Got $100 burning a hole in your pocket? Investing it wisely can be a great start to building wealth. Here are six ways to invest $100 starting today: start an emergency fund, use a micro-investing app or robo-advisor, invest in a stock index mutual fund or exchange-traded fund, use fractional shares to buy stocks, put it in your 401(k), or open an IRA. Remember, investing is a long-term game, so be patient and committed to your investment strategy. Let’s dive in!
Previously in the article, we discussed the importance of investing $100 wisely. Now, we will share with you our 6 best ways to invest $100 starting today.
1. Start an emergency fund.
In life, emergencies happen, and it’s always best to be prepared. Starting an emergency fund is a smart investment that can help you cover unexpected expenses. You can start by putting your $100 into a high-yield savings account, where it can earn interest and be easily accessible when you need it.
2. Use a micro-investing app or robo-advisor.
If you’re new to investing and don’t have a lot of money to start, micro-investing apps or robo-advisors are a great option. These apps allow you to invest small amounts of money in a diversified portfolio of stocks and bonds. Some popular micro-investing apps include Acorns, Stash, and Robinhood.
3. Invest in a stock index mutual fund or exchange-traded fund.
Investing in a stock index mutual fund or exchange-traded fund (ETF) is a great way to diversify your portfolio and potentially earn higher returns. These funds track a specific index, such as the S&P 500, and offer exposure to a broad range of stocks. With $100, you can buy shares in an ETF like the Vanguard S&P 500 ETF or the iShares Core S&P 500 ETF.
4. Use fractional shares to buy stocks.
Fractional shares allow you to buy a portion of a stock rather than a full share. This is a great option if you want to invest in a company that has a high share price. Many brokerage firms now offer fractional shares, including Charles Schwab, Fidelity, and Robinhood.
5. Put it in your 401(k).
If you have a 401(k) through your employer, consider contributing your $100 to the plan. Not only will you be investing in your future, but you’ll also be taking advantage of any employer matching contributions. Over time, your contributions and earnings can grow tax-free until you’re ready to retire.
6. Open an IRA.
If you don’t have a 401(k) or want to invest more than what your plan allows, consider opening an individual retirement account (IRA). With an IRA, you can invest up to $6,000 per year (or $7,000 if you’re over 50) and enjoy tax benefits. There are two types of IRAs: traditional and Roth. A traditional IRA allows you to deduct your contributions from your taxable income, while a Roth IRA allows you to withdraw your earnings tax-free in retirement.
In conclusion, investing $100 may not seem like a lot, but it’s a great start to building your wealth. By following our 6 best ways to invest $100 starting today, you can make smart investment decisions that can help you achieve your financial goals. Remember, investing is a long-term game, so be patient and stay committed to your investment strategy.
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