How to start investing with $100 in 2023 - DollarSprout (2023)

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How to start investing with $100 in 2023 - DollarSprout (1)


You're busy with bills, your fridge is full for the first time in a while, and you have $100 left over at the end of the month. It feels good to finally make progress, even if it's just a little bit.

But now is the time to turn a small victory into a big one.

Instead of spending the rest on random things, you've decided to use that $100 for something more meaningful.

You want to invest.

There are many ways to invest small amounts of money, but not all are created equal.

Here are some of the best ways to invest your first $100.

12 ways to invest your first $100

This list is not a list of hot stocks to buy. This is just a glorified form of gambling that you shouldn't get involved in.

Rather, these are smart and prudent things to do with your money.

1. Start investing with an app

How to start investing with $100 in 2023 - DollarSprout (2)

If you want to start investing in the stock market, there are many cheap or even free options to get started. AlthoughApps make it easyTo make money in the market, you still need to understand some basics.

Only invest what you can afford to lose.The value of most investments goes up and down every day, so don't make the mistake of investing the money you need to pay your bills.

Invest for the long term (at least 5 years).Daily market changes can affect anyone with money emotionally, so it's important to block out the noise. In the long term, the stock market is in an upward trend. In the short term, no one can imagine what this will do.

Get used to depositing and investing regularly.It all comes back to your habits. Your first $100 may not make much of a difference to your long-term returns, but if you deposit $100 a month for a year, you'll now have $1,200 +/- the return on your investment. Most apps allow you to set up automatic recurring deposits; Take advantage of it.

If you're new to investing and want to dig deeper, check out ourinvestment guide.

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2. Settle debts

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Paying off debt is an instant "return" opportunity, but it's often the last thing people think about when deciding how to invest.

Actually,pay debtsit's one of the smartest moves you can make with your money. Here's how the math works:

Scene 1:
Invest $100 in the stock market instead of $100 in credit card debt at 25% interest
Scenario 2:
Pay off $100 of credit card debt that would otherwise accrue 25% annual interest
The value of your investment can go down as well as up.Your outstanding balance will decrease immediately and you will no longer receive interest.
In 1 year you can have $110, $100 or even lose money and go down to $90If you hadn't paid it back, you would have paid ~$25 in interest over the course of a year.
Even with a 10% yield that brings your balance to $110, your credit card debt hasn't disappeared. You still owe ~$25 in credit card interest.By paying off the debt, you instantly made more money by avoiding interest.
$10 investment earnings - $25 credit card interest

=$15 net loss

$0 investment earnings + $25 interest payments you never had to make

=$25 more to your name after one year

For this reason, it is almost always better to bet on high-yield debt before starting to invest in the stock market.

“Credit cards are the worst investment you can make,” is the message from billionaire investor Mark Cuban that people want to understand. "The money I save in interest because I have no debt is better than any return I could get by investing that money in the stock market."

3. Buy $100 worth of nonfiction books

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Due to the fast-paced world we live in now, it seems like books have taken a backseat in most people's lives. Attention spans are getting shorter and many people just don't feel like reading anything more than a Facebook status or tweet (and even this blog post adds to that).

If you want to break with the majority, take a book.

Books offer one of the highest ROIs of almost anything you can buy. Exposure to new ideas can change your life.

Take, for example, autobiographies written by entrepreneurs:

A successful entrepreneur who has already built a thriving business, collected his own pips on his way to the top, and has a perspective most people don't. And if someone like that decides to sit down and share his story and condense his knowledge into a book that he can buy for less than $20, he might as well jump at the chance.

Consider the following: if you are findingassomething in a book that can improve your life, the price of the book is likely to be a drop in the bucket compared to the changes in your life that insight or inspiration can bring.

For example:

How to start investing with $100 in 2023 - DollarSprout (9)"I didn't feel like a flawed jerk, but more like a valued member of the team that I was willing to invest in."

This is a clip of Kim Scott telling a story in her book.apertura radicalabout an interaction he had with Sheryl Sandberg at Google (Sandberg is now COO at Facebook). The rest of this story taught me that it's okay to give someone "harsh" feedback as long as you also show how much you care and want to help them improve. As an entrepreneur, this has helped me countless times.

How to start investing with $100 in 2023 - DollarSprout (10)"Listen, crybaby: this is not your grandmother's house and I am not going to bake cookies and hug you. Many of your financial problems are caused by one person: you. Instead of blaming circumstances and American society for your financial situation, you need to focus on what you can change about yourself. Just as the food industry offers us many choices, personal finances are a confusing mess of exaggerated exaggerations, myths, outright delusions, and we feel guilty for not doing the right thing. If you are not happy with your finances and are willing to take a good look in the mirror, you will discover an inescapable truth: the problem and the solution go hand in hand.Of.“

This is a quote from the opening chapter of Ramit Sethi's book.I will teach you to be rich.. Sometimes we just need to hear the truth.

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4. Invest $100 in an online course

If you can't sit down and read a book for 30 minutes a day, taking an online course is probably the best thing you can do for your own growth.

Learning the skills you want, from experts who have those skills, can have a very high ROI; especially considering how cheap online courses compare to traditional college courses.

Not sure where to start? I recently signed up for a site called MasterClass; Some have dubbed a growing online course platform the "Netflix of self-education." MasterClass offers dozens of courses from world-renowned experts in a variety of subject areas. The quality of the course video production is impressive; You will not get bored in these courses.

My favorite class so far has been The Art of the Deal by Chriss Voss, a former FBI hostage negotiator (see the trailer below). I don't have any plans to rescue hostages anytime soon, but there are many practical applications of the teachings in Chris's course.

Other courses that made the MasterClass a great investment:

  • Management by Howard Shultz (Former CEO of Starbucks)
  • Self-made startup by Sara Blakey (Founder of Spanx)
  • Business Strategy and Leadership by Bob Iger (Disney CEO)
  • The Art of Magic by Penn and Teller

5. Open an IRA

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Most young people do not want to think about the day when they will stop being "young." However, retirement planning is an important part of life. The biggest mistake most people make when saving for retirement is not starting early. It's normal to want to wait until you're "better" before you start saving money for retirement. It's up to you to resist that urge and start saving now.

Individual Retirement Accounts, or IRAs, offer special tax benefits designed to encourage you to contribute regularly. Opening an IRA is easy, and most brokers allow new account holders to start with much less than $100.

6. Build your cash reserves for emergencies

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If you're one of the 74% of Americans living paycheck to paycheck, building an emergency cash supply should be a priority. Unexpected things happen all the time, and even a minor mishap can send your budget crashing if you don't have an emergency fund.

Have an emergency fund with you.3-6 months of living expensesThat's a good goal, but don't let it discourage you from starting small.

When something you didn't expect inevitably comes up, having an extra cash reserve is much better than relying on credit cards and carrying a balance.

Emergency funds help make some situations less stressful. Some examples:

  • a global pandemic
  • A sudden job loss
  • car repair
  • veterinary bills
  • an unexpected bill
  • travel expenses for a funeral
  • Home emergency repairs

7. Start a business

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A common myth that pervades our mainstream social dialogue is that it takes a lot of money to start a business. Now, more than ever, this is not true.

The entrance fee has been greatly reduced by the Internet. There's nothing stopping someone from buying a domain name and hosting for less than $10 today., the site you are on now, is a company that started on a shoestring budget. What started as a (very) small business has grown into a long-term profitable business employing a handful of people.

The only downside to the ticket price, which is now lower than ever, is that thelevel of competitionis at its highest point. Anyone can start; which means that you are competing with averyOf people. Don't let this discourage you; get motivated

Here are some businesses you can get started with under $100:

  • the blog(como Dollar Sprout)
  • virtual assistant
  • Freelance writer, editor or proofreader
  • dropshipping business
  • advertising texts

For a more detailed list of possibilities, see ouronline business ideasPost or our post onsmall business ideas.

8. Have fun turning used things

Buying something cheap (or even getting it for free) and then turning it into a profit is not only exciting, but also a great way to gain experience in trading, trading, and selling.

if you have$100 additionalIf you're looking for a real entrepreneurial challenge, visit your local thrift store or search for flea markets in your town. If you find a good deal on something you know is undervalued, grab it.

For people interested in flipping, it's important to have an end goal in mind. What do you expect to get from the investment? Doing everything without a clear goal is probably not the best use of your time, since you're basically starting from scratch every time you shop. You're not really "building" something you're interested in, it's more of a hobby.

Possible targets to spin:

  • Turn $100 into $1,000 and use the proceeds to start a new business
  • Complete 10 successful somersaults.
  • Try different negotiation techniques and get familiar with closing a deal

9. Invite someone you admire to lunch

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Success in life often depends on the connections we make and the relationships we build. Relationships don't just happen: you get what you put into them.

If there is someone you look up to, be it a businessman, real estate investor, church leader, parent role model, or anything else, reach out to that person. You don't have to try to "get something out of" the lunch itself. It's about building a relationship. When you treat people well, good things often happen.

10. Invest in your marriage or relationship

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Life is too short to focus solely on how much money you can earn from each transaction. Sometimes the returns we get from our investments have nothing to do with money.

You shouldn't always do this, but if you have some extra money available, you should use it to do something extraordinary for your partner. It could be a date night, a day trip, buying that book you've been looking for, or anything else. The most important thing is to make sure that this matters to them (and not just you!).

Don't neglect your long-term financial goals, but don't prepare to live short, either. Money is a tool designed to enhance our lives, not stress us out.

11. Join a gym

Rising health care costs are a very real thing facing many Americans, and unfortunately, they show no signs of slowing down any time soon. Many health problems are beyond our control, but the only variable we haveI couldControl is how well we take care of our bodies.

Some of the most common health problems facing our population are self-inflicted. Heart disease, type 2 diabetes, stroke, and many other problems are thought to be more common among people with sedentary lifestyles than among those who exercise regularly.

According to a recent study in The Lancet, "physical inactivity is responsible for a significant economic burden."[1]The study estimates that the total economic cost of doctor visits, time lost from work, insurance claims and other costs is nearly $28 billion per year in the United States.

On average, people who exercise regularly have lower healthcare costs.

Invest in your healthmiYour wallet by joining a gym if you haven't already. Worth every penny.

12. Give your resume a makeover

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The biggest raises people often receive don't come from promotions within the same company. Most of the time, the biggest salary jumps happen when you get a new job with another employer.

Since your main job will likely have the biggest impact on your overall income, it's important to make the most of it in terms of salary. If you're thinking about returning to the workforce, or even asking your current employer for a raise, you need to have a top-notch resume.

A resume makeover done right can take you from dull to brilliant. The content of your resume is one thing, but delivery and presentation are just as important to standing out as a hiring manager. If you're not good at designing, sites likeMiResumenPerfectoWe have dozens of templates designed by experts. They'll even walk you through the step-by-step process of creating a resume and make suggestions that match your work experience, all for less than $3.

Another option is to hire an expert to go over your resume with you and help you identify areas for improvement. If a $100 investment here can result in a new job that earns $5,000 more a year, that's a return of 50 times your investment.

Don't Make These Mistakes With Your First $100

When you do your research and decide how to invest $100, you'll likely come across some ideas to avoid.

Invest in penny stocks.Penny stocks are usually penny stocks for a reason. Do not waste your time.

Buy in an MLM.Rather than get sucked into a multi-level marketing scheme where you're likely to lose money (and friendships), find another company to start with that has more control over your product and sales strategy.

sports betsNo matter how well you think you know your sports teams, the game of sports betting is always against you in the long run. The sports betting industry has generated almost $1.4 billion in revenue (with more than $20 billion in bets). Don't add your hard-earned money to your bottom line.

The power of just $100, and it's already available

“What is the point of investing if I only have $100? Any amount I earn from this will be so small that it won't even be worth it."

This is one of the biggest misconceptions people have about investing. Which is only worth it if you can put a lot of money in at once. This could not be further from the truth!

The purpose of investing $100 is not to turn that $100 into $1,000,000; It's about taking the first step to transforming your financial life, forever. If you can invest $100 once, you can do it over and over again. And that's where the magic happens.

Investing is not something isolated.

It's a habit that you build one day, one week, one month at a time.

And the sooner you start, the better; even if it is small.

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