Don’t stop when you hit this money milestone — 3 ways to grow your portfolio from $100K to $500K

Check your asset allocation

Once you have $100K, you have enough cash to spread around. This means it's really important to ensure your assets are diversified. You can't put too many eggs in one basket, and you have a lot of eggs to take care of here.

If you're young, it's smart to take on more risk with your $100K to maximize your returns long-term. A good rule of thumb is to figure out the percentage of stocks that should be in the portfolio by subtracting your age from 110. For example, if you’re 30, you can consider making stocks 80% of your portfolio.

If you're getting older, you may want less exposure to the market. You also want the right mix of stocks. This means spreading your money across different industries and companies of different scales so you aren't over-invested in any one type of business. Fortunately, this is easy with ETFs.

You have the option of buying funds that give you exposure to large-cap stocks, which are less volatile, mid-caps with moderate volatility and small-cap companies, with the most volatility but the greatest potential for big gains.

By building the right mix, you reduce the chance of losing money while ensuring you earn the returns you need.

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Be strategic about your accounts

With a high-value portfolio, it becomes important to make sure your money is going into the right accounts. Afterall, you don't want to leave tax advantages on the table. At the same time, you don't want to lock up your cash and not be able to access it when you need it.

For most people, maxing out tax-advantaged accounts first is a good move. A workplace 401(k) is a good place to start, and it’s in your best interest to invest enough to earn your full employer match.

Once you've done that, though, it's a good idea to make some contributions to a Roth IRA to grow your savings tax-free until retirement. Using a traditional IRA can also have some benefits over a 401(k) after your match has been capped, including access to a wider pool of investments.

If you're planning for early retirement, it may even make sense to put some of your money into a taxable brokerage account so you can access it penalty-free before reaching 59 and a half (which is typically how long you have to wait to withdraw from a 401(k) or IRA without penalty).

Evaluate your timeline and investing goals

Finally, when hitting that all-important six-figure balance, it’s important to figure out what time constraints you might have going forward. You have a lot of money working for you, which will help you build wealth more quickly. But at this point, it’s important to consider how much time you have left in your investing journey and what big expenses you may be taking on in the coming years.

If early retirement or financial independence is your goal, you may want to pump the gas and continue actively investing. With the $100K you already have, you could hit a $500K target in a decade if you invested around an additional $1,200 per month, assuming a 10% average annual return (the historic returns provided by the S&P 500).

If you're still 30 years away from retirement and already have $100K, you may not have to invest as much since it can turn into $1.7 million by retirement, even if you don't save another dime. That doesn’t mean stop investing altogether — since a bigger cushion is always better. But you could consider cutting back to avoid burnout or risk exposure.

The key is to define your goals, get clear on your timeline and then set up fixed investments to achieve your objectives. It’s safe not to assume that your $100K portfolio will be enough.

By considering these three steps, you can unlock the potential to grow your wealth from $100K to $500K and beyond.