Contrary to popular belief, you don’t need to have millions of dollars to begin investing in the stock or real estate market. In fact, you can start investing if you have $50 to spare every month. This guide focuses on the ways you can start your investment journey with at least $100.
Is $100 enough to make money off investments?
In general, the more money you invest, the greater the potential profits. You need a significant amount of money to make even more. It also allows you to diversify your investment portfolio, which is essential to making profits and maximizing the opportunities in the market.
A lot of people think that you have to be wealthy before you can start investing. While some investment tools do require a big figure to get the ball rolling, there are others where at least $100 is enough to get started.
The best thing is that once you achieve that first $100 investment, it’s easier to grow your investments from there. The key is to simply begin – and this guide will help you explore your options.
How to Start Investing with $100
When it comes to investments, starting small is better than never starting at all. Some of the investment options below don’t even need you to have cash on hand. For instance, you can kickstart a number of these with the help of your payroll account.
Start growing your $100 investment in several ways:
Open a savings account.
While you won’t earn a significant sum when you invest in a bank, the advantages it offers are worth the effort. Aside from having a secure place for your money, a savings account will also provide a way to earn a little interest with zero risks of loss. One way to maximize these benefits is to store a large amount of capital in your account for investments with high rewards later on.
Establish your retirement plan.
Don’t let time pass without a retirement plan in place. If your company doesn’t implement an employer-sponsored retirement program, secure your own. Earned income is all you need to qualify.
Most experts recommend a Roth IRA or a traditional IRA, as any returns on investment that you acquire with either plan, are deferred until you retire. You can contribute up to $5,500 per year, which can contribute a lot to your portfolio in the coming years.
Get in Dividend Reinvestment Plans.
Dividend Reinvestment Plans (DRIPS) are offered by numerous large companies. They enable individuals to invest in their stocks that pay dividends, often helping investors develop their investments over time with periodic contributions. This is typically done through payroll deductions.
Simplify real estate investing with trusts like Fundrise.
Fundrise is a real estate investment trust that lets you invest in properties without becoming a landlord or flipping houses. Instead, your money is spent on real estate investments. Whenever the project they invested your money into earns, you also make money. The returns vary depending on the project.
Explore online investment platforms.
There are now online investment platforms that provide expert portfolio management with low fees. It’s a great must-have for budding investors, as it has no minimum initial account deposit requirement. You don’t have to worry about taking out a significant sum to get started. Just complete an online evaluation. It will allow the site to gauge your risk tolerance and create your portfolio.
There are many such platforms you can now choose from. For accounts of less than $10,000, one of the platform’s management fees is 0.35% of the current balance. The price operates on a sliding scale, which means it diminishes as your account balance grows. Different platforms offer different rates and benefits, so take the time to evaluate each one before you decide.
Open an account in online brokerage firms.
Once you have a bit more than $100 to spare, try to explore online brokerage firms. Yes, you can do this with $1,000 or less! Getting affiliated with online brokerage firms will give you access to a wide selection of investment opportunities that are typically open to those involved in direct investments.
Explore the pros and cons of your options before opening an account to find the best one. TD Ameritrade and E*TRADE for instance, have no minimum initial deposit. On the other hand, you can waive the $1,000 initial deposit requirement when opening an account with Charles Schwab if you set up a monthly transfer of $100.
Easy Ways to Save Up $100 for Your First Investment
Don’t have that first $100 to invest yet? No need to put that amount together in one go. Just like investing, it’s alright to start slow and small. Simply redirecting some expenses will get you closer to that $100 goal.
Try these ideas:
- Fan of coffee? Skip the fancy stuff and start making your own coffee at home. It’s cheaper, and you can save tons of money without buying your daily cappuccino from a coffee shop.
- Try ordering less fast food. Not only is fast food unhealthy, but the delivery fees can cost you a fair amount as well. Start grocery shopping and cooking your own meals instead!
- Maximize your grocery budget with meal-planning. It’s still easy to go over-budget even when you’re cooking at home. Meal planning gives you a complete look at everything you need for your meals, instead of getting random stuff from the shelves. Everything you save in terms of food, you can direct straight to your retirement funds.
- Set up direct savings. Some banks allow you to automate your savings. You can designate a small amount to be subtracted from your paycheck every time it hits your account. Automating your savings, even a small amount monthly will get you to that $100 goal faster.
Now here’s the secret— don’t stop these strategies once you reach $100. Continue funneling these amounts into your investment fund, so you can begin investing bigger and growing your money faster— all from the $100 you started with.
Tycoono, LLC and its affiliates do not provide tax, legal, financial or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, financial or accounting advice. You should consult your own tax, legal, financial and accounting advisors before engaging in any transaction. Please refer to our disclaimer for more information.