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 145,000 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-Year EPS Est.

CAPS Rating

3PAR (NYSE:PAR)

$401.6 million

$50.05

NC

33%

***

Barrett Business Services (NASDAQ:BBSI)

$142.6 million

$13.60

33%

30%

*****

Bridgepoint Education (NYSE:BPI)

$791.3 million

$14.79

46%

30%

***

Calgon Carbon (NYSE:CCC)

$833.4 million

$14.89

23%

23%

****

Coinstar (NASDAQ:CSTR)

$872.6 million

$28.09

24%

29%

**

Source: Yahoo.com. NC = not calculable, 3PAR reported EPS of $0.03 vs. $0.00 est.

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 here, and their favorites would be a good place to begin.

An alternative opportunity
While Netflix (NASDAQ:NFLX) sold its soul -- and sold out its subscribers -- to keep the gravy train of new movie releases flowing, the studios are ultimately going to have to let their films hit the rental boxes on the "street date." Right now they view the kiosk rental niche, primarily Coinstar but soon to be joined by Blockbuster (NYSE:BBI), as a revenue-destroying proposition. If people can rent the latest release for a dollar or so, there's less incentive for them to buy it. The studios want the maximum profit potential from their releases.

Understandable, but if the market researchers at NPD Group have it right, the kiosk channel will control 30% of the rental market this year. That kind of connection with the consumer is going to force the studios' hand, and Coinstar, with more than 22,000 kiosks at grocery stores, mass merchandise outlets, and fast food restaurants, and averaging 900 installations a month, will be the ultimate beneficiary.

While movie rentals remain the big growth story for Coinstar, it also deploys coin counting machines and offers money transfer services that give it over 90,000 points of contact with consumers worldwide. That network of interactions is what attracts CAPS member jnh721:

They are a unique & convenient solution for the services they provide. They are increasing not only in their business; but return business in their locations is increasing. Good dynamics. 

As the smoke and dust clear and settle from expansion, they should become another icon of Americanismo in 2 to 5 years. Cash flow??!! (no pun intended). I'd gladly count Grandpa's Silver quarters and dimes for a small fee? :) 

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 Lynches 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!

Netflix is a Motley Fool Stock Advisor selection. 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.