operate.

Of course, there are disadvantages, too. Key among them are that you won't have the proven business model or the support that come from the franchisor. That means you'll face a different set of risks and may find yourself in a position where success could be harder to come by.

Still, if it does work out for you, owning your own business can be a great way to either directly generate that $1 million retirement savings or to build enough value in the business to later sell for $1 million. And who knows, you might find out -- like Warren Buffett -- that even once you reach a place of financial comfort, that you like working well enough to keep at it even though you don't need the money.

5. Add to your $100,000 over time by investing

If you like the low-effort approach of investing in stocks but aren't a fan of the time it will take to grow $100,000 into $1 million, you can always start by investing what you have and adding to it over time. The following table shows how many years it will take for your nest egg to turn into $1 million based on how much you add to it over time and what rate of return you earn.

Monthly Investment

10% Annual Returns

8% Annual Returns

6% Annual Returns

4% Annual Returns


























Data source: author.

The act of regularly adding to what you already have can be a great way to speed up the time it takes to grow your initial $100,000 nest egg into $1 million. As for that $2,125 monthly investment? Well, that works out to the maximum a person under 50 can contribute to both a 401(k) and an IRA in 2021. $19,500 in a 401(k) and $6,000 in an IRA  work out to $25,500 per year, or $2,125 per month.

The key disadvantages are that you'll have to keep making those regular investments over time to speed up your timeline and, of course, the fact that market returns are never guaranteed.

Make a plan and get on your path to your goal

Turning $100,000 into $1 million is a very reasonable goal that may very well be within your reach. No matter which of these five paths you take -- or if you blaze a new trail on your own -- the biggest asset you have is actually your time. So get serious about making you plan right now, and give yourself that much chance of reaching that $1 million of retirement savings.