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:

  • Start today!
  • Invest regularly. Every month, put away $250, $100, even $50.
  • Look to the stock market for your best hope of realizing your dreams.
  • 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 microcaps).
  • An earnings surprise of 20% or more in the latest quarter.
  • Potential long-term earnings growth of at least 20%.    

We'll filter our findings through the collective 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 Estimate

CAPS Rating
(out of 5)

Comtech Telecommunications (NASDAQ:CMTL)

$1.1 billion

$37.14

36%

35%

**

E-House (NYSE:EJ)

$1.4 billion

$17.12

39%

35%

***

Harbin Electric (NASDAQ:HRBN)

$673.4 million

$21.86

91%

23%

****

Shuffle Master (NASDAQ:SHFL)

$505.5 million

$9.43

43%

30%

****

SORL Auto Parts (NASDAQ:SORL)

$229.2 million

$12.54

62%

23%

****

Source: Yahoo.com.

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, so let's start with its favorites.

An alternative opportunity
China has surpassed the U.S. as the world's largest auto market. While auto sales here were imploding, leading to government bailouts, sales in China increased 45%, with people buying 13 million vehicles last year.

China's economy has grown such that a new middle class is flexing its muscle and looking to acquire the trappings of a higher standard of living. It's why General Motors and Ford (NYSE:F) are hoping China can juice their bottom lines. It also doesn't hurt that the Chinese government continues to encourage further sales, such as cutting in half the tax on the fuel-efficient cars that rural Chinese buy.

Investors would do well to look at the companies that will supply the carmakers with parts. SORL Auto Parts and China Automotive Systems (NASDAQ:CAAS) are two that will continue to benefit from this trend. Although their prices have risen by more than 500% over the past year, with further government subsidies, there's little reason to think they won't climb even higher.

CAPS member thekenc figures that SORL Auto Parts can prosper, what with growth estimates still well into the double digits.

From a purely technical standpoint this company looks really good, with the potential exception of overall profit margin. SORL demonstrates that it can continue growing revenue in excess of 20% per year indicates good management. Plus it's P/E ratio is low and the stock has still appreciated in value signifcantly over the past year. It sounds like its' product is a leader too.

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.

Ford 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. The Motley Fool has a disclosure policy.