You may think you have two options when you have a $100 bill in your hand, spend it, or save it.
‘There is more than one way to skin a cat’, in this case there are literally hundreds of different options you have when deciding what to do. I think you should invest it! Investing doesn’t just mean buying a few shares and hoping they increase in value, the multitude of opportunities you have these days makes it possible for you to generate income with a small initial investment.
Most of the investment vehicles out there do not require you to have thousands of dollars, in the past investing was reserved for the people at the top of the tree. If you go into the office of a financial advisor and tell them you have $100, they will probably show you the door. The reason for this is because these advisors make a commission (typically 1%) of what you have invested with them, and $1 just isn’t worth it for them.
For the options below you don’t need a fancy advisor, you don’t $10,000, and you don’t have to work 24 hours a day to make money.
Investing $100 online
Like I said, you don’t need a financial advisor, you can get all the information and services from an online brokerage account. I’ve also got some good news… The options are better now than they’ve ever been before.
When I opened my first online trading account you needed to put a minimum deposit of $500 and pay a commission of nearly $7 per trade.
You can start investing your money now with an initial deposit of less than $100! With little to no commission costs! And 24/7 support via apps, online chat, or telephone. Here are our top choices for the Best Free Investing Apps.
Is investing $100 worth it?
You could have a night out with your friends, buy yourself a new outfit, or get a new piece of tech. What is the point of investing such a small amount of money?
As soon as you begin to invest, you have made a decision, a decision to transition from somebody who is living day to day, to somebody who is planning and preparing for tomorrow. What you plan for is up to you, a new home, education, a holiday? It doesn’t matter, the point is, you have started.
The amount you start with doesn’t matter, it’s what you finish with that makes all the difference.
Warren Buffett is one of my idols and just so happens to be considered as the most successful investors of all time, with a net worth of almost $100 billion you can see why I talk so highly of him.
Warren Buffett was once in an elevator with a few other people and he noticed a penny on the floor, when the doors opened and everyone stepped he took a knee and picked up the penny while the others stood and watched. As he walked past his colleagues he muttered “the beginning of the next billion”.
Buffett is the last person that needs to pick up spare change from the ground, but that doesn’t stop him. He understands that his actions increase his wealth and it’s the principle behind it that counts, not the amount of money he stands to make. The action to start investing is more significant than the amount of money you start with… You can always add more later!
With all that said, let’s get you started with some ways you can invest $100
#1 - Robo Advisors
The financial advisors we mentioned before hate this form of investment because it’s making their jobs unnecessary. These robo advisors use algorithm based investing platforms where your money is invested based on what goals you want to achieve. Instead of a human doing all the hard work, it’s technology.
Here’s the result, a cheap advisor that will take as little as $100. Here are a couple of examples of robo advisors.
Betterment is a US only robo advisor, it is considered the best on the market with a $0 minimum investment. The program is so popular because it is cheaper than most of it's competitors, the standard digital account has a yearly fee of 0.25% of your account balance. Bearing in mind the portfolios offered on Betterment claim to get 1.78% yearly returns, you come out with a healthy profit.
This is most passive way you can invest your money in 2020, all you do is make a deposit, choose a plan, then hopefully watch the money grow.
The major pros of using Betterment are the low costs, also how the system diversifies your investment through various stocks and government bonds to minimize risk. However the only draw back is it is not for DIYers, if you like to have control of your money and invest in what you like, Betterment is not the way to go.
Wealthify is the U.K's equivalent to Betterment. Using Wealthify your money will be invested in several funds, which are a collection of investments and therefore offer cost-effective exposure to global financial markets. Wealthify differs from its competitors slightly in that the company uses ETFs and mutual funds, both of which are low-cost and passive investments.
The cost of Wealthify is slightly more than others, but they allow you to start from £1 and grow this over time. The yearly fee is 0.7% of your account balance.
The number one way to see if Wealthify is for you is to use there prediction tools. This is a estimate of how much your investment would grow in a set time, depending on how much you start with, how much you add, and which plan you have chosen. In 2017 Wealthify released these figures: The one year performance of each plan are as follows - Adventurous (28.5%), Ambitious (22.25%), Confident (18.28%), Tentative (11.86%), Cautious (8.86%).
#2 - Pick Your Own Stocks
If you want to be more of an active investor this is the way to go. This can be the most exciting and fun ways to invest, but we recommend doing some research before you get started. Here is another article we have that might help - Understanding stock market investing!
Stock market investing has not always been the easiest to get started in, it was traditionally done via a personal stock broker or online discount broker. You would call up your broker on the telephone and they would place trades on your behalf. This was a very expensive way to invest in stocks with commission cost of more than $10 per trade.
Now the stock market world is ruled by online brokers. There are now an array of free investing platforms out there, the most popular platforms are… eToro, M1 Finance, and Webull. You can see how they compare to each other right here: Webull vs eToro vs M1 Finance: The best commission free trading apps
These three platforms allow you to trade stocks, ETFs and indexes on the major exchanges for free. Zero commissions and no fees. These are the only requirements to sign up to these platforms:
- Webull - $100 minimum deposit, if you use Business Minded exclusive link you get a FREE STOCK once you account has been verified. Just Click HERE!
- M1 Finance - $0 minimum deposit.
- eToro - A little bit more expensive, first minimum deposit of $250, but you gain access to an education centre where top traders share their portfolios.
Here’s the thing, M1 Finance has a lot of features, but this is why M1 Finance kicks the others to the curb. If you want to buy an Amazon share it would set you back $1,760 as of the 12th December 2019. As we have been discussing you only have $100.
M1 Finance is the only broker you would be able to invest $100 in Amazon stock, with M1 Finance you can purchase as little as 1/10,000th of a share, so $100 can take you a very long way. Also you can fully automate your entire portfolio including dividend reinvestment.
Most people will find that the features on M1 Finance are superior to any other platform on the market, I would undoubtedly agree to this statement.
#3 - Start Your Own Business
You might have an idea for a business that you haven’t had the motivation to get started. This year is your chance! And with business, start up cash is always needed, whether it’s to buy a website, inventory, or pay for marketing material.
Aside from selling candles and water bottles to your friends on Facebook, what business could you start with $100? There are more than a few, and some of the are listed below:
- Blog/YouTube channel
- Rent a truck and do deliveries/junk removal
- School tutoring, or exam teacher
- Sell a course on Udemy
- Child care
- Social media marketing
- Window cleaning
- Event planning (Wedding planners are paid on average $5000 for a full service)
For the best side hustle and how to start them, check out our article: Why you should start a side hustle
#4 - Real Estate
Crowdfunded real estate investing is on the rise, and you may think investing in real estate is not for the $100 investor, but you’re wrong.
Platforms like Fundrise allows you to pool money together with other investors to invest in real estate projects. I’m sure you know someone who has made money from real estate, normally this is by purchasing properties and then renting them to the public. While this is a great investment, there’s a problem, it’s expensive.
Thanks to crowdfunding platforms, you can invest in real estate projects with others without giving up thousands of dollars. This type of real estate investment is 100% passive, just watch your investment grow.
If you own a house and rent it out to someone you will have a very active income source. You will get calls out the blue with problems to solve, you have to buy insurance, furniture, and most importantly, if your tenant doesn’t pay rent, you are out of money and you may have to go through the long, time consuming process of eviction.
With crowdfunding, you own a small percentage of thousands of different properties. You don’t need to worry about vacancies or evictions.
#5 - Invest In An FDIC Insured CD
Savings accounts are good, but Certificate of Deposit through your bank is better. Most of these bank investments have a minimum of $100. I opened a CD with a $500 deposit, this was a 12 month CD that renewed annually. I earned an interest rate of 0.5% on the short term CD, meaning I made $2.50 per year. Big Bucks!
Most people don’t want to make $2.50 per year, but the reason people use CD is earn a better interest rate than a regular savings account. Bank CD’s are FDIC insured for up to $250,000 meaning there is no way that you could lose money by investing in one.
If you are a young person and you don’t need the money you are investing, you should look past the bank CD. The interest rate will not outpace inflation, and you will lose the buying power of your money. There are better options for small amounts of money.
#6 - Invest In Yourself
Small investments to make yourself better can go a long way, learning a new skill can generate huge returns in the long run.
Some I’ve outlined below:
- Spend $100 on a new suit for your interviews
- Buy some books or get a library card, here are 7 Investing books everyone should read
- Learn a new skill via an online course on Udemy
- Find someone you look up to and take them to lunch (ask lots of questions)
- Invest in your health by going to the gym
If you need a new job. Often times, when it comes to an interview your first impression will determine if you get the job.
You can invest in your look by getting a haircut, or get a lesson from an interview expert that will show you the best tips to get your foot in the door. Read our 15 Unique interview questions to read up on what’s coming.
Don't Invest In These!
You can do whatever you want with your money. You might decide to follow one of the strategies above or continue saving. The last thing I want you to do is follow bad advice and fall into traps. We want you to have the best chance at success, so please don’t invest your hard earned cash in anything from the list below.
- Avoid penny stocks: They are cheap for a reason, they don’t always follow the general trend. Stick to companies on the NYSE or NASDAQ.
- Watch out for multi level marketing schemes: This means paying for a product, then pestering your friends and family to buy it for a profit. This is not a business, it’s a scam.
- Don’t use it as a down payment: Making a down payment on a car is like buying debt. The car will half in value as soon as you drive it off the lot, and you’re stuck with 3 years worth of payments.
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