The Oracle of Omaha, Warren Buffett, turned an initial bankroll of $10,000 into a multibillion-dollar conglomerate. Shelby Davis began with $50,000, and he amassed a $900 million fortune. These inspiring stories give us all hope that we'll be able to achieve our own financial dreams. But what if you don't have $50,000, or $10,000, or even $5,000 to get started?

Fear not, Fool -- you aren't doomed to penury and misery. You don't need to be a trust-fund baby to start securing your financial future. Just follow these four simple steps:

  1. Start today!
  2. Invest regularly. Every month, put away $250, $100, even $50.
  3. Look to the stock market for your best hope of realizing your dreams.
  4. Seek undervalued small-cap stocks for your greatest returns.     

Why small caps?
Because they offer the greatest potential for market-beating returns. Institutions tend to ignore these tiny stocks, and analysts don't cover them. By the time anyone realizes they're there, they've already grown and appreciated in price.

To find these future giants, we'll screen for stocks with:

  • Market values less than $3 billion, to qualify as a small cap (but no micro caps).
  • Earnings surprise of 20% or more last quarter.
  • Long-term earnings growth potential of at least 20%.

We'll filter our findings through the collective investing wisdom of the more than 140,000 professional and novice investors in our Motley Fool CAPS community. If the best and brightest CAPS players think these stocks hold potential, then we ought to take notice, too.

Here are some of the stocks this simple screen found:

Company

Market Cap

Share Price

EPS Surprise

Median Analyst 5-Yr. EPS Est.

CAPS Rating
(out of 5)

Isilon Systems (NASDAQ:ISLN)

$434 million

$6.75

67%

23%

***

Smith Micro Software (NASDAQ:SMSI)

$401 million

$12.39

21%

20%

****

Starent Networks (NASDAQ:STAR)

$1.8 billion

$25.52

47%

23%

***

STEC (NASDAQ:STEC)

$1.6 billion

$37.90

24%

50%

**

SunPower (NASDAQ:SPWRA)

$3.0 billion

$31.47

71%

31%

***

Source: MSN MoneyCentral Deluxe Screener; Yahoo! Finance.

Of course, this is not a list of stocks to buy. This is a starting point for more research. We need to look more closely at these companies to see if analysts' faith in them is well-founded, but we've got the CAPS community helping us, and their favorites would be a good place to begin.

Clouds still gathering over solar
Last week, we discussed the big news First Solar (NASDAQ:FSLR) made regarding its agreement to build a 2,000-megawatt solar power plant in China, which caused its shares to surge more than 10%. Still, caution was urged because there was just so much ambiguity surrounding the deal.

Even so, solar companies are going to need these deals if they want to grow, and it was CAPS member WFOwen's belief that SunPower would also be signing similar agreements and generating a "huge influx of capital over the next few years."

Yet one of the key components of the First Solar deal was that the "feed-in-tariff" so important to making the project work would be set by China by year's end. Unfortunately, that doesn't seem to be the case now. According to Hapoalim Securities analyst Gordon Johnson, China's National Development and Planning Commission says a determination on the tariff won't come for at least two years.

The rosy projections for growth that have been supporting the stocks of First Solar, Suntech Power (NYSE:STP), and other solar players may suddenly be hit by power outages. Analyst Johnson thinks SunPower has issues all its own that make it an interesting short candidate, though market exuberance could make such an investment difficult in the short term. So unless you see firm numbers from these companies in the future when they announce major contracts, tread warily.

Foolish final thoughts
Academics will tell you that individual investors have little chance of beating the stock market. They say the Warren Buffetts, Shelby Davises, and Peter Lynchs are the exceptions to the rule. We at The Motley Fool don't agree. Stock investing is not brain surgery. Finding good, undervalued companies is not as difficult as the professionals want you to think.

It is possible to make a more comfortable retirement for yourself, even if you have little money to start with or are starting late in life. It is possible to turn $100 into $1 million. You just have to commit: Do it now, and do it regularly. No amount is too small. Let's get started. There's no time to lose!

First Solar and Suntech Power Holdings are Motley Fool Rule Breakers selections. Try any of our Foolish newsletter services today, free for 30 days.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.