16 Ways to Invest $100 I gave suggestions on how to invest
when you have just a few dollars.
In this article I want to take it up a notch, which is to say
how can you invest when you have more than a few dollars, but
not the thousands that traditional investment vehicles usually
require? You can also check out my post on the
best short term investments for your money!
I was surprised – shocked really – that I could start investing
in the stock market via mutual funds with only $50 per month.
And that’s exactly what I did. Even though I later found
out that the mutual funds were okay at best, the fact that I
started investing in myself was huge for me.
And for many, it’s that first step that prevents them from
amassing wealth later on.
For our purposes here we are going to define small amounts
of money as something more than $100, but not more than
$1,000. Based on that parameter, here are 15 ways to invest
small amounts of money. Do you need help finding some extra
cash to get started with your investment? Check out these tips
to make money fast!
1. Bank Investments
To be sure, you won’t be able earn much money on your
investments at the bank, at least not in the current investment
environment. However, the advantage that banks offer is that
you can invest very little money (in money market accounts or
certificates of deposit), earn a little bit of interest on your
money, and have virtually zero risk of principal loss.
Let me be honest, these are not the most exciting investments,
but the best purpose for bank investments is to use them as a
place to accumulate a larger amount of capital for higher
risk/higher reward type investments later on. Some of the
investments in this list will require $500 or $1,000 to get
started. While that is not a ton of money, if you are getting
started with a smaller investment, your best bet might be to
take your time to build up a little cash and expand your
There are a number of “robo advisors“, online investment
platforms that offer professional management of your portfolio
with very low fees. One of the best for small investors is
Betterment. You start by completing an online
questionnaire that enables the site to determine what your risk
Based on that evaluation, a portfolio is created for you with
an allocation that includes several different exchange traded
funds (ETF). Because of this allocation, your only
responsibility is to fund your account – there is no need to
concern yourself with investment selection, or with
re-balancing your investments.
Betterment investments actually hasn’t no minimum initial
account deposit requirement. You can open up an account by
committing to monthly contributions of as little as $100. The
annual management fee to maintain your account is 0.35% of your
account balance, on accounts of less than $10,000. The
management fee works on a sliding scale, and drops as your
account balance grows.
3. Lending Club
Club is an online peer-to-peer (P2P) lending platform in
which borrowers come to get loans, while investors – a.k.a.,
lenders – provide the cash for those loans. In
exchange, investors are rewarded handsomely for their
investment. Rates of return in double digits are hardly unknown
with Lending Club.
You can invest as little as $25 in a single loan (or note),
which means that with the $1,000 minimum initial investment,
you can spread your portfolio among 40 different notes.
The limitation with Lending Club is that many states have
minimum net worth requirements in order for you to invest on
the platform. So while the actual amount that you can invest is
small, you might still need to show a significant asset base in
order to participate. If you are interested in more
details on investing with Lending Club check out my
Lending Club review.
Motif is a
different kind of investment platform, one in which you either
build or invest in existing mini-mutual funds that are based on
a certain investment criteria. These mini mutual funds are
called motifs, which is where the platform gets its
For example, you can invest in a motif that is built on solar
energy in Hawaii, or trash recycling in Panama. There are
literally hundreds of motifs available and to learn more about
those, study a Motif
Review, and if you can’t find what you like, you can always
create your own.
The minimum investment is $250, which is the minimum to invest
in any single motif. Each motif can be invested in as many as
30 different securities, and there is a transaction fee of
$9.95 to either create a new motif, or to invest in an existing
Motif sponsored the
Grow Your Dough Challenge 2.0 which where I and 20 other
bloggers are dueling it out to see who can grow a $500
investment the most over a year’s time. Here’s a look at the
leaderboard to see how we’re doing. (Hint: I’m not
in the lead. Not even close!)
5. Paying Off Debt
There are two reasons for leading off with the suggestion to
off debt. The first is that you shouldn’t be investing
small amounts of money if you have debt, especially unsecured
debt or have money
to save for emergencies.
The second is that paying off debt is one of the very best ways
to lock in an above average and guaranteed rate of
return on your money. This is especially true if the interest
charge on a credit card balance is in double digits – there are
no places available to the average investor to get double digit
returns that are guaranteed.
Let’s say that you have a credit card with a balance of $1,000
with an interest rate of 15.99% per year. By paying that card
off, you’ll lock in a nearly 16% rate of return on your money,
You can make that card go away faster by surfing the balance to
one of the many
credit cards with 0 interest. This way each payment
goes directly to the balance on the card and not to interest
(these offers only last a limited time so pay them off fast!).
6. Your Employer Sponsored Retirement Plan
This is probably the easiest way to invest small amounts of
money, or even if you don’t have any money at all. That’s
because it’s generally set up as a payroll deduction, so that
you can allocate a percentage of your paycheck to go to the
You can designate just about any amount of your paycheck that
you choose – as low as 1% to 20% or more, depending on the
rules established by the employer plan. In this way, you don’t
even need to have a large nest egg to invest. You can just add
small amounts to your account with each paycheck, and then
begin investing in any types of investments that your available
capital (and the employer plan) will permit.
Best of all are the tax benefits! Not only are your
contributions tax-deductible, but the income earned on your
investments will not be subject to income tax until you retire
begin withdrawing money. In addition, if your employer offers a
matching contribution, it will be like you get
free money just for saving a little.
No matter how much money you have to invest, investing in your
employer-sponsored retirement plan should be one of the first
steps you take.
7. Your Own Retirement Plan
If you don’t have employer-sponsored retirement plan, you can
almost always set up your own retirement plan. All you need to
qualify is earned income. The two best plans for most people
are either a traditional IRA or a Roth IRA. Much like an
employer-sponsored retirement plan, any returns on investment
that you earn are tax-deferred until you begin withdrawing the
funds in retirement.
Also, contributions to a traditional IRA are generally fully
tax-deductible. Roth IRA contributions are not tax-deductible,
however withdrawals will be free from taxes as long as you are
at least 59 ½ at the time the withdrawals are made, and you
have participated in the plan for at least five years.
And though there is no employer matching contribution (since
there is no employer), a self-directed traditional or Roth IRA
can be held in a brokerage account that offers nearly unlimited
You can contribute up to $5,500 per year to either a
traditional or Roth IRA ($6,500 if you are age 50 or older),
which means you can build up a substantial portfolio in just a
few years. Also with the
best Roth IRA providers there is very low entry cost.
much the same as Lending Club. You can invest as little as $25,
so you can spread a few hundred dollars across many different
loans. There is also a state-by-state minimum net worth
requirement here as well.
Prosper reports that the average annual return on a note
approaches 16%, which is an incredible return on a fixed rate
In the case of both Prosper and Lending Club there is risk of
loss to your principal in the event that one or more loans
you’re holding goes into default. There is no FDIC insurance
protecting your investment the way it would with bank
investments. I also did
Prosper reviews for both borrowers and lenders. You
can get full details of the platform there.
9. US Treasury Securities
If you are looking for a more conservative investment, one
where your principal is protected from market swings, you can
invest in US Treasury Securities. These are debt obligations
issued by the United States Treasury Department, to fund the
national debt. Securities have maturities ranging from 30 days
to 30 years (longer term maturities do involve a risk of
principal if you sell before maturity).
You can invest in these securities through the US Treasury’s
Department’s portal Treasury Direct. By using the portal,
you’ll be able to buy US government securities in denominations
as low as $100. You can sell your securities there as well, and
there are no early withdrawal penalties for doing so.
You can also use Treasury Direct to buy Treasury Inflation
Protected Securities (TIPS) too. These not only pay interest,
but they also make periodic principal adjustments to account
for inflation based on changes in the Consumer Price Index.
10. Investing in Your Own Skills
Are there any skills that you could acquire that could bring
you up to the next level in your career? Think in terms of
learning a new computer application, a foreign language, or
taking a public speaking- or sales-course.
It’s possible that you could acquire certain career enhancing
skills that would enable you to either get a promotion on your
current job, or even transfer to a new, higher paying position
with another employer. A few hundred dollars is often all it
takes to take a course to learn that kind of skill.
11. Dividend Reinvestment Plans
Better known as DRIPS, these are plans that allow you
to invest small amounts of money into stocks of companies that
pay dividends. Many large companies offer DRIPS, so if you want
to invest directly in stocks, and you like certain companies,
you can invest in those companies – usually without having to
pay any kind of investment fees.
DRIPS typically allow you to build your investment over time by
making periodic contributions. Often, this can be done using
payroll deductions. This can also be an excellent way to dollar
cost average your way into large investments in major
companies. And when you earn dividends, the money will
automatically be reinvested to buy more company stock.
12. Low Minimum Investment Mutual Funds and ETFs
Different mutual funds and ETF’s have different initial
investment minimums. Many do require that you have several
thousand dollars to open an account, but there are some that
allow you to start an account with far less.
For example, there are some funds available
through Scottrade that require a minimum as low as $100. An
example is the Schwab Total Stock Market Index (SWTSX). With a
required minimum that is that low, you could spread $1,000
across 10 different funds.
You can check with any large mutual fund families, and even
some investment brokerage firms, to see which funds are
available with a minimum initial deposit of $1,000 or less. You
may find index funds to be your best bet, since they represent
the best play on the entire market.
13. Loyal3 For Individual Stocks
Loyal3 is a limited
investment platform, but an excellent place to start for a
small investor. To begin with, you can invest in stocks with as
little as $10. Loyal3 even allows for the purchase of
fractional shares. The platform offers you an opportunity to
purchase stock in one of the 66 companies they currently have
available on the site. But those companies represent virtual
household names in stocks – Microsoft, Apple, Walmart, Time
Warner, and many more. And you can both buy and sell those
stocks with no commissions or other transaction fees.
The disadvantage is that it is not a diversified investment
platform. You can only invest in the stocks that they have
available on the site. There are no mutual funds or ETF’s, nor
any bond offerings. However, the low minimum initial investment
and the absence of fees, makes Loyal3 a perfect platform for a
small investor to purchase stocks in major companies.
14. Online Brokerage Firms
It can come as surprise to many small investors that you can
actually open up an account with an online brokerage firm with
$1,000 or less.
For example, the minimum initial deposit to open an account
with Charles Schwab is $1,000 but even that can be waived if
you set up an automatic monthly transfer of $100 through direct
deposit or Schwab MoneyLink or open a Schwab Bank High Yield
Investor Checking account linked to your brokerage account.
The advantage of investing through a brokerage firm is that
will provide you with a wider variety of investment choices
than you can generally get through direct investments alone.
Check out some or our great investment brokerage reviews for
your reference: TradeKing
15. Your Own Business
I’ve discussed investing in other businesses so far, but if
you’re looking to invest small amounts of money, investing in
your own business could prove to be the best choice of all.
After all, who better to invest in than yourself?
For example, for a few hundred dollars you can buy a decent
lawnmower, and start cutting lawns to generate income.With that
few hundred dollar investment you could have more than
five thousand dollars to invest in no time.
You could also start a website, dedicated to selling a certain
product line. Or you can start a blog and use it to create
affiliate sales arrangements. If it’s something you might enjoy
doing, you could go to garage sales, estate sales, flea markets
and thrift stores, and by unusual goods and sell them at a
profit on eBay or Craigslist.
With advances in technology, and the growth of the Internet,
it’s easier than ever to start your own
home based business on a shoestring. If you only have a few
hundred dollars to invest, investing in starting your own
business could be the most profitable venture of all. Many
business owners start out by picking up a part time job or side
hustle to make extra cash to get their business up and going. A
great side hustle is to
become an Uber driver, you can create your own schedule and
just sit back and drive and earn extra cash to throw at that
dream of yours!
So here you have 15 ways to invest small amounts of money, so
there’s nothing stopping you from investing in something. Investing
is one of those activities where the most important step is
getting started, and here are the ways you can do it.
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