How to invest 100 dollars?
What can you actually do with a 100 dollars? Quite a lot actually.
This post is about how to invest a 100 dollars.
The 7 ways on how to invest a 100 dollars:
1. High-yield savings account
High-yield savings accounts are a great option if you’re looking for high return while being liquid. You would have the flexibility of being able to withdraw your money whenever in the case of an unexpected expense. If you don’t know what to do with the 100 dollars just yet, you could park it in a high-yield savings account while you do decide. Check this post out for the best high yield savings accounts!
2. Index fund
Index funds are diverse, passive, have low to no expense ratios, and track the returns of a benchmark (typically the S&P 500). Fidelity has a plethora of index funds you could invest in that index funds are an attractive choice when it comes to investing a 100 dollars. Check this post out for the best index funds for Roth IRA!
3. Series I Bond
Bonds are essentially synonymous with safety. They carry the lowest risk since they are backed by the government. Therefore, bonds are the safest vehicles of investments. However, because of the low risk, this typically means they are also the lowest returns.
Series I Bonds, in recent years, have gained a lot of popularity due to their high returns as they match inflation. If you’re willing to park the a 100 dollars for at least 1 year, you could look into investing in a Series I Bond. Check this post out for more information on the pros and cons of Series I Bonds.
4. Real Estate
Kind of. While a 100 dollars can’t really get you that far with purchasing a property, you could invest in a real estate investment trust (REIT).
A REIT is a type of investment that enables investors to buy shares of real estate, similar to an index fund.
The best part about REITs are that there is a requirement to distribute, at minimum, 90% of their taxable income to the shareholders. This will come in the form of dividends. If you’re interested in investing into real estate, but don’t quite have the capital for a property, a REIT might be a good option!
5. (Fractional) Stock
The best part about financial brokerages is that fractional shares exist . For example, even though a stock price is $300, you can still invest the full a 100 dollars to purchase ⅓ a share. Instead of waiting until you save up the full $300, which significantly lowers the barrier to entry for many investors.
6. Certificate of Deposit (CD)
Similar to bonds, this is an investment offered by banks. The concept is similar to bonds, only bonds are backed by the government and CDs are backed by banks. You could invest a 100 dollars into a CD which means leaving your money on deposit for a fixed term. The term could be anywhere between 6 months to several years. The bank would pay you a fixed interest rate on that deposit.
7. Invest in Yourself
In this day and age, the world is constantly changing. Some jobs that existed 10 years ago have since been eliminated, which means it’s all the more important to keep learning new skills.
Take a course, get a certificate, learn a new skill.
While it may not immediately pay off, investing in yourself will always be worth it as it could lead to more opportunities and lead to higher earning potential! It’s about playing the long game.
To reiterate,the 7 ways on how to invest a 100 dollars are:
- High-yield savings account
- Index fund
- Series I bond
- Real Estate
- (Fractional) Stock
- Certificate of Deposit (CD)
- Invest in yourself
There you have it! How to invest a 100 dollars! Interested in learning more? Check out this post for investing for beginners with little money!
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