Thinking of how to invest 100 dollars?
Whether you managed to save it up or found a nice crisp bill on the side walk, there are a lot of options even when you have only a little money to invest.
To some it may seem like hardly worth the trouble of figuring out where to invest this small of a sum, but with any type of investing the key is to make it a regular habit. So while $100 may not seem like a lot of money any start to investing is a great start
Different people have different levels of tolerance for risk, so to cover as many bases as possible, here are 19 different ways to invest 100 dollars.
Ways to Invest $100
When people talk about investing money these are the ideas that typically come to mind. You put money in and make a decent interest rate on the investment.
$100 is not a super big investment and many companies simply will not let you get started for less than $500 or even a $5,000 staring investment.
That being said, savings accounts are not sexy, but they are backed by the FDIC. This means that your deposits are insured up to $250,000. So if the bank goes out of business you still get your money.
On top of that you can transfer the money out of any savings account and into a checking account. The most time I have seen it take to make a transfer is three days.
You are going to get the best return with a savings account, but the money is safe and you get a little interest with the deal. There are tons of online banks that offer competitive interest rates. Some of the best interest rates for high yield savings accounts are coming from:
Invest with a Robo-Advisor
If you have never dabbled in picking your own stocks and only have $100 to invest then a robo-advisor can give you the best bang for your buck.
The best one in the marketplace is Betterment. The way Betterment works is that you put your money in and the algorithm invests it for you based on your individual settings. So timeline, risk tolerance, and circumstances all factor in. The fees are minimal and will not eat up even a small part of your investment.
The best part is that once you answer the questions that help with the allocation of your assets, the whole thing is hands off.
You can get all the fee information and how they allocate your investment in my Betterment review.
Microinvesting in Stocks
Only haveing $100 to invest makes it very difficult to invest in stocks. Many large companies have individual stock prices that are larger than 100 dollars.
Stockpile allows you to buy factional shares of stock from over 1,000 different companies. This means if Apple stocks costs $150 you cans still buy $5 worth of that stock.
The other big problem with buying stocks through a traditional or online broker is the cost per trade. Because Stockpile only works with their select companies, they are able to allow you to make trades for only $1, keeping you from eating into you investments with fees.
Invest in an ETF
The problem with mutual funds is that they typically require that you have at least $1000 to invest. Many require $3,000 or more. Unfortunately we are only investing 100 dollars so mutual funds are pretty much out.
The good news for us is that ETF’s are a way to invest in mutual funds and are available at a very low cost.
ETF stands for “exchange-traded fund”. This means that instead of having to purchase a mutual fund through one of the many mutual fund companies we can purchase it just like we invest in stock from the stock market.
This means you can purchase an ETF at any of the different online brokerage account services, but I recommend using TD Ameritrade. There are over 100 different ETFs that you can invest in commission free with a TD Ameritrade account.
You will need to be comfortable researching the different ETF options, but you can do all that through the TD Ameritrade platform.
Invest in Dividend Paying Stocks
There are stocks that you invest in for going up in value and those that you want because they pay dividends. A dividend is a sum of money paid out of a company’s profits on a regular basis (usually quarterly) to its stock holders.
The reason that these types of stocks can be very profitable is that it allows you to grow your portfolio by reinvesting the dividend in new shares of stock.
The bonus is that companies that pay dividends are usually very stable because they have good cash flow (thus the dividends). This means their stock prices don’t go up and down rapidly affecting your investment.
You can take that income produces in dividends and purchase more dividend stocks This strategy of dividend reinvestment has become a big part of many stock traders portfolios.
Once again you need to do your research and Ally Invest gets you in with research tools and free trades.
Employer Retirement Plan
Whether it is a 401K, 403b, or some other type of retirement account that is offered by your employer you need to explore this as a great place to put you $100 investment. Taking money to build up your nest egg each month will lead to a much happier retirement.
If you aren’t fully comfortable picking your own investments yest, you can try Blooom. Blooom works just like a robo-advisor except they explore all the investment options inside your employer sponsored account and then make the adjustments for you based on your risk tolerance.
If you aren’t sure how to maximize your account or just want a hands-off approach, Blooom is a great option.
I have yet to find a financial blogger who doesn’t like index funds. Basically the fund invests in a large number of stocks called an index.
The most famous is the S&P 500, but there are tons of different ones and they are dirt cheap to invest in through any of the top online brokers.
Just like stocks, you can invest in index funds through an online brokerage account. With the lowest fees in the industry for index fund trading, I would look at using Ally Invest.
Money Market Account
Money market accounts (MMAs) are another form of savings account that tend to get a slightly higher interest rate.
MMAs usually have limited check writing privileges and are very easy to get money in and out of (some even offer limited check writing privileges).
Just like your savings accounts, this easy access to your cash means you will not get the highest interest rates when compared to other options. On the other hand, this is a super safe investment. Top MMA interest rates are coming from:
Certificates of Deposit
Most often referred to as a CD, certificates of deposit are like a savings account, but they lock up your money for a specific amount of time. This amount of time can be as little as 13 months or as long as 10 years. The longer you lock in your money the higher the interest rate.
This is not to say that the interest is going to be great no matter how long that money is locked away. The difference of interest rates between a 13 month CD and a 24 months CD is 0.1%.
Just like savings account the money in a CD is insured so your investment of $100 is safe and sound. The top CD interest rates are coming from:
Pay Off Debt
I know this does not seem like an investment but bear with me. If you have any medium to high interest debt then you are paying interest on that money. Instead of letting that outstanding debt continue to charge interest against you, pay it off.
Here’s an example. If you have $100 of credit card debt at 21.9% interest, you aren’t going to find any investments on this list that will get you that kind of return. So pay off the $100 and get rid of that negative interest. Think of it as avoiding a negative $100 investment.
Flip Purchases on Craigslist
There is a ton of stuff to be purchased and sold on Craigslist. If you have a bit of experience with some items that are frequently sold on Craigslist then you can make a pretty good side income by buying and selling through the popular platform.
If you have the time you can do even better by going around local yard sales and then flipping those items on Craigslist for a quick profit.
Craiglist is just one of the ways you can make money by flipping purchases. For more ideas check out my post on How to Sell Your Stuff.
Expand your Knowledge
In an information age knowledge is power. This means if you are looking to make more money then you might want to start with gaining knowledge.
Many people think this means taking a college course or paying for an expensive training, but there are tons of online courses that will provide you with the knowledge you need to get started on your next adventure.
Udemy is currently one of the leading sites for online courses. They have courses as low as $16 and they have a rating system that lets you know how other users valued the course.
You can buy books that will expand your knowledge or you can go with books that go up in value over time. My sister-in-law is The Loopy Librarian. She has a hobby of purchasing first edition first print novels and then going to different book signing events to get them signed by the author.
I am not sure that you can count what she does as an investment because I have yet to see her actually sell a book, but I am sure that eventually some day someone will make some money off of them.
Your Business or Start a Business
If you already have a business or side gig, then there is no better place to look at investing 100 dollars. Whether it is using that money to find a freelancer or hire a virtual assistant. Whatever that next step your business needs to take, invest that crisp 100 dollar bill in taking it.
If you do not currently have a business, maybe you have some talents that could translate into a side hustle. Let people know what you can do and get the word out.
Use your $100 to buy supplies or advertise yourself. Make it happen and you could end up with a steam of customers paying you over and over again.
Find a Deal
Instead of investing to make money, why not invest in saving money. Keep that one hundred dollars in your pocket until you find an amazing deal. Think of it like using that money to keep yourself from spending more.
A good example is popping into Target from time to time to check out the items that are on clearance. Target clearance can get up to 75% off of the regular price.
So if you know something that you would like to buy and can keep an eye out for best deal then you can really pounce on a great deal when it comes.
I once purchased two brand new 15 speed mountain bikes for my wife and I for a total of $85 shopping the Target clearance deals.
This was before you could use the Target Red Card to get an additional 5% off or I would have been closer to $80 for those bikes.
Start an Emergency Fund
If you don’t have a stockpile of money that sits there just for emergencies then there may be no better place to put your $100 than in a savings account.
Having money set aside for an emergency means that when an emergency happens, and they will happen, you do not have to turn to debt to handle the emergency. It also makes your life much less stressful.
For example, when both of my cars broke down on the same day, All I had to do was get them towed and pay the mechanic. Before I had an emergency fund I would have had a car problem and a money problem. It was annoying but really not that stressful.
A starter emergency fund is $1000 and a full funded one is three to six months of expenses.
Make Your Home More Energy Efficient
Whether we are entering summer or winter, it is a good idea to make your home more energy efficient. Sealing windows and doors and making sure your house does not leak air will make a huge difference on your energy bills during either of the two most extreme seasons. This investment will pay dividends for years to come.
Open a College Savings Plan
If you have kids then college is coming. It isn’t going to be cheap unless you ship them off to the military for a few years first. We were very fortunate in that both mine and my wife’s parents paid for our college educations.
It gave us a great start to our lives only having a car loan and some credit card debt when we started out (which we paid off in 14 months after getting married).
We want to do the same for our kids so we put little bits of money away in our states 529 plan so there is money there gaining interest and growing for when our kids get to college age. Plus it’s a nice little tax write off.
Stock Up on Frozen Food
I love eating meat and stocking up and freezing meat is a great way to save money. My wife and I purchase our meat in bulk from Butcher Box. The main item we purchase is boneless skinless chicken breasts.
They come fresh in a 40 lb. box. When we get it we freeze the chicken individually and then put in freezer bags. We have also purchased large quatitities of bacon, pork chops, and ground beef. There are a ton of options and it really saves you a lot of money over shopping at the grocery store.
Final Thoughts on Investing $100
No matter what you choose to do with your 100 dollar investment the important thing is to start investing. Do yourself a favor and be careful and thoughtful with how you use that $100.
By making good decisions with our money and making sure we get the greatest purchase power with each dollar, we can make sure that our net worth grows larger and larger and that retirement will be a happy and well funded time of our lives.