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You will often hear it said that opening and investing in a brokerage account is a great way to turn your money into a lot more money. This is especially true if you hold your investments for a long time and give them ample opportunity to grow.
But what if you don’t have a lot of money to start investing? Between bills, loans, and other expenses, you might only have about $ 100 to initially fund a brokerage account. In that case, you might be wondering if it’s worth starting right away. And the answer is a resounding “yes”.
The best time to start investing is now
It is easy to postpone investing on the basis of a lack of money to work. But the good thing is that many brokerage accounts today don’t have a minimum balance requirement. This means that even if you only have $ 100 to put into your brokerage account, you can start buying stocks or other assets, like cryptocurrency. (Not all brokerages allow you to buy digital coins, but many do.)
In fact, when it comes to investing, the sooner you start, the better. The reason? One thing that helps investors do well is time. If you give yourself more years to let your investments generate returns, you will earn more money.
Imagine you start investing with $ 100 today and your portfolio is earning an average return of 7% per year (which is a little lower than the stock market average). If you were to do nothing and leave your wallet alone for 40 years, you would end up with about $ 1,500.
Now ideally your goal should be to keep pumping money into your brokerage account over the years so that you can invest even more. But if you’re limited to $ 100 right now, there’s no reason not to start.
How to invest your first $ 100
Since many companies have share prices above $ 100, you may want to favor a brokerage account that allows you to buy fractional shares. With fractional shares, you buy part of a share – instead of a full share. Then, as those stocks gain in value, you profit on a pro rata basis. Fractions of shares allow you to hold more shares when money is tight.
Another option to consider if you only have $ 100 right now is to buy exchange traded funds or ETFs. ETFs allow you to own a bunch of different stocks with just one purchase, and they’re a great way to get more diversity in your portfolio when you don’t have a lot of money to invest.
Start today
There is no reason to postpone investing because your funds are limited. If you have $ 100, search for multiple brokerage accounts to see the benefits they offer and find the one that suits your needs. The sooner you start, the sooner you can start building a portfolio that will allow you to grow your money.
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