If I were to start investing and had $100 to get started, here’s what I would do… and why I would do it!
I would open a brokerage account and invest the $100 into a S&P 500 Index fund. If there was a minimum “buy in” on the fund and the $100 wasn’t enough, I would purchase the ETF equivalent of that same fund until I had enough to purchase the S&P 500 Index Fund at that brokerage company. I would make sure to automate any reinvestments, such as dividends. AND I would do my best to start having monthly contributions automatically go into that same fund.
Here’s why I would invest my $100 that way…
- Investing $100 into an Index Fund gives you the freedom to not have to worry about trading. You don’t have to try to time the market and know when to get in or get out. Investing means you are thinking long term with your money. The goal with investing is to put your money into an Index Fund, and then allow it to compound over time.
- With an S&P 500 Index Fund, you are widely represented in the market which means you are not risking your money in just one stock. You are represented within the market by hundreds, sometimes thousands of stocks depending on the fund you invest into. This means you are diversified.
- With an S&P 500 Index Fund, you are widely represented in the market which means you are not risking your money in just one stock. You are represented within the market by hundreds, sometimes thousands of stocks depending on the fund you invest into. This means you are diversified.
- Contrary to popular financial guru opinion, I would not wait until my debt was paid off or all my ducks were in a row to get started. If you wait, it might mean the time is never right. The truth is, it’s always the right time to get started with investing. In fact the sooner you invest, the better. Here’s an example of why:
- I would start with ANY amount I had available, even if I didn’t have $100. I would start with $20 if that’s all I had. You can invest with any amount. The important thing is to start with something. For many people, investing is a scary thing. But I’ve found that most people are scared because they 1) don’t have the education and 2) they don’t have the experience. When you start small, you’ve taken the first and hardest step, which is to just do it. From there, all you need is the desire to learn and keep going.
- I would not try to time the market to figure out when to get my money into the Index Fund. Timing the market takes years and years of experience, and again, the sooner you invest, the better (see #3 example above). I would absolutely get in as early as possible to take full advantage of compounding.
- I would manage my investment account myself. There are financial advisors available to help you, yes. But they charge very high fees to do so. AND honestly, they don’t do anything differently than what you will be doing with your investment which is open the account, send the money in, decide which fund to buy, and then sit back and watch it grow. I made the mistake three times through my many years of investing of getting a financial advisor involved, and they did nothing better or differently than me. The worst part of those experiences was I gave over my power to them along with a lot of my hard earned money thinking they would know something I didn’t. In the end, all they kept doing was trying to sell me on annuities and insurance.
- I would sit back and watch the market rise and fall and not react. There were a few times when the market started falling, and I thought I knew what I was doing. I ended up selling out of my investments and putting my money into cash when the market was tanking… And that was the worst thing I could have done with my money. When you sell and put your money in cash, you lock in your price. If instead you allow your $100 to grow with the market, the price continues to go up (this is not guaranteed, but past performance over many years shows the market has gone up), AND you get rewarded with dividends and of course the interest you earn during compounding.
- I would continue to find ways to add to my original $100 investment. Obviously, the more you can throw into your investment account, the better. But this simple little action tends to evade a lot of people. They open the account, invest the $100, and then forget about adding in more. You can do things like set up automatic withdraws from your bank account and automatic deposits into the S&P Index Fund of your choice to make investing really easy! We go over how to do all of this in the Investing With Ease Course. And it’s how you will grow your money on autopilot. Any extra amounts you make, such as a raise at work, side hustle money, gift money, inheritance, could all be sent over to your investment account and allowed to compound for you.
- Finally, once I took the leap to invest my first $100, I would continue to educate myself about investing and the markets and keep a watchful but relaxed eye on my investment. In the Investing Course, I give you tools to watch the market and show you how to keep your emotions at bay when the market swings around. Having this mindset in place will ensure that your $100 as well as any future investments you send off get to do the heavy lifting for you and grow passively. Again, you shouldn’t be actively trading this money. It’s going to grow for you without you having to do a ton of work!
I hope these tips help you see just how powerful it can be to invest $100 and allow it to grow long term. I am not a financial advisor, so remember that this is just financial education. I am sharing my experiences through many years of investing and growing my accounts to over $1 million dollars. I started in my 20’s and wish I had started in my teens or even sooner! I invite you to take a look at the Investing With Ease course to see if it feels like a fit for you. You also have access to my Free Investing With Ease Guide!
Many blessings for an abundant year!
