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Investing can seem like a daunting task, especially if you're just starting out and think you need thousands of dollars to get started. However, the truth is that you can begin your investing journey with as little as $100. In fact, starting small can be a smart way to learn the ropes without taking on significant financial risk. Whether you're saving for retirement, building wealth, or simply looking to grow your money, there are plenty of investment opportunities that allow you to start with a modest amount. Here's a guide on how to start investing with just $100.

1. Set Clear Financial Goals

Before diving into any investment, it's important to have clear financial goals. Are you looking to invest for the long term (like retirement) or short term (like buying a home)? Knowing your goals will help you determine the best investment strategy and ensure that your $100 is working toward something meaningful.

• Short-term goals (1-3 years): These may include saving for a vacation, an emergency fund, or a down payment on a house. In this case, you may want to prioritize safer, low-risk investments.
• Long-term goals (5+ years): These could include retirement or growing wealth for future financial freedom. Long-term goals may afford you the opportunity to take on a little more risk, as time can help smooth out market fluctuations.

2. Start with a High-Yield Savings Account or Money Market Account

If you're looking for a safe, low-risk option to park your $100 while you learn more about investing, a high-yield savings account or money market account can be a great place to start.

• High-yield savings accounts typically offer interest rates higher than traditional savings accounts, helping your money grow faster.
• Money market accounts offer similar benefits, with the added advantage of limited check-writing privileges or debit card access.

These accounts won't make you rich, but they’re a low-risk way to start earning some interest on your savings while you get a feel for the investing world.

Tip: Many online banks and credit unions offer high-yield savings accounts with interest rates higher than those at traditional banks, often requiring no minimum deposit or fees.

3. Invest in Fractional Shares of Stocks

Traditionally, buying shares of stock required a significant amount of money. However, with the rise of fractional shares, you can now invest in major companies like Apple, Amazon, or Tesla with as little as $1.

• Fractional shares allow you to purchase a portion of a stock rather than a full share. For example, if one share of Amazon costs $3,000, you can buy just $100 worth, which would give you a fraction of a share.
• Brokerage platforms like Robinhood, Fidelity, Charles Schwab, and Cash App allow investors to buy fractional shares with low or no commissions.

Tip: Look for brokerage platforms that have zero commission fees and allow fractional investing, as this will maximize your ability to diversify even with a small amount.

4. Exchange-Traded Funds (ETFs)

If you want to diversify your investment without having to buy multiple individual stocks, Exchange-Traded Funds (ETFs) can be a great way to start. ETFs are baskets of stocks, bonds, or other assets that you can buy as a single unit. They allow you to invest in multiple companies at once, spreading your risk.

• Low-cost ETFs: Many ETFs are designed to track market indices like the S&P 500 or sector-specific funds. With just $100, you can purchase shares of an ETF that tracks a broad range of stocks, reducing the risk of any single investment.
• Popular ETF options: Consider starting with ETFs like the SPDR S&P 500 ETF (SPY), which tracks the S&P 500, or the Vanguard Total Stock Market ETF (VTI), which gives you exposure to the entire U.S. stock market.

Tip: Look for no-load or low-fee ETFs. These funds typically have lower expense ratios, which can help you keep more of your returns.

5. Robo-Advisors

If you're not sure where to start or don't want to spend time researching individual stocks and bonds, robo-advisors can help you manage your investment with just $100. A robo-advisor is an automated investment service that uses algorithms to create and manage a diversified portfolio based on your risk tolerance and investment goals.

• Popular robo-advisors: Some of the most well-known robo-advisors include Betterment, Wealthfront, and SoFi Invest. These platforms typically offer low minimum deposits (sometimes as low as $1) and automated portfolio management for a low fee.

Robo-advisors usually invest in ETFs, bonds, and other low-cost securities, allowing you to access diversified portfolios with minimal effort on your part.

Tip: Many robo-advisors offer tax-loss harvesting and rebalancing services, which can optimize your portfolio and potentially save you money on taxes.

6. Peer-to-Peer Lending

Another way to invest your $100 is through peer-to-peer (P2P) lending. This involves lending money to individuals or small businesses through online platforms, where you earn interest as they repay the loan. Popular P2P lending platforms include LendingClub and Prosper.

• How it works: You can lend small amounts of money to multiple borrowers to spread your risk. As the borrower repays the loan, you earn interest. The returns can be higher than traditional savings accounts, but the risk of default is also present.
• Considerations: P2P lending can be riskier than investing in ETFs or stocks, as there’s no guarantee that the borrower will repay the loan.

Tip: Only invest a small portion of your $100 in P2P lending and diversify your investments across multiple loans to reduce risk.

7. Invest in Cryptocurrency

Cryptocurrency has become a popular (and volatile) investment class. While it's not for the faint of heart, it’s possible to invest in cryptocurrencies like Bitcoin, Ethereum, or newer altcoins with just $100.

• Cryptocurrency exchanges: Platforms like Coinbase, Binance, and Kraken allow you to buy fractions of popular cryptocurrencies. With $100, you can start by investing in small portions of more established coins or explore newer, smaller cryptocurrencies that may offer higher returns (and higher risk).

Tip: Cryptocurrency can be very volatile, so it's important to only invest what you're willing to lose. Consider it as a high-risk investment for your long-term portfolio.

8. Start a Micro-Investing Account

If you’re really looking to start small, micro-investing platforms like Acorns and Stash allow you to start investing with spare change. These apps round up your purchases to the nearest dollar and invest the difference in diversified portfolios. For example, if you buy a coffee for $3.75, the app rounds up to $4 and invests the remaining $0.25.

• Acorns: This app connects to your bank account and automatically invests your spare change, making it an easy way to build an investment portfolio over time.

• Stash: Similar to Acorns, Stash offers fractional shares, allowing you to invest small amounts in stocks and ETFs. They also provide personalized advice to help you make informed decisions.

Tip: Micro-investing is a great way to get started without needing to commit a large sum of money. Over time, your investments can add up and grow.

9. Consider Real Estate Crowdfunding

If you're interested in real estate but don't have the capital to buy property, consider real estate crowdfunding platforms like Fundrise or RealtyMogul. These platforms allow you to invest small amounts (often starting as low as $100) in real estate projects, such as residential or commercial properties.

• How it works: Investors pool their money together to fund real estate projects. In return, they receive a portion of the profits, either from rental income or the sale of the property.

Tip: Real estate crowdfunding can be illiquid (meaning it’s harder to access your money in the short term), so it's best suited for long-term investors.

Conclusion

Starting to invest with just $100 is not only possible, but it’s also an excellent way to begin building wealth over time. Whether you're looking for low-risk options like high-yield savings accounts or exploring higher-risk assets like cryptocurrencies and P2P lending, there are plenty of ways to get started. The key is to start small, stay consistent, and gradually increase your investments as you gain confidence and knowledge. Over time, even small investments can add up, allowing you to achieve your financial goals while learning valuable lessons along the way.