Families often struggle with investing in a variety of different ways. One of the reasons many families struggle with investing is because they don’t know how to start investing with the money they have. Any amount of money can be a good start for investing, even if it doesn’t feel like very much. Here’s how to invest $100 when you have to think about your family with your investments.
1. Retirement Fund
A retirement account can be great for many families, as it’s a good way to make sure that your children don’t worry about you once you get old enough to retire. Plus, many retirement funds offer tax advantages, with some allowing you to invest with post-tax dollars so that your gains aren’t taxed. Starting a retirement fund today can be a great way to save more money for later in your life, and it’s a good investment for a family to prioritize.
2. High-Yield Savings Account for Emergencies
Most experts recommend that families have three to six months’ worth of money in a savings account in case there’s a serious emergency that requires you not to work or that causes you to lose your job. If you put that money into a high-yield savings account, you can make sure that you have an emergency fund that’s also giving you extra money over time. Start your emergency fund with that $100 and keep building it over the months so that you have the best savings.
3. Debt Payments
Not many people think of debt payments as being an investment. However, if you think about it, paying $100 into credit card debt that’s costing you 16% in interest can be a better investment than putting that same $100 into a savings account that has a 2% interest rate. If you have any high-interest debts, like credit card debt and similar high-interest debt accounts, you might want to use your extra $100 to pay off some of that debt. Once you’ve paid off the debt entirely, you can start investing with something that will actually gain money for you.
4. 529 Plan
A 529 plan is a tax-advantaged account that can give your child help with their college costs in the future. 529 plan money can be used for tuition and related expenses, including books, room and board, and apprenticeships, and in many states, contributions qualify for a tax deduction. That means you can save extra money on your taxes by adding money to the 529 plan, making it a great option for anyone who has children that may end up going to college.
5. Fractional Investment
Fractional investing is a way to start investing with a small amount of money. With fractional investing, rather than purchasing a full share of a company, you decide how much money you want to invest, and you own a certain portion of a share. Apple stock, for example, is at about $150 per share, which means you wouldn’t be able to own one full share of Apple stock if you only have $100 to invest. However, with fractional investing, you can decide to invest $100 into Apple, and you’ll own around 2/3 of a share.
6. Full Portfolio
A full portfolio is one of the ways you can diversify your investment options. With fractional investment, you’re typically only investing in stocks. However, there are many different ways to invest your money, and you may find that investing with a full portfolio is more effective for your needs. Investing into EFTs, which are investment funds that include a variety of companies and bonds, as well as purchasing bonds directly, can be helpful in helping you grow your money over time.
7. Brokerage Account
A brokerage account may be a good way to go if you really want to get serious about investing. Brokerage accounts allow you to invest in things like mutual funds, stocks, and bonds, and they even help to guide you on the best investments to make for different risk factors and needs. Plus, some brokerage accounts will give new customer bonuses after making a few eligible transactions. If you want more guidance on how to invest with the money you have, no matter how much money that is, you may want to sign up for a brokerage account.
Conclusion
Investing as a family is often a good idea. After all, you’re not just thinking about your own health, but also about the health of your children. If you’re interested in starting to invest, you don’t have to wait until you have thousands of dollars available. You can start investing with as little as $100, and in many cases, you can even invest with less than that. The earlier you start investing, the more money you can end up with from your investments.
