If you’ve ever thought about investing but felt like you didn’t have enough money, think again. The truth is, you can start investing with just $100! Thanks to modern tools and platforms, investing has never been more accessible to everyone, regardless of how much you have to start with. In this guide, we’ll walk through some smart ways to get started with just $100 and how to maximize that investment to grow over time.
Why Start Investing with $100?
You may wonder if $100 is even enough to make a difference. The answer is yes! Starting with a small amount is an ideal way to build confidence, get familiar with the market, and establish smart financial habits. Plus, the power of compound interest means that even small investments can grow significantly over time.
1. Invest in Fractional Shares
What It Is: Fractional shares allow you to buy a “fraction” of a stock instead of a whole share. This means you can invest in high-priced stocks without needing hundreds or thousands of dollars.
Why It Works for $100: You can diversify by buying small amounts of several different stocks, which can reduce your risk and give you a taste of the stock market.
How to Start: Platforms like Robinhood, M1 Finance, and Fidelity offer fractional share investing with no minimum purchase amount. Simply choose a few companies you’re interested in, allocate a portion of your $100, and get started!
2. Open a High-Yield Savings Account (HYSA)
What It Is: A high-yield savings account is a type of savings account that offers significantly higher interest rates than traditional bank accounts.
Why It Works for $100: HYSAs offer a safe place to grow your money with no risk of loss. While returns are modest, they’re much higher than regular savings accounts, and you retain complete access to your money.
How to Start: Look into online banks like Ally, Discover, or Marcus by Goldman Sachs, which often have competitive interest rates. You can set up an account in minutes, and your funds can start earning interest immediately.
3. Invest in Exchange-Traded Funds (ETFs)
What It Is: ETFs are funds that hold a collection of assets (such as stocks or bonds) and trade on stock exchanges. They’re known for their diversification, as each fund typically includes a range of investments.
Why It Works for $100: ETFs allow you to own a portion of many assets, reducing risk and providing exposure to the market’s long-term growth.
How to Start: Apps like Vanguard, Fidelity, and Charles Schwab have low-fee ETFs, and many brokerages allow you to buy fractional shares of these ETFs, so your $100 can go further. Popular beginner-friendly ETFs include Vanguard Total Stock Market ETF (VTI) and SPDR S&P 500 ETF Trust (SPY).
4. Try a Robo-Advisor
What It Is: Robo-advisors are automated platforms that create and manage an investment portfolio for you based on your risk tolerance and goals.
Why It Works for $100: Robo-advisors make investing easy, even if you have no prior knowledge. They automatically diversify your investments, rebalance them periodically, and optimize your portfolio for growth.
How to Start: Popular robo-advisors like Betterment, Acorns, and Wealthfront allow you to get started with minimal amounts. Acorns even rounds up your daily purchases and invests the change, which can help you grow your investment without any extra effort.
5. Buy Bonds or Treasury Bills
What It Is: Bonds are loans you make to the government or a company. Treasury bills (T-bills) are short-term bonds issued by the government. Both are relatively low-risk investments that pay you back with interest.
Why It Works for $100: Bonds and T-bills provide a low-risk way to earn a small, predictable return on your investment. They’re great for those who are risk-averse or just starting out.
How to Start: You can purchase Treasury bonds or bills directly from the government at TreasuryDirect.gov. For corporate bonds, check with your brokerage platform to see available options.
6. Invest in Real Estate through REITs
What It Is: A REIT (Real Estate Investment Trust) is a company that owns or finances income-producing real estate, such as apartments, hotels, and malls. They allow everyday investors to gain exposure to real estate.
Why It Works for $100: REITs pay dividends from the rental income collected, allowing you to earn passive income from real estate without buying or managing properties yourself.
How to Start: Publicly-traded REITs are available on most investment platforms and are easy to buy with fractional shares. If you want to explore crowdfunding options, sites like Fundrise and DiversyFund have low minimums and let you start with small amounts.
7. Invest in a Certificate of Deposit (CD)
What It Is: A CD is a savings certificate with a fixed interest rate and maturity date. They’re issued by banks and are considered safe investments, though they typically come with a fixed holding period.
Why It Works for $100: CDs provide a safe way to earn a bit more than regular savings accounts, especially if you’re willing to lock your money in for a set period.
How to Start: Many online banks offer CDs with low minimums, some even as low as $100. Ally Bank and Capital One have a range of options, from short-term to long-term CDs, so you can choose based on your comfort level.
8. Contribute to an IRA (Individual Retirement Account)
What It Is: An IRA is a retirement savings account with tax benefits. There are traditional IRAs (pre-tax) and Roth IRAs (post-tax), and they’re both great tools for long-term retirement planning.
Why It Works for $100: IRAs allow your investments to grow tax-free or tax-deferred, which can significantly increase your returns over time.
How to Start: Many brokerages, including Fidelity, Vanguard, and Charles Schwab, allow you to open an IRA with minimal initial deposits. Start with $100 and aim to contribute more over time to maximize tax advantages.
9. Peer-to-Peer Lending
What It Is: Peer-to-peer (P2P) lending platforms allow you to lend money directly to individuals or small businesses in need. In return, you earn interest on the loan.
Why It Works for $100: P2P lending offers higher potential returns than many traditional investments, though it carries more risk as well.
How to Start: Platforms like LendingClub and Prosper allow you to start lending with as little as $25 per loan. Diversify your $100 across a few different loans to help spread your risk.
10. Experiment with Micro-Investing Apps
What It Is: Micro-investing apps make it easy to start investing small amounts by rounding up your everyday purchases and investing the spare change.
Why It Works for $100: Micro-investing is a painless way to build wealth without any effort, and with automatic round-ups, you may quickly surpass your initial $100.
How to Start: Apps like Acorns and Stash allow you to start investing with as little as $5. Acorns, for example, rounds up each purchase and invests the change, so you’re building your investment fund without even noticing.
Making the Most of Your $100 Investment
Starting with $100 may not seem like a lot, but it can be the first step toward achieving your financial goals. Here are some additional tips to help you maximize your investment:
- Start Small but Be Consistent: Make a habit of adding a small amount each month, even if it’s just $10 or $20. Consistent contributions compound over time.
- Reinvest Earnings: If you earn dividends or interest, reinvest those earnings to boost your returns.
- Keep Learning: The more you learn about investing, the more confident you’ll be. Understanding basic terms and strategies can help you make smarter choices.
- Diversify: Spread your investment across different asset classes to reduce risk and stabilize returns.
With these strategies, you can start building your portfolio and learning about the world of investing with just $100. Remember, the key is to get started, stay consistent, and keep your long-term goals in mind. Happy investing!
