Got $100? Here's How to Start Investing

To be successful with your investing, it's important to start as early as you can. Yet many beginning investors mistakenly assume that they need a lot of money to get started. In reality, you can invest as little as $100 in ways that will provide much better returns than you'll get in your savings account.

In the following video, Motley Fool investment-planning editor Lauren Kuczala talks with longtime Fool contributor and financial planner Dan Caplinger about how to go about investing $100. Dan points out that many mutual fund companies allow people to invest small amounts as long as they commit to making regular additions to their account. In addition, other specialty investments such as savings bonds offer a chance to invest small amounts to get returns that will be better than some other fixed-income options.

Once you've saved enough to start looking at individual stocks, the best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.


Read/Post Comments (9) | Recommend This Article (17)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 19, 2013, at 5:57 AM, ralf914 wrote:

    This is why I am distancing myself from Motely Fool. Title of article "Got only $100. How to start investing" Two of the stocks are WAY OVER $100!!. The third I've been watching drop like a rock. Just to trick people into giving you their e-mail address. I am now sooo ticked off at you people. I plan to spam your e-mails sent!!

  • Report this Comment On May 19, 2013, at 6:28 AM, golfamatic wrote:

    Stay away from individual stocks if you only have $100/month to invest. Even discount broker ShareBuilder hits you with a $4 commission. Instead, open a Roth IRA at Charles Schwab. They have an excellent array of ETFs with the lowest expense ratios in the business. Figure out an asset allocation, then every month dedicate $100 to a certain ETF. Also, no commissions if you have an account with Schwab. Good luck, and good fortune. Stick with it...even a dripping faucet will eventually fill a bathtub.

  • Report this Comment On May 19, 2013, at 8:04 AM, TMFGalagan wrote:

    @ralf914 - Listen to the video itself, and it gives you ways to get fully diversified exposure to the market for just $100 in ways that are similar to @golfamatic's smart comment.

    best,

    dan (TMF Galagan)

  • Report this Comment On May 19, 2013, at 9:19 AM, jasjfarrell wrote:

    Schwab is the best for $100 investment. You can open a stock Mutual fund with $100 and add as little as $1.00.

  • Report this Comment On May 19, 2013, at 9:25 AM, joshuarayborn wrote:

    Buy 5 silver dollars, a much better investment!

  • Report this Comment On May 19, 2013, at 11:08 AM, brookarcher wrote:

    Got to disagree with Golfamatic. Individual stocks can give you a much higher rate of return . . . if you pick the right one. For example, Buried Stocks group on Facebook came up with a solar stock this yera. After some heavy research at the beginning of February I bought Westinghouse Solar (stock symbol WEST). I saw they were at a bargain as stocks that are at a discounted price are supposed to be the subject of this group on FB. By mid February I sold for a 300% return, tripling my money.

    Ultimately, Golfamatic wasn't as specific as he should have been with his comment. The true moral of the story is this: You don't have to stay away from individual stock as long as you're not lazy and do you research, learn to read technicals (charts and their indicators) and understand fundamentals of a company's books. Westinghouse was touching on it's .03¢ support level 1 (S1 in terms of pivot points, a technical indicator). This is a point where stocks tend to bottom out and make a corrective bounce back up from. WEST is there again this week. Just saying. ..

    Best of luck.

  • Report this Comment On May 19, 2013, at 4:29 PM, businessgypsy wrote:

    ...aaaaand it's gone. Next!

  • Report this Comment On May 19, 2013, at 5:36 PM, golfamatic wrote:

    It's just too expensive to buy individual stocks if you only have $100/month to do it with. ShareBuilder is the least expensive online brokerage I'm aware of and it's $4/trade. That's quite a bite when you consider how little principal is involved. If you want to split the $100 into 4 stocks per month (Sharebuilder buys you fractional shares with whatever round dollar figure you choose to invest)...that's $16/month in trading fees.

  • Report this Comment On May 23, 2013, at 4:36 PM, JoelZaslofsky wrote:

    Lauren and Dan,

    I believe you’ve started people off on the right foot here. But in practice, there’s a lot more to getting started (or restarted) with investing if you have a small sum of money like $100. And it gets more complicated if you live in Canada, Australia, the U.K., or other countries besides the U.S.

    I know about this because I spent four months putting together an online investing course called Start Investing with $100 (details here if you’re interested in knowing more: http://www.startinvestingwith100.com/faq).

    My recommendation is people begin the process with an initial set of considerations that determine the rest of the steps. And those steps would be choosing the best investment account type, then picking suitable investments (e.g. stocks or diversified index mutual funds), selecting the ideal investment company, opening the account (tricky in itself sometimes), and placing your first trade.

    Let me know if either of you two would like an alternate perspective on the topic because I’d be happy to provide one in whatever level of detail or medium you like.

    @ralf914 - I agree with @TMFGalagan. If you watch the video and get a little context, this might be more valuable.

    @golfamatic - I think your suggestion works well in general. But I know people who do well by starting with investing in a specific stock for their first trade – whether that’s $100 or $100,000. It’s all about the context, goals, and needs of the person.

    @jasjfarrell – Schwab is definitely towards the top, but they’re not a no-brainer in my book. There are too many other investment firms in the U.S. to mention in the comments here, but I can name at least ten that would work well for most people.

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