So, you’ve decided to invest some money. But is it even possible to start investing with only $100 or even less?
There are new apps and sites that now allow you to start investing with as little as $5. You can even diversify your investments with that little money!
Traditionally, you would need a lot more money to either buy into a diversified mutual fund or buy stocks separately to create a good portfolio.
Being able to do the same with just a fraction of the money today is a great opportunity. So take advantage of it.
As with most things, the hardest part is just getting started. Once you start investing, it is easy to keep going, especially if you do it automatically.
Check out the options below to see if one would be a good fit for you, your comfort level, and goals.
Minimum Investment: $0 to open an account, but need $5 to start investing
Cost: $1/month for balances under $5000.
Acorns is an app that allows users to participate in micro-investing. The Acorns app will automatically invest spare change or you can make recurring deposits or even one-time contributions.
It works by having users connect any number of their credit or debit cards to the app. Then the app rounds up purchase prices and invests the difference. So, if you make a purchase for $12.25, Acorns rounds up the charge to $13, and 75 cents is invested.
Acorns does investing for you based on your risk tolerance so you don’t have to choose your investments. This is an easy way to automatically save money for investing and have a diversified portfolio.
Do I need to say it? If you don’t pay off your credit cards in full each month, this isn’t a good option for you.
Minimum Investment: $0
For accounts under $10,000, 0.35% annual fee with $100/month recurring monthly deposit OR $3/month (if no recurring deposit). Update: 0.25% annual fee. There are no trade or transaction fees.
Betterment is an automated investing service, otherwise known as a robo-advisor. Clients can have multiple accounts for different goals. For example, you could have a goal of saving for a house down-payment in one account and have another account for your IRA.
The portfolio suggestions for each would vary based on timeline and risk assessment, making investing decisions that much easier.
Minimum Investment: $5
Cost: $1/month for balances under $5000, no trading fees. First three months are free.
With Stash, you link one bank account to the service. Investment recommendations are based on answers to a questionnaire on risk tolerance, types of causes you want to support, and goals. However, there is no set portfolio. Instead, you choose the final investments.
Vanguard Brokerage Account
Minimum Investment: Cost of one share of an ETF, bond, stock or CD you wish to purchase (some are less than $100)
Costs and fees: $20 annual account fee that can be waived if you opt to receive communications and statements electronically.
Vanguard has a stellar reputation. While most people think of Vanguard as a brokerage for retirement accounts and low-cost mutual funds, you can also have a standard brokerage account with them. In the brokerage account, there are no commissions on trades of Vanguard ETFs. If you choose to invest in other ETFs, online trades are $7 each (still a good deal) for up to 25 trades per year. Investment fees are a low 0.05%-0.34%, which is lower than most. If you don’t have $3,000 to invest in a mutual fund, the ETFs are a good option and some are still priced below $100.
- 21 Common Investment Terms You Should Know
- Money Basics: The Ultimate Beginner’s Guide to Mutual Funds
401(k) at work
Set up an automatic deposit from your paycheck at work to your 401(k). Even better, the contribution is a pre-tax one.
Invest in yourself by taking an online course to sharpen your skill set. You can then use that skill to negotiate a raise, use as a side-hustle or even get another job. Courses can be found at Udemy, Coursera, Codecademy, Lynda, and more.
Putting $100 towards paying down your debt just might be the best investment option. Put the money towards the debt with the highest interest rate to have it work even harder for you.
Investing with only $100
It may seem like investing $100 isn’t much, but you need to start somewhere. And then keep investing. A little bit here and a little bit there can add up over time.