How to Invest with $100 or less

According to a Forbes study about millennials and investing, 66% of millennials want to invest.  If so many millennials want to invest, what is stopping us?  Is it lack of knowledge?  Lack of finances?  Or even student loan burden?

“37% of millennials felt that their peers were ahead of them either in financial stability, current income, or saving for the future.”  I don’t want you to feel like your behind because it is so easy to get your feet wet in investing.  You don’t need to know everything about the stock market, you don’t need to be student loan free, and you don’t need a lot of money!

Check out these 6 companies that allow you to invest for $100 or less:

How to invest with $100 or less

Acorns

Acorns is an app that makes investing possible for anyone!  Once you sign up for the app, you link your checking account or savings account and it automatically rounds up and invests your spare change.  In addition to investments by rounding up previous transactions, with Acorns you can set an automatic investment for as little as $5 on a recurring basis.

Acorns invests in 6 different ETF’s (exchange traded funds).  Your specific portfolio is based on a specific objective like aggressive and the 6 ETF’s are allocated to your account based on that objective.  The app makes is easy to determine which portfolio is best for you.  Your portfolio is chosen based upon your risk tolerance and time horizon.

  • If you plan on investing for a shorter amount of time, the app will suggest a conservative portfolio.
  • If you plan on investing for a longer amount of time, the app will suggest a more aggressive portfolio.

The major benefits of Acorns include the fact that there is not a minimum balance requirement and there are low fees.  In addition, the account fees are $1 per month for balances under $5000 and 0.25% annually for balances over $5000.

I started using Acorns in January of this year.  I have been surprised at how fast my spare change has added up.  After only 10 months, my account balance is over $500 just from rounding up my spare change.  In addition, I love the regular emails about investing that I receive from the company.  For example, when there was market volatility after Brexit in May, I received an email about staying the course of investing and not freaking out.

For more information about my personal experience with the app, check out this previous article posted to the site Acorns: Start Investing your Spare Change.

If you are ready to try Acorns for yourself, click here.  You’ll get $5 added to your account to start off with.  I’ll also get $5 added to my account. 🙂

Stash

Stash is also an app that makes it easy to invest for beginners.  With Stash, you can link your bank account to make regular reoccurring deposits which can be as little as $5 each.  In addition, you can also make one-time deposits when you are looking to invest.

Similarly to Acorns, Stash is invested in ETFs (or exchange traded funds).  During the setup process, Stash asks questions regarding your interests, beliefs, and goals.  Through the questionnaire, Stash helps you to invest in what is most important to you.  There are about 30 investments to choose from.

A few of the investing options with Stash include:

  • Clean & Green: Invest in companies producing solar, wind, and other forms of renewable energy.
  • Do the Right Thing: Invest in socially responsible businesses that make positive impacts on the world.
  • Young Money: Invest in companies that could benefit from the spending power of millennials.

Similarly to Acorns, the major benefits of Stash is a low minimum balance requirement and low fees.  With Stash, the account balance minimum is $5.  The account fees are $1 per month for balances under $5000 and 0.25% annually for balances over $5000.

I tried Stash out earlier this year.  I like how there is more flexibility to choose what you want to invest in.  In addition, the app has a tool to show the potential growth of your portfolio.  The tool takes into account how a potential monthly deposit amount and the growth potential of the market.  Then it displays the potential long-term value of your account.

For example, with a potential monthly deposit of $50, growing at a 5% match each year, I’d have the following balances in my account:

  • 1 year –> $629.69
  • 5 years –> $3,419.53
  • 10 years –> $7,788.79

I like that the app encourages long-term investing in the market and easily shows the growth.

If you are ready to try it out, use my link and you’ll get $5 added to your account (and I will too)!

Robinhood

Money can be a barrier to entry for investing into stocks.  Many platforms charge fees per trade of around $10 and have minimums from $500-2000.  Robinhood was started to erase that barrier to entry.  The app literally allows for free trading of U.S. Stocks and ETFs with no minimum to establish an account.

Robinhood does not charge fees to open an account or to maintain your account.

In order to make trading so affordable, they have taken out many of the bells and whistles associated with other platforms.  Therefore, the app doesn’t provide suggested stocks, suggested allocation, or investment education like a lot of the other similar apps.

I tried out Robinhood to see how easy it would be to trade.  It literally only took 4 minutes to create an account.  Once in the app, it is pretty bare bones.  You can search by a company name or ticker symbol.  Once you pull up the company, it shows the return information as follows: 1 day, 1 week, 1 month, 3 months, 1 year, and 5 years.  In addition, the app provides a brief description and related news article of the stock of ETF.

When you make a deposit into Robinhood it typically takes 4+ days for you to be able to trade.  Therefore, the app def isn’t for someone who is looking to do heavy trading.  However, the app is perfect for anyone who has a few stocks in mind that they want to buy and hold for a while.

If you are ready to try it out, you can use my link here.

how-to-invest-with-100-or-less

Prosper

Prosper is a peer to peer lending platform.  It was the first peer to peer lending company founded in 2006.  Prosper loans are very similar to traditional bank loans – there is no collateral involved.

Minimum investment: $25

Fees to Investors: 1% annually

Account types available: Taxable or IRAs

When investing with prosper, each borrower is given a rating based on their income, employment status, debt/income ratio and credit score.  It is up to you to search through the borrowers and find which notes you’d like to invest in.  When searching for notes, those from borrowers with lower credit scores have higher interest rates because they are riskier.  The borrowers with higher credit scores have lower interest rates and are typically less risky.

In addition, investments are not FDIC insured.  Therefore, there is a chance that your note defaults.

Prosper does have some requirements for Investors.  You must be 18 years of age, live in an eligible state, and some states have financial eligibility requirements of 70k annual gross income and 70k net worth.  Check here for more information about the eligibility to use Prosper based on your state.

Ready to give prosper a try?  Click here!

Lending Club

Similar to prosper, Lending club is also a peer to peer lending platform.  You can invest in other people’s debt with possible higher returns than traditional investments.

Minimum Investment: $25

Fees to Investors: 1% annually

Account types available: Taxable or IRAs

Similar to Prosper, you can sort notes by the following categories: job tenure, government job, debt to income ratio, loan purpose, credit score, and more.

Lending club has similar investment requirements.  You must be 18 years of age, live in an eligible state, and some states have financial eligibility requirements of 70k annual gross income (or more) and 70k net worth (or more).

If you are interested in more information about Lending club, check it out here.

Betterment

Betterment is a more advanced robo-advisor.  First, it looks at your goal (i.e. retirement, house down payment, etc…).  Then based on your initial deposit, monthly savings and time horizon, Betterment will tell you the chances of achieving your goal.  Then your account is invested in a mix of 13 ETFs (exchange traded funds) automatically.

Also, Betterment provides more sophisticated account options.  The previous options listed only provide for taxable or regular investment accounts – that means your investments may result in a tax bill.With Betterment, you can also open up an IRA if your goal is saving for retirement.  Therefore, if you have an old 401k or IRA, you can roll those assets into an IRA with Betterment.  Also, if you are investing larger amounts and worried about the effect on your taxes, Betterment provides information regarding tax loss harvesting.

With Betterment, you can also open up an IRA if your goal is saving for retirement.  Therefore, if you have an old 401k or IRA, you can roll those assets into an IRA with Betterment.  Also, if you are investing larger amounts and worried about the effect on your taxes, Betterment provides information regarding tax loss harvesting for limiting the tax bill as much as possible.

Due to the bells and whistles associated with the program, Betterment is a bit higher than the other options.  If you auto-deposit at least $100 per month, the fee is 0.35% per month for an account with a balance less than $10,000.  If you decide not to auto-invest, the fee is $3 per month for an account balance less than $10,000. In the event your account reaches over $10,000, the monthly fee continues to drop.  Visit Betterment for more information!

Related: 4 Lessons the Gym Taught me About Investing

 How to Invest with $100 or less

Have you tried any of the above apps/platforms?  If so, tell us in the comments!

 

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