Investing may not seem worthwhile if you only have $100 to start with. But never underestimate the power of time and consistency.

If you start investing with $100 at age 25 and continue investing $100 each month, earning 8% annual returns, you'll have nearly $325,000 by the time you're 65. Your total amount invested? Just $48,000. If you've got $100 to invest -- or even less -- here are three smart ways to get started.

A young woman holding dollar bills.

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1. Fund your 401(k)

If your employer offers a retirement plan like a 401(k), investing in it is a great place to start. Your contributions will be automatically deducted from your paycheck, so you won't be tempted to spend it before you invest.

If you get a company 401(k) match, contributing to your plan deserves serious priority. Otherwise, you're saying no to free money. Even if you only have $100 to invest right now, aim to gradually increase your contributions so you can get the full match. For example, you could increase your contribution as you pay off debt or put a percentage of each raise toward your 401(k).

For most 401(k)s, contributions come out of your paycheck before taxes, which means you'll pay less in taxes now and pay Uncle Sam when you withdraw the money later. However, many companies offer a Roth 401(k). You don't get an upfront tax break, but when you withdraw the money in retirement, it's 100% yours tax-free.

2. Invest in S&P 500 index funds

Investing in funds that track the S&P 500 index is the closest thing there is to a guaranteed way to build wealth. In fact, low-cost S&P 500 index funds are Warren Buffett's top pick for most people. You'll become an investor in 500 of the largest companies in the U.S. with a single purchase.

Your investment will pretty much move in tandem with the U.S. stock market. But that's a good thing, because historically the value of the market has always increased over long periods of time. 

To invest your $100 in S&P 500 index funds, try opening a Roth IRA. The Roth IRA is the account you'll use to invest, while the S&P 500 fund is the actual investment. As with a Roth 401(k), you don't get a tax break now, but the money is tax-free in retirement. After you've invested your first $100, figure out how much you can afford to invest each month and set up the account so you're automatically investing in it.

3. Buy fractional shares

To buy a single share of Tesla (NASDAQ:TSLA) stock, you'd need over $660 as of April 2. A single share of Amazon (NASDAQ:AMZN) would set you back over $3,100.

But with fractional shares, you don't need hundreds or thousands of dollars to invest in the priciest stock. Instead, you name your price and get a corresponding percentage of a share. For example, if you invested $100 in Amazon, you'd get around 1/31th of a share.

Fractional shares are a smart way for beginning investors to start choosing their own stocks without spending a lot of money. They're a much safer option for investing on the cheap than penny stocks, which are often super cheap because the company behind them has no established track record or is in financial trouble.

Still, it's essential to do your homework on any stock you buy, whether you're investing in full shares or fractional shares. Any time you buy a stock, you should have a decent understanding of the company and how it makes money.

Should you invest your $100?

Investing is a great way to make your money grow, even if you can only afford to start with $100 or less. But if you don't have at least a three- to six-month emergency fund, putting your $100 in savings is your best bet for now. Having a cushion to survive an unexpected expense or loss of income is one of the best investments you can make in your future.

Also aim to pay off credit cards and other high-interest debt (anything above 8%) before you start investing. Stock market returns are never guaranteed, and you could lose money in the short term. But the money you'll save when you pay off high-interest debt is like guaranteed returns.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.