Do you have only $100 or less to start investing? Don’t worry! While it may seem like a minuscule figure, do not let it stop you from taking the first step toward the investing domain.
Note that every financial journey has to start somewhere, and the sooner you embark on yours, the more time you will have to extract the rewards. With a carefully planned investment strategy, even a $100 investment can ignite a powerful chain reaction towards a prosperous future, slowly but surely building your wealth over time.
But, first of all, you should determine what your ultimate financial objective is and how long can you wait on your investments. Further, you must also assess how much time and effort you’re willing to dedicate to this cause. Are you someone who prefers to sit back and watch your investment grow passively, or are you more hands-on and enjoy the thrills of active investing? And needless to say, determining your risk tolerance is also a key factor in deciding how to allocate your capital effectively.
Once you have nailed down your investing strategy by answering the aforementioned questions, it’s time to choose the perfect method for investing your $100 from our curated list below. In this guide, we have listed the 6 best ways to start investing with $100 that can help you maximize your earnings and relish the rewards in the long run.
1. Invest with a robo-advisor platform
Probably, one of the best ways to kickstart your investment journey with low capital as well as minimal experience is by joining a robo-advisor platform. These automated financial advisors are designed to craft tailored investment portfolios based on key factors such as your age, income level, and risk tolerance.
As they automate every step of the investment procedure from asset selection and trade execution to portfolio updates, these robo-financial advisors offer a perfect solution for those seeking a hands-off approach to wealth management. Typically, they create expertly crafted portfolios that encompass a diversified blend of ETFs, bonds, stocks, and mutual funds, adjusted to match your desired risk mode – whether that is conservative or aggressive.
Overall, robo-advisors are certainly a good option for putting your $100 to work without any active effort required.
2. Invest in fractional shares
If a passive approach is not your cup of tea, buying fractional shares is also a reasonable option to start investing with a limited budget.
With the cost of some popular stocks sky-high, fractional shares provide a way to snag a portion of stock shares in a low-cost way. This means that by purchasing fractional shares, you can gain access to popular companies that would normally be beyond your financial reach. Ultimately, it is a pocket-friendly and high-reward strategy that is indeed worth considering.
However, note that when it comes to investing in fractional shares, it’s crucial to select a brokerage forum that includes low transaction fees to not let your potential profits dissipate.
3. Invest in Exchange Traded Funds
Another intelligent way to utilize your $100 is to invest them in ETFs. Exchange traded funds (ETFs) are investment vehicles that mirror the performance of index funds, such as the S&P 500, US30, or Nasdaq.
With their diversified and risk-managed approach to investing in the stock market, these basket of securities can provide you with an attractive starting point for your investment journey. Moreover, ETF investment is also suitable if you tilt towards a more hands-off approach.
4. Invest in emerging, high-potential cryptocurrencies
Cryptocurrencies have taken over today’s financial landscape as they offer an alluring opportunity to invest your $100. Surprising as it may sound, there have been numerous instances where digital coins, once valued below a cent, have soared in value, rewarding early investors with monumental profits. But, to harness the full potential of this investment avenue, you must dedicate sufficient time and actively conduct thorough research to identify high-potential projects.
However, beware! Cryptocurrencies are categorized as a high-risk asset class and there is no assurance that your investment will appreciate in value even after extensive analysis. When dealing with these intangible assets, it’s important to acknowledge the potential for financial losses. It’s advised to approach with caution and only if you are willing to assume the associated risks.
5. Invest in a high-yield savings account
If you find the fluctuations of the stock market or the unpredictability of cryptocurrencies to be unsettling, it may be prudent to consider exploring the stability of savings accounts as a potential investment opportunity for your $100. Although historically, banks have offered measly interest rates on savings accounts, the current economic climate and soaring inflation rates have caused a noticeable shift, leading to higher interest rates.
While $100 stashed away in a savings account may not offer you remarkable returns, it can still prove to be a trusty lifeline in times of need.
6. Invest in yourself
It may appear that this last method leans more towards the philosophical realm rather than the practical, but in reality, dedicating resources towards enhancing your skills can prove to be a fruitful investment in building wealth.
The act of investing in oneself encompasses a wide range of activities, such as enrolling in online courses or purchasing informative books, all of which can equip you with the knowledge and proficiency required to make savvy financial decisions.
Pro tip: Making regular contributions is crucial!
Although investing $100 is a commendable beginning, it’s important to be realistic. There is a limit to how much a $100 investment can yield without involving excessive risk. Therefore, to accumulate significant wealth over time while minimizing risks, it is advisable to regularly inject small amounts into your investment portfolio. Fortunately, nowadays, many investment platforms integrate an “auto-invest” facility that automatically invests your funds according to prespecified conditions, making it easier than ever to build a healthy portfolio over time.
In this way, your investments will begin to snowball, gradually but steadily, building upon themselves and generating multiplying returns. This will smoothen your path to financial independence, allowing you to enjoy the results of your efforts at a later time.