Question: 
How should I invest $100,000? I want to pay the mortgage on my home ($1,500 per month) with the income from the initial investment?

Answer:
The short answer is that you can't get there from here. You are asking too much of that $100,000. Your mortgage payments total $18,000 a year, which would require 18 percent income on your investments.

Any way you look at it, you have proposed something that resembles a "sinking fund," to steal a phrase from the world of corporate finance. If this $100,000 is truly the only source you have for paying your mortgage, then you probably can't afford to live in that house.

I assume you have a 30-year mortgage and that you need to make payments for three decades. If you aren't willing to use up any of the $100,000, you'll have to earn 18 percent every year on your money. There's no investment that can assure that sort of return.

Even if you're willing to use up the entire $100,000 during this 30 years, that won't help much. You'll need an annual return of 17.9 percent, as you can figure out using a financial calculator, in order to make 360 payments of $1,500 each, a total of $540,000.

You didn't read that wrong: 17.9 percent. Depleting the $100,000 makes virtually no difference in the return you'll need, because as you use up the money there is less and less earning interest in your account.

I think it's safe to assume you could invest the $100,000 at 8 percent interest at an acceptable level of risk. You then have two choices. First, you could simply take the earnings, $8,000 a year, and apply them to your mortgage payments. You'd still have a big shortfall, but at the end you'd still have your $100,000. Second, you could simply make the $1,500 payments for as long as your money lasted, and then you'd have to figure out some other way to make the payments, such as selling the house (probably at a profit) or rent it out.

Starting with $100,000, you could take out $1,500 for 88 months before you were broke. That's seven years and four months - about as long as the average 30-year mortgage stays on the books of the average mortgage lender.

You asked for investment ideas, so let's look at a few options.

Theoretically, it's possible you could invest in stocks and earn 18 percent, though that would be very tough if you're making $1,500 withdrawals every month. If you managed to buy stock in the next Microsoft or the next Cisco or the next Dell Computer, you would be home free, almost literally. But the odds of doing that are not in your favor, to put it gently.

If you failed, at some point you would run out of money and have to either find another source to make the mortgage payments or sell the house.

Another possibility would be to invest $50,000 very aggressively, hoping to double your money every two or three years, as you might be able to do with a combination of technology stocks and superb luck. You could put the other $50,000 in a bond fund, presumably earning 8 percent, and use the bond fund to make your monthly payments.

That $50,000 bond portfolio would be gone in about 2.5 years. But if you were very fortunate in your investments, by then you might have enough profits to replenish your bond portfolio. I'd guess the odds of your succeeding at that strategy would be significantly less than 20 percent, even if you were really disciplined and really lucky.

But let's assume you could do that for the first two and a half years, and you then put $50,000 back into the bond-fund pool. You'd gain another 2.5 years of payments. But could you keep doing this over the life of a 30-year mortgage? No matter how good an investor you are, your odds of doing that would be very, very small.

Bottom line: Without knowing more about your situation, I cannot give you good investment advice, because you are asking your money to do the impossible for you. My financial advice, as opposed to investment advice, would be to figure out some other way to pay the mortgage. Maybe a larger starting balance would do it. If you started with $205,000, you could earn a relatively safe 8 percent and make the 30 years worth of payments.

Here's a final thought. There's something very important that we have ignored: taxes. This discussion assumes that you have some other source of income from which to pay the taxes on all the income and gains we're assuming you will make. Your tax deduction on the interest part of the mortgage should reduce your overall tax bite - but not all of it.

Even if your investments worked out perfectly, because of taxes, you'd be swimming upstream financially.