How to Start Investing with Only $100

Who said you need hundreds of dollars to become an investor? Most average income earners don’t have fat bank accounts that can be readily invested. However, that doesn’t mean the struggling workers cannot actually double or quadruple cash assets by investing. If you have $100, you can become an investor. Here are several ways you can do this:

Open a Savings Account

The easiest and the simplest way to start investing is by opening a savings account. Rather than let your cash sit under the mattress or get spent in a checking account, open a savings account. Your cash will actually grow each month and each year with interest payments.

Most savings accounts generate low yields, but your money will be protected. Savings accounts are one of the least risky ways to invest. You can make money as long as the annual interest rate is above the inflation rate. Even if the bank’s interest rate is lower than that, you would have more money at the end of the year than when you opened the account.

So if you have $100, instead of spending it, put it in a savings account. This could be the start of an emergency fund or a way to save for covering the down payment of a house in the future.

Buy Low-Cost Stock (Carefully)

Buying stock doesn’t have to cost you hundreds of dollars. In fact, there’s a whole “wild west” part of the stock market that deals with so-called penny stocks, which is anything that costs less than $5. Not all low-cost stocks belong to this category. But you can buy plenty of penny stocks with mere change.

There are two things every amateur investors should know about these low-cost stocks: they are cheap and they are also very high-risk. The low-cost stock sector is notorious for scams, particularly email scams. Therefore, newbie investors should proceed with caution. It should be noted, however, that some low-cost stocks are actually legitimate. There are plenty of stories about how investors bought these stocks for as cheap as a dollar only to see the value increase to $10 in two weeks.

Penny stocks are a great option when you don’t have enough cash to invest in any “serious” assets. However, buying cheap stock is not a gamble. With the right amount of research and know-how, you can avoid the pernicious scams and make real money.

Invest in a Crowdfunding Idea

If you want to invest in a promising small business, investors typically need more than a hundred bucks, but not online. Platforms like Kickstarter allow entrepreneurs and innovators to accept tiny loans from interested investors. Browse a crowdfunding site for a business idea that you think might pay off. You can invest in return for free products or stakes in the company, depending on what the borrower is willing to return for the money.

You can get the best returns with crowdfunders who will return your cash with interest once their idea has come to fruition. However, be careful about whom you crowdfund. Find crowdfunders with a track record of delivering to protect your investment. Some may be willing to offer security for your money.

As you can see, there are plenty of lucrative ways you can invest a mere $100. It’s recommended to start early with small amounts to gain experience and knowledge. Later, you will be confident enough to invest larger sums.

David Jackson

David is a personal finance expert, a professional male model, and an entertainment writer.