How to Invest $100

It's no secret that many wealthiest individuals started with a small amount of money and watched it grow over time

21:15 09 February 2023

When it comes to investing, it's no secret that many wealthiest individuals started with a small amount of money and watched it grow over time. With this in mind, investing $100 or less is possible if you're willing to do the work.

You can invest it in several ways if you have just $100. The key is to find a way that works best for you. 

High-Yield Savings Account

A high-yield savings account may be a good option if you're looking for a way to invest $100 to help you build wealth over time. You can earn several times the national average rate on these accounts, which can significantly impact your savings growth.

To find the best high-yield savings account for your needs, compare APYs and compounding frequency. You can also look at minimum deposit requirements and any fees the bank may charge for falling below a certain minimum balance.

Many online banks offer high-yield savings accounts with various interest rates and terms that can be a great place to put your cash. Some of these accounts require no initial deposit or monthly service fees and have APYs that climb above 1.00%.

Stocks

One of the simplest ways to invest your hundred dollars is through stocks. These can be a great way to build a diversified portfolio and grow your money over the long term. However, investing in individual stocks can be risky, so it's important to research and choose companies from various industries.

Brokerage Accounts

A brokerage account can be an easy and low-cost investment method. You can trade stocks, mutual funds, and ETFs with this account. Plus, many brokers offer free trades and no minimum investment requirements.

529 College Savings Plan

A 529 college savings plan is a popular investment vehicle for parents who want to save for their children's future. These plans allow investors to defer federal taxes and gain tax-free interest if the funds are used for education costs.

Robo-Advisors

Investing with a robo-advisor is another option for those looking to start with less money. These digital investment platforms use algorithms to manage your investments and make stock purchases on your behalf. They also provide a wide range of portfolios, regularly rebalance, and often have tax minimization strategies.

Real Estate

If you are interested in investing in real estate, consider real estate investment trusts (REITs). These funds are traded on the market and can offer a higher rate of return than many other forms of investing.

Cryptocurrency

Investing in cryptocurrencies is a growing trend among young people, but it comes with risks. The risk of losing your initial investment is high, and it sometimes needs to be clarified which cryptocurrencies are the best investments.

P2P Lending

If your goal is to diversify your risk, consider investing $100 in peer-to-peer lending. These loans are made between people with varying degrees of credit and income, and they can offer a high ROI.

These loans pay out in installments, and a portion of the money is returned to you through interest payments. This can be a great way to invest your $100 budget, as long as you know you'll have access to the money when it's due and only plan on using it for your purpose.

Certificates Of Deposit

A certificate of deposit, for example, is a type of savings account that offers higher interest rates than a regular savings account and lets you choose your term length. This can be as short as a few months or as long as 10 years.

Investing $100 seems like a small amount of money, but investing it can pay off in the long run. Whether for your emergency fund, to start a small business, or for your retirement, many smart options are available to invest that amount.

Conclusion

It's important to remember that your goals and risk tolerance are the most important factors in deciding what type of investments you should make with your hundred dollars. For example, suppose you have a long-term goal, such as retirement. In that case, it makes sense to invest in a portfolio that consists of stocks and other risky investments. On the other hand, stick with safer assets such as CDs or money markets if you have a shorter timeline and focus on paying debt or building an emergency fund.