How to Invest $100: In 2021, How Acorn App Work (+ Free money tips)

How to invest $100. Perhaps the biggest obstacle that keeps people from investing is a lack of funds. But if I told you, you can start investing immediately with just the $100 bucks in your hand. Yes! you can turn a $100 bucks into a thousand-dollar in a hurry. By just finding the right investment suitable for your 100 bucks, and your risk tolerance.

Learning how to invest $100 opens up a whole new world, and can change your life for the better. However, you can opt for an existing investment which most requires much less capital than you think. Meanwhile, you can as well choose an off-the-shelf investment that will give you a higher return. The choice is always yours to make, either to keep your 100 bucks or invest it for a potential return. Therefore, this article will show you how to invest $100 and make some extra money with the investment. Continue reading to find out more.

How to Invest 100 Dollars

Don’t underrate the importance of investing with only $100 bucks in your hand. Mostly, the reason millions of people haven’t invested is mainly that they haven’t started yet. An investment of $100 doesn’t sound great compare to a traditional investment. But it can be the start point to your financial freedom, no amount is too small to start investing. The choice is up to you to decide your financial future now.

However, if you want to invest $100 and learn how to make real money, consider the less common methods I suggested below. This allows you to get 10 times or 100 times your investment amount of $100. Perhaps, this is the best way to make a large investment with minimal investment. Check out the following 10 best ways to start your $100 investment.

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#1. Assemble Your Savings Using Micro Investment Apps

An app like Acorns can automatically aggregate your spare change and invest on your behalf when you make a purchase. By signing a plan, you automatically increase your wealth and savings. Meanwhile, you can also choose a professionally planned portfolio with better or worse results depending on your goals and risk tolerance. Let’s see how the Acorn app works below.

How Does the Acorn App Work?

The plan cost is $1, $3, and $5 per month, depending on the number of features you required. The standard lite plan of $1 per month automatically assembles your purchases and invests your spare change as your investment. Individual and family plans which are $3 and $5 per month respectively offer other benefits such as checking and free access to more than 55,000 ATMs across the country.

However, to get started, first, you have to download the Acorn app and open an account with them. Then, choose your suitable plan to start assembling your purchases, and invest the difference at flash speed. Meanwhile, personal and family plans are the best place to store your first $100 investment.

Note: Acorns is recommended for anyone who needs help saving money automatically, then investing that money into expertly chosen investments.

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#2. Make Use Of Fractional Shares to Buy Stocks

Fractional shares are just sections or parts of individual stocks. As a result, this type of investment allows you to spend your $100 buying stocks that you couldn’t otherwise afford. You can also diversify your $100 investment into different stocks that will work well in your portfolio.

For example, with Robinhood, you can buy company stock, even if you do not have enough money to buy the whole stock. This is the so-called partial investment in shares. Instead of buying stocks for $100, you can invest $10 in 10 stocks differently. To get started, open an account with Robinhood which is easy. When you open an account with Robinhood, you can free shares worth up to $225 after meeting certain basic requirements.

#3. Open an High-income Online Savings Accounts

Some online banks offer savings products with much higher returns than regional banks. Though they also pay high incomes for the money market and certificates of deposit, the minimum initial investment for any of these products generally exceeds $100. However, you open a high-income online savings account that pays high-interest rates, which doesn’t require at least the initial minimum investment. Examples of these online high-income banks include CIT Banks, UFB Direct, and Discover Bank.

#4. Consider Cryptocurrency Investment

Cryptocurrency is a term used to describe digital currencies such as Bitcoin and Ethereum. Though crypto is believed to have high volatility, yet many experts believe that the industry is still in its babyhood. Meaning that crypto will be widely used for decades to come. For example, some industry analysts predict that bitcoin’s value will reach more than $200,000 in the next few years.

Basically, platforms like BlockFi do not have a minimum balance requirement, so they are very suitable for crypto-financial investment. This means that you can now invest your initial $100 in cryptocurrency, but you can also start with $5, $10, or any other amount you have.

Read More: Investment Plan: All you need to know Explained in Detailed(+ free tips)

#5. Take Advantage of Robo-Advisers For Your Portfolio

There are dozens of Robo-advisors, and may not require upfront investment at all. For just $100, you can get a fully-managed portfolio of stocks and bonds. However, Robo-advisor designs your investment portfolio and manages it at the lowest possible cost. The two best examples of Robo-advisors that don’t require minimal initial investment are Betterment and M1Finance. All of these make it possible for you to start investing immediately with just $100.

#6. Involve in Peer-Peer Lending

P2P lending platform is a platform for consumers to borrow money to buy personal loans. These are unsecured loans and can be used for almost any purpose, up to a maximum of $40,000. However, the interest rate of these loans depends on the credit status of the borrower.

Moreover, they are also platforms for investors to invest in loans. You will not actually invest in all loans but in small loans called notes. Therefore, you can buy these notes for $25, which means you can divide your $100 investment into four different loans. An example of a P2P investment platform is Lending Club which is considered the largest platform.

#7. Consider Stock Index Mutual Fund or Exchange-traded Fund

Investing in stock index mutual funds or low-cost listed index funds is a great way to start investing a little bit of capital. All of these investment tools allow you to buy slightly more different stocks with modest investments, thereby realizing diversification. Meanwhile, you can choose from a wide range of stock indices, from the popular S&P 500 indices to more specialized indices.

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#8. Invest in 401K plan

If you have 401(k) or other employer-provided retirement plans, this can make good use of investment $100 funds. Especially if you have not maximized your employer’s unit contributions. For example, in addition to a 401(K), you can also invest $100, and your employer willingly wants to contribute $50 on your behalf as a matching contribution. In other words, your money has a 50% rate of return. Meanwhile, you can’t get such a quick return on investment anywhere else.

#9. Open a Traditional or Roth IRA

In general, the account type you choose to invest in is more important than what you choose to invest with. If you plan to invest $100 a month, you should consider investing in a tax-friendly account such as an IRA. Both traditional IRA or Roth IRA can give you some tax benefits.

#10. Pay off your Debt

This doesn’t sound like a lot of investment, but it may be the best investment for $100. There are two ways to get your money back. The first is to invest and receive dividends or capital gains. However, the second is to pay off debts and eliminate interest. Meanwhile, one of the best ways is to pay off credit card debt. If your credit card charges 20% interest, you can pay up to $100 and earn $20 in “income” per year. This equals 20% of traditional investment income or return and is almost impossible to obtain on a regular basis. Similarly, debt repayment is a completely risk-free investment, you won’t lose money doing it.

Extra Tip: You can also get involved in buying and selling items on eBay and Amazon. That is also another way of making more money with your $100 bucks. Meanwhile, take advantage of investing in yourself by purchasing a course or program. It may sound odd, but it’s one of the best investments you can make. In other to help yourself learn new skills that will enable you to increase your annual income.

Read Also: Ach Credit: How Does it Work? What You Need To Know

Conclusion

There are many ways to invest $100, just as there are smart options if you have $1,000, $5,000, or $10,000 to invest. It all depends on your readiness and devotion to building wealth. Make sure you compare all of the options in this article and only start once you know you’re ready. Good luck!

Chiemerie Ozurumba (Adorablepen) is a freelance writer & Computer Science degree holder, a personal finance expert, blogger, public speaker, and poet. He is also a relationship & life coach. Currently a writer at BusinessYield.

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