How to start investing with a small amount of money? For most of the people, just throwing 10 thousand into the stock market isn’t a regular thing. There are probably people out there who want to start their journey of investing, but don’t know where to begin. I will list here a few things that can get your investing journey started for 100 dollars or less.
- Index funds
- fractional shares
Invest 100 dollars into index funds
First on my list is my personal favorite. Index funds. They are already well diversified so that will lower the risk compared to investing straight into stocks. Some brokers will offer index funds with really low fees or even no fees.
The good thing about index funds is that there is not really a solid price you will have to pay (or at least the ones I invested in don’t have). You can just choose whatever amount of money you want to put into the fund. In this case you could put 100 dollars into one fund or diversify it between 2 or 4, your choice. The minimum amounts aren’t usually that big, so you could easily get started with just 100 dollars with index fund investing.
If index funds sound like the right option for you, you might also wanna read a post comparing passive index funds with active funds. If so, you can read it here.
Invest 100 dollars into fractional shares
Some investing platforms offer fractional shares. Meaning, even if Tesla stock was trading at 1000 dollars per share, you could buy 1/10 fraction of a share for 100 dollars. Even better if the broker uses spreads so the fees don’t eat up so much of your initial capital.
The same thing applies with other stocks. You can buy fractional shares of other companies as well. Let’s say, for example, you put 10 dollars into 10 different stocks. Diversifying will lower the risk when investing.
Getting started with investing and doing some research about companies can really be a fascinating experience. There is so much to learn about the world of investing and how the different instruments work. With fractional shares, you can really test the waters with very little risk.
Learning what different numbers on the company’s balance sheets mean is truly something. Don’t let this scare you. If you don’t want to learn all the complicated stuff, there are ways to invest without having to spend much time reading and learning about different concepts, such as index funds.
I have a post about how to start investing in stocks, you can read it here.
Invest 100 dollars into cryptocurrencies
Cryptocurrencies have been the hot topic for the past year or so. Investing in cryptocurrencies such as Bitcoin and Ethereum have become much more popular over time. Today, it is definitely not as hard to start investing in cryptocurrencies as it was 10 years ago.
Today, you have multiple different investing platforms to enter crypto markets. Ones you could go with are Binance and Coinbase. They are pretty big players in the cryptocurrency field, so those would be my choice to go with.
I would suggest sticking with the bigger cryptocurrencies like Bitcoin and Ethereum. This is because there are so many scams in the crypto space and rug pulls are not that rare. Just because someone on Twitter is saying this new coin is “going to the moon”, it doesn’t necessarily mean that it is.
If you happen to lose your investments in a situation like rug pull, this could demotivate you and even stop you from considering to invest again. Please keep the amount you put into cryptos small enough so you don’t lose your sleep over it, or at least do really good research about where you are putting your money into.
I’m sure there are plenty other ways you could spend 100 dollars, but now I wanted to do how to invest the 100 dollars. Sure, some could say taking a course for that 100 dollars or buying books with it could count as an investment in your future. This post was about things you can just put your money on and “forget” it.
When starting with 100 dollars to test the waters, it doesn’t really matter which one of these options you will go for. Even if I would consider cryptocurrencies the riskiest one on the list, you wouldn’t fall from high even if your portfolio of 100 dollars took a hit.
And let’s be real, 100 dollars isn’t going to make you rich, but it is enough to get you in to the game. You can try it out small at first so you get the hang of it. You can learn a lot just with that 100-dollar investment. Then if you choose to continue increasing your portfolio size, then you can expect bigger returns as well, since you are risking more.
Other investing-related posts can be found here.
Thanks for reading, hopefully this was helpful. Have a wonderful day.
This is not investment or financial advice. Past returns are not a guarantee of future returns. Please do your research before risking your hard earned money.