Investing from an early age is a great way to prepare for a secure financial future. Even if you can only set aside $100 a month, it will add up, and thanks to the powerful effect of compound interest, you will end up with a handsome amount of money in the end. Albert Einstein was not mistaken when he said compound interest is the greatest force in the universe. Many people never invest in their life because they never get started. Start right here with these 6 Ways for Moms to Invest $100:
Invest in an ETF
Unfortunately, with $100, your buying power is limited if you invest in individual stocks. One way to overcome this is to invest in an Exchange Traded Fund or Mutual Fund. These funds let you buy small amounts of various stocks so small investors with limited funds can invest in the whole market or in selected parts of it. Mutual funds and ETFs have different fee structures, minimum investment requirements, and withdrawal limits so make sure you look into this before committing.
Go with an IRA
Using IRAs for your investment can yield huge tax benefits in the long run. The S&P 500 has an average return of about 7% per year, adjusted for inflation. For a steady investment of $100 monthly, you’ll end up with $180,000 after 30 years. If your tax bracket at retirement is 24%, you could end up paying $43,000 in tax on that amount. A tax-advantaged IRA account will exempt you from that tax, plus many more.
Be an Independent Investor with a Brokerage Account
If you are knowledgeable enough, don’t be afraid to make investment decisions on your own by opening a brokerage account. Thanks to the recent move towards commission-free trading, buying stocks in small quantities has become much more practical. Robinhood, for example, allows anyone to open a stock trading account of any amount and start investing away with no commission whatsoever. This is the most direct method of investing out of the 6 Ways for Moms to Invest $100.
Go with Your Employer-Sponsored Retirement Plan
If your employer has a sponsored retirement plan, take advantage of it to prepare for your future. Contributions to such retirement plans are tax-deductible, so at least a part of your invested $100 will be given back to you in tax savings. 401(k) plans are a popular choice among for-profit corporations. If you are not part of these plans, act today to not miss out on one of the best ways to invest $100 a month.
Buy/Sell Items on eBay/Amazon
Make extra income finding low-priced items on eBay/Amazon and resell them for a profit. Many people have been running a successful e-commerce business doing arbitrage. The trick here is to buy and sell the right items. At first, you may be confused and make mistakes. Don’t worry though, you’ll learn the ropes and start generating nice profits while not having to invest a lot of time in the business.
Invest in Yourself
It may sound cliche, but investing in yourself is the best investment you can make ever. Smart people who are successful in life never stop learning. Start by digging deep into your soul and discover what skills you would like to have. Once you have made a list, figure out the best way to learn those skills and go for it. Today, thanks to the Internet, most skills can be conveniently learned online, and many courses cost less than $100 a month. If you have ever wanted to learn coding skills or a new language, set aside some free time to invest in the hobby, and you’ll reap the results afterward if you don’t quit.
These 6 Ways for Moms to Invest $100 are some of the many options out there. Remember, the key to a secure financial future is to simply get started!