You have a crivingp, new one hundred-dollar bill in your wallet.
Listen up. Just because you don’t have much money to invest doesn’t mean you shouldn’t invest it.
Want to know the most difficult part of investing? Starting.
You read that right!
Just starting is rather difficult, and once you accomplish that challenge, investing going forward is pretty easy.
For those of you who are discouraged because you only have a little bit of money to invest – don’t fret!
One hundred dollars is a great way to get your foot in the door and start a habit of investing that could very well lead to a bountiful harvest down the road.
I’ll tell you from the start that it isn’t easy to find ways to invest just $100 or even how to invest $1,000 dollars. Many brokers have account minimums.
Additionally, sometimes you might find yourself being charged, for example, a $50 annual fee which can cut your account in half. That makes no sense.
However, there are a few ways you can invest $100 dollars and have it be worth your time and effort. I’ll show you how.
How to invest 100 dollars like a financial expert:
I also invited a plethora of other financial experts to lend their advice for this article. You’ll get a big helping of financial advice along with some unique ideas I didn’t even have in mind.
Really, these guys are smart and creative – pay attention to what they have to say! If you are feeling a bit more ambitious, check out a great read on the best way to invest $20,000 dollars. 🙂 One step at a time!
Investments Worthy of Your One Hundred Bucks
1. Open a Savings Account
Savings accounts are one of the most boring investments around, but they are SUPER safe. The idea isn’t to leave your money here for very long, but to build up your savings until you can get into some higher yielding investments.
While high-interest online savings accounts don’t feel “high-interest” when you compare them to other investments, they do get much better interest than the bricks and mortar bank accounts that you find in your local community.
If you don’t have at least eight months of emergency savings, it’s probably best to start by investing your $100 into a high-yield savings account.
You’re going to want liquidity if an emergency arises and, while many of the other types of ways to invest $100 might allow you to pull out your money quickly, there may be some drawbacks like pulling out of the market too early or needing money in the middle of a loan term. A money market account can even come with limited check writing capabilities to make your money accessible at any time.
Don’t invest it. Period. Keep it in $20 bills in your wallet and have it in reserve in case of emergency or opportunity.
Once you have a fully-funded emergency fund, it’s a better time to do some riskier investing.
If I were starting out right now with just $100 to invest, I would put it in my savings account and build that up about ten times. Once you are able to start with a $1000 investment, a ton of great options will open up to you.
Betterment, is part of a class of investment adviser that provides portfolio management online without the need for much human interaction, called “robo-advisors”.
Instead of having to sit down with a financial advisor and pay them for their time, or pay them by having fees on your investments, robo-advisors ask you a series of questions and then invest your money automatically, based on your tolerance for risk.
There was a time when you would have to invest $100 per month to start a Betterment account, but they have changed that requirement and you can get started with just your $100 investment.
This opens up diversified investing with a personalized touch to just about anyone. You can learn more about them by looking over this great review of how to use Betterment.
Another company in this category is Acorns, which specializes in micro-investing by rounding up the change on your purchases.
I put my first $100 investment into an Acorns account.
Ally Invest (formerly TradeKing) is an online broker that allows you to trade for only $4.95 a pop. That’s not a lot, folks. E*Trade, TD Ameritrade, Scottrade, Charles Schwab, and Fidelity all have higher trading fees.
And here’s the deal: you can fund an IRA or Roth IRA with as little as $100. That’s right, there’s no minimum at Ally Invest, so you have no excuse not to get started investing.
Another great thing about Scottrade is that there are no monthly or yearly maintenance fees – and no inactivity fees! That means if you decide you want to invest 100 bucks and aren’t sure when you can invest again, you won’t pay any penalties for waiting.
You should keep in mind, however, that certain other types of mutual funds do have a minimum: $2,500. So if you’re looking to invest in mutual funds, this could pose a problem. But hey, there are a lot of other options like ETFs and single stocks that you can invest in without the minimum balance.
The bummer about Ally Invest, like many other discount online brokers, is that they don’t provide investment advice for most accounts. However, they do offer a portfolio manager that will help you find new investments based on your risk tolerance.
4. Lending Club
Lending Club is a peer-to-peer lending service. Peer-to-peer lending is just what it sounds like: it’s lending to someone else. Ordinary folks lend and borrow from each other to make a profit. Lending Club is actually the world’s largest online marketplace for connecting borrowers and investors.
I’d take the $100 and split it in four investment sources on Lending Club and then reinvest the profits. Simple, boring and so not rock star.
You can actually make some pretty sweet returns at Lending Club and the good news is you can invest with as little as $25. Plus, there’s no account minimum currently at Lending Club.
I wouldn’t recommend that you invest all of your dough at Lending Club going forward, but it’s a great way to start investing and you’ll learn the ropes of peer-to-peer lending.
5. Your 401(k)
This is the easiest way to invest your money. You can have money taken directly out of your paycheck and deposited into your 401(k), starting with your first $100. This is so simple to do, yet so many people don’t. And hey, if you have a 401(k) match, why not take advantage of it?
If this were my first $100 ever, earmarked for investing, I’d increase my 401(k) contribution to $100, where it would get matched dollar-for-dollar by my employer. Pretty tough to beat an instantaneous 100% gain. 🙂
Keep in mind, however, that you better know what you’re investing into within the 401(k) – don’t you even think about target date mutual funds!
Yes, investing in yourself is one of the best ways to enrich your life – financially and otherwise.
Invest in yourself. The ROI on investing in your own earnings potential is radically higher than “just” buy stocks-for-the-long-run in a Roth IRA. It’s not even close! For young people, investing into human capital crushes the return potential for investing into financial capital.
Sophisticated Spender would use that money to take her mentor out to lunch and pick said mentor’s brain on how they invest – and turn that into a brainstorming session!
I absolutely love the idea to pick a mentor’s brain. Sometimes, just talking with like-minded individuals can really help too.
In fact, I happily pay $7,900 a year for Strategic Coach, but believe me, I was once skeptical that going through a coaching program would actually produce results.
When I finally realized that something was missing from my business and life, I talked it over with my wife. She thought I was already pretty motivated in my business and life and didn’t really see a point in coaching so I could become even more motivated. She had a good point.
But amazingly, after a lot of discussion, she gave me her blessing to move forward and be mentored in the coaching program, and I’ve found it to be hugely beneficial.
The bottom line is that you shouldn’t overlook investing in yourself. And if you don’t believe me, just continue reading all the advice below from these financial experts…
I would use the money to learn a new skill. Sites like Lynda or Creative Live can offer you a good return on your investment.
While investing in a Roth IRA is good, it’s only worth it if you keep investing. Instead, I’d rather take $20 and invest in a knowledge course on Udemy. I’d sharpen my skills in a specific area, then take the rest of the money and advertise my new service to my customers and new customers. If all goes well, that $100 could end up earning me $1,000 in a month or more. That new skill could keep me earning more month after month, which is an excellent way to spend $100. Don’t try to learn something from scratch, just sharpen a skill to make you marketable.
The best investment you can do with only $100 is to invest in yourself through some online courses, like Udemy, that will build skills that will take you further in your current job, prepare you for the next job, or help you to start a side hustle. Building these skills will make you more valuable, thus increase your earning capacity, which will result in more money to invest on a regular basis.
I believe that not everyone is in the position to earn a high income consistently over a lifetime but they can find opportunities for stock-market investing, generate unearned income, and build wealth over time. Plus, the earlier you invest, the earlier you’ll learn about investing and develop your own style, whether active or passive.
Notice that by jumping in and doing a little investing, you can learn about investing and “develop your own style.” Very true. Sometimes, we just need to start small. Great idea, Julie!
Buy a book, a bottle of vodka, and take a buddy out for lunch. The book should be a biography so that you study someone who has done what you want to do. Vodka should be a for wild night out on the town. Take a successful friend out for lunch and pick their brain.
Martin, this is a great idea. I mean the taking a successful friend out to lunch, part. 😉
Speaking of buying books, that’s my next tip…
Books can change lives – why not invest in them?
Want two on my reading list? The Art of Work by Jeff Goins and People Over Profit by Dale Partridge.
Want a few classics that will improve your finances? Here are my picks:
- The Total Money Makeover by Dave Ramsey
- The 4-Hour Workweek by Tim Ferriss
- I Will Teach You To Be Rich by Ramit Sethi
Another expert recommendation came from Alan Steinborn:
I’d take $10 and buy the book Your Money or Your Life. Then I would take $90 and invest in a fund like Betterment or Acorns.
And if you’re looking for bonus points, check out Soldier of Finance by yours truly, Jeff Rose.
To increase my chances of actually being mentioned in the post, I’d have to say go out and buy Soldier of Finance.
Boom. You made the article Steve. 😉
Steve isn’t alone about my smarts:
@jjeffrose taking smart people out for coffee and ask them questions. 🙂
I’m flattered guys, really.
Okay, Steve Chou’s first recommendation was as follows:
I’d buy a year’s worth of Bluehost and start a website.
But, I’m sure he actually likes my book, too. 😉
Speaking of starting your own business though…
8. Your Own Business
Starting your own business can be one of the best things you ever do. The higher up the ladder you are, the more you get paid, and the more control you have. And you can’t go any higher than owning your own business.
I’m gonna take that $100, invest it in a leaf blower and a rake, and start a side business that will make me beaucoup bucks!
True, you can build a business from scratch! Looks like Greg isn’t afraid of hard work!
I would spend it on something that I could sell for more, then continue the process. For instance, buying something at an estate sale that you can turn and flip on eBay or Craigslist.