You don’t have to have a ton of money to start investing. There are lots of great ways to invest small amounts of money – anything from $5 to $100 – and start seeing big returns.
Investing your money is one of the best ways to set yourself up for long-term financial success. If you’re ready to start making your money work for you, here are nine ways you can invest $100 or less.
HOW TO START INVESTING
Start a side hustle
A side hustle can lead to great things – paying off debt, achieving your financial goals, and developing a strong sense of passion! Using $100 to start a side hustle may be one of the best investments you make. $100 can allow you to buy materials, equipment, or tools to help you make the most of your talents to make money on the side.
Tons of people find that their side hustle not only gives them more financial security, but also makes them happier!
Pay down your credit card
Paying off your debt may not sound like investing, but it can be a great strategy for creating long-term financial success. The quicker you pay off your debt, the quicker you’ll become debt-free and free up extra income to make other investments.
Making extra payments whenever you can – even if it’s just an extra $100 – can add up quickly, so you don’t have to continue to be a slave to debt.
Invest in your 401(k) or Roth IRA
The sooner you start saving for retirement, the better off you’ll be in the long run. That’s because if you start investing early, your money can grow over time thanks to compounding interest. The best and easiest way to invest for retirement is through your 401(k) or IRA.
Many employers allow you to invest a portion of your paycheck directly to your retirement account, making this method of investing nearly effortless. Just set up a contribution, and watch your money grow! Plus, when the money’s coming straight out of your paycheck instead of out of your bank account, you probably won’t even miss it.
If you’re scraping around for spare change each month, you can still start investing. Innovative companies have popped up that allow customers to invest tiny amounts. Acorns is an app that allows you to round up any purchase you make to the nearest dollar, and then they invest the difference. So, if you buy that avocado toast for $6.49, Acorns rounds up to $7 and invests the extra $0.51 for you. It makes investing effortless. Think of it as a modern-day change jar.
Other apps, like Stash, allow you to make micro-investments starting at $5, without charging you a transaction fee. You can get an extra $5 when a friend you refer signs up, so if you’re a trend-setter within your friend group, you can literally cash in!
Try a Robo-advisor
Robo-advisors have become incredibly popular for anyone wanting a more hands-off approach to investing. They allow you to get started with less money than most brokerage firms. Plus, they’re designed to invest your money in a portfolio that’s customized for your specific needs.
For example, Betterment matches you to a customized portfolio and automatically adjusts your investments just like a broker would as the market changes. Because Betterment uses robo-advising instead of human brokers, their costs are low, meaning they get to pass on the savings to their customers. Thanks to this innovative technology, there’s no better time to start investing than now!
Start a Business
If you have even the slightest bit of an entrepreneurial spirit, you should absolutely invest a bit of money to harness that passion. Whether that means starting a blog, establishing yourself as a freelance consultant, or launching an Etsy shop, $100 can go a long way.
Starting (or growing!) your business can help you create more long-term profitability. Investing or reinvesting in your business is the perfect example of the old adage that you have to spend money to make money.
Invest in Yourself
Investing in yourself can provide returns for years to come. If you can spend a little extra money (and time) developing valuable talents and skills, you can greatly increase your income – which is always a good investment!
Depending on your field, taking an online class or getting a certification can help you achieve more throughout your career. Talk to your boss to see if there are skills you can develop to become eligible for a promotion. Then chase down any opportunity you can to develop those skills. Your future self will thank you.
Open a Savings Account
Although a savings account doesn’t exactly promise large returns, it can still be a valuable tool for ensuring financial security. A savings account is a necessary part of anyone’s financial portfolio. Even though your money may not grow quickly, a savings account keeps your money available to you on short notice.
So if you want to save for a vacation, a down payment for a home, or anything in between, a savings account is the perfect choice. Even if you already have a savings account, having multiple savings accounts may allow you to achieve multiple savings goals faster!
If you’ve already got a strong emergency fund and your retirement savings is doing well, then peer-to-peer lending is a great way to increase the diversity of your financial portfolio. Peer-to-peer lending sites like Prosper give you a place to invest in others starting with as little as $25.
They take care of screening loan applicants, and you’ll get money each month as borrowers pay back the money you (and others) loaned. Think of it as a GoFundMe, but with a return on your investment.
The above is a guest post from Lucy Oake. Lucy is a staff writer at One Smart Dollar.