How to Start Investing With $100
Many people believe they need thousands of dollars to begin investing, but the truth is, you can start with as little as $100. Small, consistent investments can grow significantly over time with the power of compound interest.
Why Small Investments Matter
Starting small builds the habit of investing. It also helps you learn about markets, test strategies, and gain confidence without risking large sums. The earlier you start, the more time your money has to grow.
Smart Ways to Invest $100
- Fractional Shares
Many brokerages now allow you to buy fractional shares, which means you can own a portion of high-value stocks like Amazon or Google. This makes even expensive companies accessible. - Exchange-Traded Funds (ETFs)
ETFs are collections of stocks or bonds bundled into a single investment. They offer diversification at a low cost, making them perfect for beginners. - Robo-Advisors
Automated investment platforms like Betterment or Wealthfront can create and manage a portfolio for you based on your financial goals and risk tolerance. - Micro-Investing Apps
Apps like Acorns or Stash round up your everyday purchases and invest the spare change into diversified portfolios. - High-Yield Savings Account
While technically not an investment, parking your $100 in a high-yield savings account is a risk-free way to earn interest while you decide on your next move.
Example Investment Plan With $100
Here’s how you might allocate your $100:
- $50 in an ETF: Start with a broad market index fund for diversification.
- $30 in Fractional Shares: Pick a company you believe in and buy a portion of its stock.
- $20 in a Micro-Investing App: Automate future contributions with spare change.
Tips for Success
- Set Up Automatic Contributions: Even $10 a week adds up over time.
- Reinvest Dividends: Let your returns grow by reinvesting them instead of cashing out.
- Educate Yourself: Learn about investing through books, podcasts, or online courses.
The Power of Compound Interest
Let’s say you invest $100 with an additional $10 per week at a 7% annual return. After 10 years, you’ll have nearly $8,300. Starting small doesn’t mean staying small—consistent contributions make a big difference.