How would you like to grow $100 to $110 or even over $200? This is basically what investing does. You start off with a small amount that gradually grows with compound interest over time. The amount of money you invest is purely relative to the amount you earn and what you expect to live on when you begin drawing on your invested savings. We always hear about saving while we are young, and utilizing employer matches on our retirement savings, because it is all about allowing your money to work for you over the longest period of time possible. There are several options for investing amounts even as meager as a hundred bucks, and most follow the same sound investment advice as if you were investing $100,000. The final payout will depend on the risk you undertook when investing the money. This is what they mean when they say “no risk, no reward”. If you are interested in growing a small amount of cash into something big, listed below are several investment options to consider.
Open a Savings Account
The easiest and most convenient way to grow $100 is to place it in a savings account. This would be an investment that gets paid off with an interest rate each year, or the APR. Savings accounts may not deliver high yields, but you can count on your money to be safe. Keep in mind that putting your money in a savings account is also a much safer option than amassing debt, obviously. So if you are undecided about whether to invest your money, deposit it in a savings account until you make up your mind. Your money would grow even during that brief period in the bank. We see the Fed increasing rates at an almost quarterly rate these days, and each time they do our savings accounts benefit from this. The trend of increasing interest rates isn’t slowing down any time soon either.
Invest in the Stock Market
Despite popular belief, you don’t need thousands of dollars to buy stock. Stocks are rated based on value. The cheapest are penny stocks, which you can purchase for less than $5. The top-end stocks belong to well-known global brands like Apple, which has shares that are valued at around $100. You can buy individual stocks of any kind as an investor, however, before buying individual stocks, it’s important to do your research and understand the type of risk you are taking on. Penny stocks may be cheap but they are also highly risky. Usually, it is the more experienced day traders that make money out of these. You should exercise caution even when buying pricey stock. Understanding the right penny stocks to buy and doing research on the sector is crucial to making the right investments that eventually pay off.
Lend the Money
Thanks to the internet, it’s now possible to lend small amounts of money online to strangers at a considerably high-interest rate. Join a peer-to-peer lending service to quickly grow your money with more control over how much interest you can earn. There will be rules to follow, of course, and moneylending is always risky, but most online platforms have generous codes of conduct and even guarantees that will protect your investment. This is a great option for those who don’t want to dabble in the stock market but still want to invest.
Out Your Money in an Index Fund
An index fund is comparable to a basket of small investments. They track the market performance and function according to preset rules. When you put your money in an index fund, you don’t need to do much else. Your investment will grow depending on how the index performs. Index funds have skyrocketed in popularity among investors in the past few years. The initial investment amounts can vary among funds. But some, like Charles Schwab’s, accept initial investments of just $100. You can start with a small amount and see how these funds work before investing more cash.
There are plenty of other options when it comes to investing $100. For example, in addition to index funds, you can also consider ETFs. The point is that investing your money in any way is important, compared to letting it rot under the mattress.