When you’re just starting out in the world of investing, it can be difficult to know where to begin. How do you grow your money when you don’t have a lot of it? In this blog post, we will discuss how to invest your first $100 and watch it grow! We will cover a variety of different investment options, so that you can find the best one for you. By following our tips, you can rest assured knowing that your money is in good hands!
1. Start by opening a savings account with your bank
This is a great way to get started, because it’s low-risk and you can access your money at any time. The interest rates are usually low, but it’s still better than keeping cash at home or under your mattress! You won’t see much growth over time because of inflation so this isn’t an ideal long-term investment strategy.
You’ll want to make sure that you’re investing in a high yield savings account (or HYSAs), which typically have lower fees and higher interest rates. The best part about this option is that you can save up more money before withdrawing it, which means there’s less chance of spending your savings on something else.
2. Let the money grow through compound interest
Compound interest means that you’re earning money on your original investment plus what it’s already made for you. For example, if you invest $100 and it earns ten percent each year (with a one percent fee), then over time that same amount would grow to be worth more than $200! The longer the investment period, the greater its value will be due to compounding returns.
For example let’s say you invested $100 into an account today at two percent interest rate annually for 20 years. After those 20 years, you would have $124! If instead we were looking at a 30-year timeline then this amount jumps up even higher – now worth over $160 dollars!
This is why it’s important to start investing as soon as possible – you’re giving your money the chance to grow exponentially over time.
There are a few different ways that you can invest in order to take advantage of compound interest:
– Through a mutual fund
– Buying stocks or ETFs
– Picking a target date fund
– Using a robo advisor
All of these have their own risks and rewards, so be sure to do your research before deciding on one.
3. Use the money to invest in stocks, mutual funds, or ETFs
If you’re looking for a more aggressive way to grow your money, then you can invest in stocks, mutual funds, or ETFs. This involves buying shares of companies or investment products that will hopefully increase in value over time.
Stock investments: A stock is a share of ownership in an individual company. You can buy and sell stocks through brokers like Robinhood, E*TRADE Financial Services Inc., Ameritrade and other similar companies. These are all online platforms that will allow you to invest your money from anywhere at any time!
Mutual fund investment: A mutual fund is a collection of stocks, bonds, or other securities that are bought and sold by a professional money manager. This option can be less risky than buying stocks because the money is spread out over multiple companies.
ETF investment: ETFs (Exchange Traded Funds) are baskets of assets that track an underlying index, such as stocks, bonds or commodities. These investments are usually less risky than buying individual company shares because they’re diversified across multiple companies in different industries.
Mutual funds and ETFs can be purchased through the same online brokers mentioned above as well as other places like Vanguard Group Incorporated.
Before investing any money into these options you should do your research! Make sure you understand the risks and rewards involved, as well as the fees that will be charged.
4. Choose an investment platform and open an account
The next step is to choose an investment platform and open an account. This could be a mutual fund company, online broker, or robo advisor.
A mutual fund company is a great option for those who want someone else to manage their investments for them. These companies will have experts who make all the decisions about which stocks or other securities to buy and sell on behalf of investors.
Mutual Fund Companies: Vanguard Group Incorporated, Fidelity Investments Inc., Charles Schwab Corporation
Online brokers are another option that allow you to trade stocks or other securities yourself with the help of an automated system instead of having someone else manage your investments for you. Online brokers include Robinhood, E*TRADE Financial Services Inc., Ameritrade and more.
Robo advisors are a newer type of investment platform that offer low-cost, automated portfolio management. Robo advisors like Betterment LLC or Wealthfront Inc. will build you a diversified portfolio based on your risk tolerance and investment goals, then automatically manage it for you!
5. Monitor your investments and make changes as needed
Investing is an easy way for anyone with some extra cash lying around or even just a few bucks at the end of each month to build wealth over time.
Once you’ve invested your money, it’s important to monitor how the market is doing so that you can make changes if necessary.
Make sure you understand how much risk you’re willing to take on before investing your money so that when it comes time to make changes as needed, you’ll know what kind of adjustments need made based off this information!
If there’s a crash in stocks or other investments and they lose value quickly over time then don’t panic! This doesn’t mean something bad happened to your investment; rather just like with any type of investing – there are ups and downs.
In the meantime, stay tuned for more updates and tips from me on how to make your money work for you. I’ll continue to share what works (and what doesn’t) as I progress in my own journey towards financial independence. Thanks so much for reading – I hope this article has helped steer you in the right direction!
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