Forum: money.stackexchange.com
Tags: <investing><investment-strategies>
Title: How can I invest my $100?
Question: Is it feasible to invest a very small amount of money?  If it is, how can I attain it?

Answers:
sents: text: What is your investing goal?
text: And what do you mean by investing?
text: Do you necessarily mean investing in the stock market or are you just looking to grow your money?
text: Also, will you be able to add to that amount on a regular basis going forward?
text: If you are just looking for a way to get $100 into the stock market, your best option may be DRIP investing .
text: (DRIP stands for Dividend Re-Investment Plan.)
text: The idea is that you buy shares in a company (typically directly from the company) and then the money from the dividends are automatically used to buy additional fractional shares.
text: Most DRIP plans also allow you to invest additional on a monthly basis (even fractional shares).
text: The advantages of this approach for you is that many DRIP plans have small upfront requirements.
text: I just looked up Coca-cola's and they have a $500 minimum, but they will reduce the requirement to $50 if you continue investing $50/month.
text: The fees for DRIP plans also generally fairly small which is going to be important to you as if you take a traditional broker approach too large a percentage of your money will be going to commissions.
text: Other stock DRIP plans may have lower monthly requirements, but don't make your decision on which stock to buy based on who has the lowest minimum: you only want a stock that is going to grow in value.
text: They primary disadvantages of this approach is that you will be investing in a only a single stock (I don't believe that can get started with a mutual fund or ETF with $100), you will be fairly committed to that stock, and you will be taking a long term investing approach.
text: The Motley Fool investing website also has some information on DRIP plans : http://www.fool.com/DRIPPort/HowToInvestDRIPs.htm .
text: It's a fairly old article, but I imagine that many of the links still work and the principles still apply If you are looking for a more medium term or balanced investment, I would advise just opening an online savings account.
text: If you can grow that to $500 or $1,000 you will have more options available to you.
text: Even though savings accounts don't pay significant interest right now, they can still help you grow your money by helping you segregate your money and make regular deposits into savings.
answer_details: author: money.stackexchange.com/users/5973/David Ogren
score: 12
sents: text: Sure.
text: For starters, you can put it in a savings account.
text: Don't laugh, they used to pay noticeable interest.
text: You know, back in the olden days.
text: You could buy an I-bond from Treasury Direct .
text: They're a government savings bond that pays a specified amount of interest (currently 0%, I believe), plus the amount of the inflation rate (something like 3.5% currently, I believe).
text: You don't get paid the money -- the I-bond grows in value till you sell it.
text: You can open a discount brokerage account, and buy 1 or more shares of stock in a company you like.
text: Discount brokerages generally have a minimum of $500 or so, but will waive that if you set the account up as an IRA.
text: Scot Trade, for instance.
text: (An IRA, in case you didn't know, is a type of account that's tax free
text: but you can't touch it till you turn 59 1/2.
text: It's meant to help you save for retirement.)
text: Incidentally, watch out of "small account" fees that some brokerages might charge you.
text: Generally they're annual or monthly charges they'd charge you to cover their costs on your account -- since they're certainly not going to make it in commissions.
text: That IRA at Scot Trade is no-fee.
text: Speaking of commissions, those will be a big chunk of that $100.
text: It'll be like $7-$10 to buy that stock -- a pretty big bite.
text: However, many of these discount brokerages also offer some mutual funds for no commission.
text: Those mutual funds, in turn, have minimums too, but once again if your account's an IRA many will waive the minimum or set it low -- like $100.
answer_details: author: money.stackexchange.com/users/5393/Patches
score: 7
sents: text: You could also start a business.
text: I ran a project called the Thousand Rand Challenge a few years ago in South Africa where we supported people in starting a business for about $100 each.
text: Some of them were surprisingly profitable.
text: You can find a few ideas at the wiki site.
answer_details: author: money.stackexchange.com/users/1390/Turukawa
score: 3
sents: text: Yes, it is.
text: Got to start somewhere.
text: Typically directly through a company itself.
text: Check out this site that lists a bunch of them and their minimum requirements.
text: Not many only accept $100 but there are a few.
text: ie.
text: ACTIVEnergy Income Fund , CIBC , COMPASS Income Fund ,
text: Suncor Energy Inc. and a few others.
answer_details: author: money.stackexchange.com/users/5629/RDL
score: 2
sents: text: There are websites out there that let people apply for micro-loans, and let other people fund those loans, and get a percent of the interest back as the loans are paid off.
text: I have heard of people with spare cash "investing" in these sites.
text: However, I don't think there is a guarantee of return of your money, and I have heard mixed reviews by people, so I will not link to any such sites here.
answer_details: author: money.stackexchange.com/users/5509/Steven
score: 1
sents: text: A safe investment would be to get a 5-year CD from Ally Bank.
text: No minimum deposit and no monthly maintenance fees.
text: 1.74% APY at the moment.
text: I would choose a 5-year CD since the early withdrawal penalty is only 60 days interest, which will be negligible for a $100 investment and increasing the term significantly increases your interest rate.
text: Regarding other suggestions: Even if you find a way purchase stock commission free, it will probably cost a $5-$10 commission to sell, wiping out probably a year or two of gains.
text: Also, I-Bonds must be held for a year minimum, which is problematic.
text: At the end of the day, it's probably not really worth your time to do any of these.
text: $2 a year or $5 a year, it's still fairly insignificant and your time is surely worth more than that.
answer_details: author: money.stackexchange.com/users/3931/Scott McIntyre
score: 1

Summary of the answers:
You can open a discount brokerage account and buy a share in a company you like. The money from the dividends could go into adding shares. A savings account can also be a good option for putting money aside.
You could buy shares in a company and use the money from the dividends to buy additional shares, or buy an I-bond from Treasury Direct. Even though the interest is not significant right now, putting money in a savings account can still help grow your money, especially if you make regular deposits. You could also start a business. A 5-year CD from Ally Bank would be a safe option.