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How to Start Investing with Just $100

Investing doesn’t require thousands of dollars to begin. In fact, you can start building wealth with as little as $100. Whether you’re a beginner or someone looking to diversify, this guide will show you how to make your first steps toward financial freedom with just a small amount of capital.

1️⃣ Open an Investment Account

Before you can start investing, you need an account. Here are some popular options:

  • Robo-Advisors like Betterment or Wealthfront: These platforms allow you to invest in low-cost, diversified portfolios based on your risk tolerance.
  • Brokerage Accounts: Platforms like Robinhood or Fidelity allow you to buy individual stocks or exchange-traded funds (ETFs).

2️⃣ Invest in Low-Cost ETFs or Index Funds

Exchange-Traded Funds (ETFs) and Index Funds are excellent options when you have a small amount to invest. These funds track entire market indices like the S&P 500, meaning you’re investing in a broad group of companies without having to pick individual stocks.

  • You can start with as little as $50 or $100 in a diversified index fund, and it will spread your money across dozens (or even hundreds) of companies.

3️⃣ Dollar-Cost Averaging (DCA)

With only $100, you might not be able to buy a lot of shares of expensive stocks, but you can use dollar-cost averaging. This strategy involves investing a fixed amount of money consistently over time, regardless of the market’s fluctuations.

  • Example: Invest $25 every week or month. This method helps smooth out market volatility and reduces the risk of buying all at once at a high price.

4️⃣ Consider Fractional Shares

Fractional shares allow you to buy a portion of expensive stocks.

  • Platforms like Robinhood, Fidelity, and Charles Schwab let you buy fractional shares of popular stocks like Tesla, Apple, or Amazon with as little as $1.

5️⃣ Explore Peer-to-Peer Lending

Another option to invest with $100 is to try peer-to-peer (P2P) lending platforms like LendingClub or Prosper.

  • These platforms allow you to lend money to individuals or small businesses and earn interest on your loans.
  • You can start with as little as $25 per loan, and while it’s riskier, it can be an interesting option for diversification.

6️⃣ Start a High-Interest Savings Account or CD

While not technically "investing," a high-yield savings account or certificate of deposit (CD) can be a good way to earn passive income with very little risk.

  • Many online banks offer 1.5% to 2% annual returns on savings accounts, allowing your $100 to grow steadily over time.

Final Thoughts

Investing is all about starting early and being consistent. Whether you’re looking for long-term growth or just a way to make your money work harder, starting with $100 is a great way to get your feet wet and build your confidence in the market.

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