10 Great Ways to Invest Small Amounts of Money

Introduction

Many people want to earn money through investing but don’t do it as they are afraid of losing money. But things have changed quite a lot in recent years. More and more people are getting into investing. Investing has been easier than ever before. There are lots of ways in which you can invest $100. So it is a great time for you to earn money through investing. You don’t have to invest large amounts, you can even invest small amounts. 

Here are a few ways in which you can invest small amounts of money.

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M1 Finance

If you have ever heard about Robo financial advisors then this is one such solution. However, M1 Finance is quite new when it comes to Robo advisors. This is a great option for people who want to invest in small amounts. The great thing about M1 Finance is that it is completely free to join. Not only that but it also does not ask you to make minimum investments when you start using it. One will be able to invest in ETFs and functional shares of stock.

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Dividend Reinvestment Plans

If you are someone who is interested in stocks then it is better to buy stocks that provide high reinvested dividends. For those who don’t know dividends is the amount of money paid by the companies to its shareholders. Many companies out there give away a chunk of the money they earn to the people who hold their shares. If you buy more of these shares then you can increase your earnings. But the problem with these types of shares is that you have to hold a large number of shares if you want to get good money. 

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Axos Invest

Axos Invest was previously known as WiseBanyan. This is considered to be one of the best investing apps out there. Axos Invest is a platform that allows you to invest in trade ETFs. By doing this you can receive financial advice for free. But you need to have a minimum balance of $1. The great thing is that you can start investing with as little as $10. It is completely free to have a simple brokerage account but you have to pay to use other services. 

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Robinhood

This is one of the most popular apps when it comes to investing. Many people are aware of Robinhood. It is an application that allows people to trade ETFs and shares of stock. Not only that but it also gives you the ability to share cryptocurrencies. The best thing about this application is that it is completely free. Which makes people wonder how Robinhood makes money. It doesn’t ask you for a minimum investment but you need $2000 if you want to open a margin account.

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High-yield Savings Account

Many people know about these accounts but do not have one for reasons unknown. But opening a high-yield savings account is a great thing if you want to start saving money. However, you have to find the right bank that will pay you a good amount of interest in depositing money into your account. If you go to any of your local banks then you are most likely to get low interest for your money. But there is good news. You can find many online banks that offer a high-yield savings account.

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401K Plan

You should definitely get a 401K plan if your employer offers you one. This is a retirement plan that is sponsored by your employer.  When you get to a 401K plan you will direct a small percentage let’s say 3% of your salary towards your retirement fund. Your employer will match this amount and the total amount will be deposited into your account. That means if you direct a $100 to your 401K account then your boss will also add another $100 to it. But it is not true in all cases. Sometimes if you decide to put 5% of your salary into 401K your employer may only add another 2.5% but that’s. So you make sure that you include this when you create a financial plan. 

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Acorns

Acorns is probably one of the most popular and best micro investing apps that are available in the market. This is an application that allows you to invest in bonds, ETFs, and stocks using your spare change. Acorns is free if you are a college student. If you are not a college student then you have to pay $1 a month to get started. You can link this application to your bank account and use it for paying bills. If you pay $10.60 for a meal then it will be rounded up as $11. The 40 cents will be invested through Acorns. 

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Peer-to-peer lending

This is one of the recent trends that is gaining traction lately. You can earn money by investing through peer-to-peer lending platforms. For those who don’t know what peer-to-peer lending is, it is an application that allows you to fund loans of other people. Here, the people who want a loan will ask money from lenders and the lenders have a choice to fund their loans. You don’t have to fund the entire loan. One can choose to fund a part of it. You will get interested in the money you have given. These applications are very secure and they don’t reveal any of your personal information. 

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Stash

Stash is another micro investing app that is very popular. This platform is similar to Acorns as it also allows you to invest in small amounts of money. It lets you buy ETFs and fractional shares. It allows you to invest as little as $5. The best thing about this application is that it doesn’t take a commission on trades. But you need to have a monthly subscription to use it which is nothing to worry about as it is only $1.

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Mutual Funds

This is probably the most common answer you would have received when you asked someone where to invest in small amounts. You should find mutual funds that have low expenses. Many times these mutual funds companies take one or two percent of your total amount which affects your overall earnings. But due to the emergence of a lot of these firms companies are offering products that have a low expense. 

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Betterment 

Betterment is another Robo advisor in the investing space. Even though it is one of the newest platforms it has gained a lot of popularity in recent years. It does not have a minimum balance and charges 0.25% as an annual fee. This platform uses AI technology to fund a bond portfolio or stock. These are really good at reducing tax liability while maximizing your returns. 

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Conclusion 

These are some of the ways in which you can invest small amounts of money. If you still don’t have any idea about investing then read some of the best investing books that are available in the market.

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