The BORING but BEST Way to Start Investing With $100

The BORING but BEST Way to Start Investing With $100


Nick Sciple: So, you’ve got
an extra hundred dollars laying around. You’ve built up an emergency fund and can
provide for all your basic needs today. So now, it’s time to invest for the future. While very few people are going to retire
off a $100 investment, investing is a journey. As the ancient Chinese proverb says, a journey
of a thousand miles begins with a single step. You’ve already taken
your very first step — saving $100. Savings are the fuel that
feeds your investing engine. Make a savings plan to make sure you’ll be
able to continuously invest month after month and year after year. You can even set up your bank account to automatically
put aside a set amount every week or month to help. Next, you need to
sign up for a brokerage account. When choosing a brokerage,
be mindful of commissions and fees. While being aware of fees is important for
all investors, it’s even more important for an investor buying $100 at a time.
Many brokers will ask for $7 or $8 per transaction. If you have to pay an $8 commission every
time you buy and sell an investment, you’ll be 8% in the hole right off the bat, and 16%
in the hole if you have to take into account the commissions you’ll have
to pay when you sell the investment. As a result, you’ll probably want to sign
up with a discount brokerage, particularly ones that offer free trades. Once you’ve chosen a brokerage,
it’s time to make your first investment. Now, with that first $100, you could go out
and look for stocks that trade for less than $100 a share;
but we wouldn’t advise doing that. If you were to do that, the value of your
whole portfolio would depend on the results of one company. For just about every investor, an index
fund or ETF is the perfect first purchase. These investment vehicles allow instant diversification
because they represent an ownership interest in all the stocks in the
index that the fund tracks. So, instead of owning just one company, you own
a teeny piece of hundreds or thousands of companies. Further, these funds charge very low fees,
so you get to keep as much of your returns as possible. Even if you don’t get free trades at your
brokerage, many brokerages also allow unlimited free trades of
select index funds and ETFs. As for which ETFs to buy, if you can think of an
investing idea or theme, there’s probably an ETF for it. There are tech-centric ones, dividend-focused
ones, ones that own small companies and ones that own big companies. For new folks, we recommend starting out with
an ETF that mirrors the S&P 500, such as Vanguard’s S&P 500 ETF VOO or the
SPDR S&P 500 ETF Trust, SPY. These ETFs represent ownership in the S&P
500 index, composed of 500 of the largest U.S. companies. Now, astute investors may have looked at these
tickers and realized, “Wait a minute, shares these ETFs cost more than $100.
What am I supposed to do then?” Circling back to the point from the beginning
of the video — investing is a long-term thing. The best thing you can do with $100 now is
create a low-fee or commission-free brokerage account, put the money in it, and then put
yourself in a position to add more money to that account over time. Once you have enough saved, you can begin
buying shares of quality, low-fee ETFs. It may sound unsatisfying, but taking the
long view instead of just immediately buying shares of whatever stock happens to cost less
than $100 will put you in a far better position 10, 20, and 30 years from now. Even after you’ve bought that
first ETF, remember, this is not the end. This is the beginning — the beginning of
an investing journey that will last a lifetime and hopefully make you smarter,
happier, and richer. Thanks for watching! If you have any thoughts on the topic,
or have any future topics you’d like to request, drop a comment for us below. If you’re looking for some help with investing,
we’ve got a free starter kit over at fool.com/start. It covers everything from money-saving tips
to buying your first stock, and it comes with a five-stock sampler
from our premium analysts. If you enjoyed this video, give us a thumbs
up and subscribe to get more content like this from The Motley Fool. Fool on!

25 Comments

  • Jorel Boston

    October 28, 2019

    Remember small fries…A TSUNAMI THAT CAN KILL 250,000 PEOPLE n wash over an entire country…STARTS AS A RIPPLE IN THE MIDDLE OF THE OCEAN….
    Bad example ??? 🤦🏾‍♂️🤦🏾‍♂️😂😂😂

    Reply
  • Emotional Trader YT

    October 28, 2019

    Its Actually Fun 🥱

    Reply
  • Derrick C. Williams

    October 28, 2019

    Investing is a journey. And I am more than ready for the challenge. Shout-out to Shannon Jones.

    Reply
  • GenExDividendInvestor

    October 28, 2019

    The best long term investments are usually boring imho. That being said, while I primarily invest in boring blue chip dividend companies (which is exciting because you get constant dopamine hits as your dividends drip in), I recommend people to just do low expense ratios broad market ETFs like is being recommended in this vid.

    Reply
  • stephen hines

    October 28, 2019

    Would like to know more & more on how us little guys can keep investing our money. Some of us don’t have a lot of money

    Reply
  • raon pansan

    October 28, 2019

    How I can invest my 100 , where I invest ?

    Reply
  • Matthew T

    October 28, 2019

    This fucking sucks this information is out dated Charles schwab has a zero commission trade on efts and on indexes as well as TD Ameritrade

    Reply
  • mark KAO

    October 28, 2019

    Best time to plant a tree was 20 yrs ago

    Reply
  • Maarten Arnou

    October 28, 2019

    Sound advice! As always from the Motley Fool. 👍

    Reply
  • Doofball3

    October 28, 2019

    There are many broadly diversified ETFs that are under $100. Also, new investors might want to consider looking into brokerages like M1 finance.

    Reply
  • Goat Fish

    October 28, 2019

    What about Robinhood?

    Reply
  • heylol33

    October 28, 2019

    ROBERT KIYOSAKI SAYS WHY WOULD YOU BUY STOCKS SINCE THE STOCK MARKET IS IN ALL TIME HIGH

    STOCKS ARE FAKE ASSETS, BUY GOLD INSTEAD

    Reply
  • hikexplore

    October 28, 2019

    The title is misleading. I thought you were going to talk about how to invest into Elon Musks BORING company.

    Reply
  • Paul Yosua

    October 28, 2019

    Just remember we’re in a 10 year bull market, might be better to build up cash reserves for when stocks become cheaper. I’m not saying try to time the market I’m just saying you rarely want to invest in something that expensive, it will correct and probably within the year.

    Reply
  • Zhang Guo

    October 28, 2019

    Yep started with a $100 in an Acorn account 4 year ago and now have a 6 figures portfolio with Vanguard. Baby steps.

    Reply
  • Anonymous

    October 28, 2019

    m1finance has fractional shares, zero commission and auto rebalancing

    Reply
  • Investing Education

    October 28, 2019

    Boring is best when it comes to investin

    Reply
  • Threechlor

    October 29, 2019

    What if you have more money than time. Like say a 50 year old with 100,000 dollars?

    Reply
  • RoyLGamer

    October 29, 2019

    You can start with any amount using M1 Finance with fractional shares and zero commissions.

    Reply
  • DeeJay VEVO

    October 29, 2019

    How do you feel about a market crash or recession? If I were to purchase my first index fund now.

    Reply
  • Dood perfict !

    October 30, 2019

    I just watched your amtserdam advertisement and I was wondering what song was used it the background, and I can't find it. Can you tell me what it is?

    Reply
  • Marcus Brown

    October 30, 2019

    It's amazing how evil Society is when legal marijuana first hit in Colorado 37 people overdosed on oil and wax and stuff like that regular marijuana all you can do is smoke so much till you fall asleep you smoke everyday your resistance goes down and you have to wait a couple days before it comes back up man screws up everything there's nothing wrong with cocaine but all the way they dry it out and had shit to it by the time he gets to America is a fucked up piece of shit the government screwed us again

    Reply
  • Wilfried Vomáčka

    October 30, 2019

    If you buy index, you are not diversified. You just bought one thing. It is same as if you buy stocks of one company.

    Reply
  • cherchez la femme

    October 31, 2019

    I just subscribed

    Reply
  • EquitiesTracker

    October 31, 2019

    The only thing riskier than investing in the stock market is not starting.

    Reply

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