How to Invest $100 | 6 Methods

[Music] hi hello how's it going it's elena and welcome back to my channel bring you guys another finance related video which i'm excited about i sprinkled a few of those into 2020 but i plan on making quite a few more into 2021 so stay tuned as i mentioned in a few other videos in the past kind of talking about finances i mentioned that i just really love talking about financial education and empowerment i feel like there's definitely not enough women in the space it's definitely a very male dominated space the world of finance and finance education and it's something that's just super important to learn for your own independence for your future self so today i want to talk about a few different ways to invest a hundred dollars so a month or two ago or i guess a bit a couple months ago now i made a video on how to invest for beginners so if you haven't watched that i recommend checking that out because i go over a lot of like base level knowledge terms definitions things that you probably weren't taught in school because we definitely weren't taught nearly enough about anything revolving finances in school so i'll link that down below and i'll probably refer to it more than once about this video so first off i am by no means a financial advisor so take everything i say with a grain of salt please do your own education look into things on your own i hope to just inspire you on your own financial education journey so when it comes to the world of investing it's all about risk versus reward you're gonna have to take calculated risks in order to grow your wealth over time and it's going to be a journey of highs and lows it's like a roller coaster but overall there has been generally an upwards curve so so much of it is putting in your money letting it sit riding out the roller coaster so before you get into investing your money i think it's very important to address any high interest rate debt you might have you want to get that paid off initially definitely want emergency savings i know it's not the sexiest thing but trust me i mean literally look around we're in a pandemic if a pandemic can come out of nowhere you never know what might else just kind of surprise you so you really want three to six months of income saved tucked away for a rainy day because you never know what's gonna happen so i highly recommend that it's just kind of like a base before starting off a lot about building wealth is all about the long game it's about patience it's about waiting it out which means it can be a bit slow at the beginning but i think there's some ways to learn and enhance your own financial portfolio so let's dive into a few ideas so while we're on the topic of emergency savings let's talk about high yield saving accounts so high yield saving accounts are essentially an alternative to the bank account your money might be sitting in right now where you can make a small percentage of interest on the money that you save away there it tends to pay more than the national average of a regular savings account so a high yield savings account can be a good option for just slightly increasing your income thanks to the higher interest rate money in these accounts tend to grow a bit quicker it's gonna be very low risk it's gonna be also low reward and while it does not do a lot it is better than just letting your money sit and do nothing at all next let's talk about index funds so if you didn't see my past investing video i discussed a little bit about what an index fund is the way i like to explain it is that it kind of is like a bouquet of flowers so if you're to buy a stock let's say tesla so you buy one stock in tesla that is like one rose and you're holding onto that rose and you're hoping the leaves don't fall off or that it withers and you're hoping it grows and flourishes but putting all your trust in just one stock is can be quite risky so an index one is great because it's essentially a bouquet of a whole bunch of different stocks or bonds so instead of just one rose you got hundreds of roses or even potentially thousands of roses so an index fund is essentially a portfolio of stocks or bonds that tracks a particular market index buying into an index fund is like buying that whole bouquet so if certain stocks start to dip if certain flowers start to wither to just keep going on with my example you have a whole crap ton of flowers to offset it so it's great for a passive investor because it's super hands-off it's considered a great beginner investment because it's pretty low risk because you're having this balance of the stocks across the board you don't have to have any real knowledge of the stock market overall to invest in index funds and it's offering a lot of diversification so again that risk factor kind of starts to decrease because you're diversifying where you're putting your money through this index fund of course in regards to this i'm not telling you to invest in anything specifically it's all about education i highly encourage you to do your own research on index funds on different types of accounts but i'm going to talk about a few of the most popular ones like the s p 500. so the s p 500 index fund essentially mimics the performance of the 500 largest companies or the dow jones industrial average so if you want to invest in the s p 500 you don't have to invest in the individual stocks now you can invest in all the stocks in this index fund through mutual funds or etfs so if you want to invest in something like the s p 500 what you're gonna need to do is open a brokerage account in my personal experience in my finances i use vanguard again you can find this type of index one on a bunch of different major platforms like fidelity charles schwab lynch etc so for example if you're going through vanguard like i personally am there's a couple different options so there's like vu and v5x one is a mutual fund and one is an exchange traded fund or an etf the biggest difference is that the v phi x one has a much larger um minimum to invest it's like three thousand dollars so if you have a hundred dollars that's not the way to go but if you wanna look into other index funds there's a lot of different types of low index funds to learn more about for yourself the goal of an index fund is to put your money in there and then let it sit and let it grow over time for years if not decades and decades and seeing it grow slowly over time as it rides the wave of the stock market essentially obviously don't put all your eggs in one basket you always want to make sure you're putting your money in different areas because again we don't know what's gonna happen so i'm gonna couple a roth ira in this like index fund section so an a roth ira is essentially a tax advantage retirement account that you can invest through so there's like traditional iras and roth iras what makes roth iras really special is that your tax at the front end so then when you pull out the money at the very end once you're at your retirement age of about 59 and a half it is not tax and what's great about that is most likely when you're in my age range i just turned 24 i'm most likely going to be at a lower tax bracket now than when i'm 60 if all things go well hopefully my career just goes upwards and i'm at a higher tax bracket so taxes are taken out of what you earned and then you can access all the profit at the end which is crazy so i feel like everything i've read across the board they're like max out your roth ira account and that caps out at about six thousand dollars okay i'm gonna pull up a roth ira retirement calculator to show you guys the power of a roth ira investing your money compounding interest all those beautiful things freshly 24. let's say i plan to retire at i'm just gonna say 61. but let's say i'm starting with a thousand in my roth ira if we're saying a hundred dollars a month we're gonna say a hopefully anna will turn about eight percent in 37 years your investment could be worth over two hundred and ninety thousand dollars so through that time i'd be putting in on my end about forty four thousand four hundred dollars but the growth is 84 of the total so around 245 000 which is insane the roth ira and the compounding interest like please take advantage of it let's just play around with this to be fun so let's say you start contributing 400 a month so close to around 100 a week instead a million a million dollars it says in 37 years your investment could be worth 1.1 million dollars so clearly the more you invest now has a massive impact on what your future can look like so if you want to start a retirement account for yourself um again i use vanguard so i set mine up through vanguard i opened up a roth ira and you can choose different investments i personally chose the targeted date retirement fund because it essentially does all the work for me i just put money in it picks the investments for me and it gets more conservative the older i get this does have a minimum investment of a thousand dollars so it's something to think about i saved up i knew i wanted to do this so i saved up when i was like 19 to open this account up and then i've been adding in ever since and it's grown quite a bit so start your auth ira next up is the 401k which is another retirement account the beauty of a 401k is that oftentimes it's offered by your employer and they offer a certain amount that they'll match you so what makes it a little bit different too is that this is money that you put in pre-tax so when you take it out at the end at your retirement that's when you're taxed on it a lot of times an employer will offer 401k match which means up to a certain percentage they'll match what you're willing to put into your 401k which is kind of crazy it's essentially free money so i would say if your employer offers you a 401k match definitely if you're able to at least put in a hundred dollars or if not more towards that match percentage it also makes sense if for some reason you're in a super high tax bracket when you're younger and you think you're being a much lower tax bracket when you're older you never know obviously it's super dependent person to person but this is a great way if you have a little extra money on hand to invest that will work towards your future all right i had a bit of a technical difficulty don't mind the change of lighting just just try to go with it so next up i want to talk about stocks when it comes to investing in more individual stocks it definitely is higher risk high reward you really want to be careful when investing in stocks especially if you're going to be investing large amounts of money i takes a lot of time and research and knowledge on the stock market but if you're looking to invest 100 i think it's a really great kind of educational step to get to understand stocks better i'd say there's pretty much less buried entry now than ever before so it's a great chance to try it out learn for yourself as you go for example there's things now such as fractional shares so through a platform like robinhood you can now invest in fractional shares so let's pull up an example okay so the price of tesla stock right now is 735 let's say you want to invest 50 in tesla now you can invest and buy stock in that company for like 50 or lower amounts without having to buy that entire share with this emergence of fractional share investing you could even take that hundred dollars now invest in a bunch of different companies to you know ten dollars here twenty dollars there see what works for you there's also micro investing apps which i think are another good option to kind of get to know stocks a little bit better and invest smaller amounts of money so a good example of a micro investing app would be something like acorn that for every purchase you make on your credit card it rounds up your purchase to the next dollar and it takes that extra money and it invests it for you so let's say you get a 550 coffee it's gonna round that up to six dollars it's gonna take that 50 cents and it's going to invest it one other way is robo advisors it's something else you might want to try out it basically provides portfolio management online but without like an actual human running it instead of paying a financial advisor for their time and their expertise instead what you often will do is essentially answer a series of questions kind of discussing your risk tolerance some of your goals and the robo-advisor will take that information and then help you invest you really can't time the market and i think when you want to learn more about stocks testing the waters is a great way to learn and to slowly get more comfortable with this world of stock investing so best of luck to you on that play it safe do your own research i believe in you so stepping away from the classic financial investing ideas i wanted to talk a little bit about like the diy thrift flip world i think this is a great way to potentially invest a hundred dollars i used to do this a time in high school i would buy stock goods so i'd buy like plain white keds essentially and i'd buy fabric paint i paint galaxies i paint like the union jack flag and i sold them on etsy and i basically started a small business on etsy selling hand-painted shoes hand-painted shirts i stole these cool little what i thought was called the time little choker necklaces i always tried to keep my supply costs as low as possible and then would resell these items through etsy and made like a good amount of money by investing that hundred dollars or so into something that i knew i could create and kind of get crafty on and resell was a great way to invest that hundred dollars another really good way is thrift flipping you could go to the goodwill and if you have a fashion oriented eye spend a hundred dollars on really sick clothing and then resell it for double or triple even potentially quadruple on somewhere like depop or etsy or poshmark depending on the pieces you find you can thrift flip them by kind of like upcycling them yourself so maybe painting it or sewing it in certain areas or adding patches or just kind of adding a personal touch to it a lot of times can increase that value but again like i love shopping on depop so i'm like these cool pants this girl probably spent like three dollars buying like i will pretty gladly still buy for like 28 dollars like you never really know what you're gonna find on there and oftentimes too shopping secondhand on one of those apps i know i'm getting a better deal and it's a bit more sustainable than if i was to shop at other main you know huge retail stores but i also know that that seller's probably making some coin i'm like get it sis i think that whole like crafty flipping clothing diy world there's a lot of potential to invest just a bit of money and potentially resell for a better price lastly it's a bit cheesy but arguably the most important is invest in yourself i feel like a cheesy mom saying that but the human capital that you gain over time is something that can never be taken away from you so if you invest a hundred dollars in books a hundred dollars in a course a lot of times the things that you really take the time to learn can either improve you know the job you're currently in help you get a different better job or just overall sharpen and increase your skill set to potentially use as well to make more money in the future for example i most recently bought a kindle and i got it second hand i want to say it was close to around 100 and it has been such a game changer for me i have fully jumped on the e-reader bandwagon i also use the app libby which i highly recommend you can like find your local public library set up a library card online connect it to libby and then through libby connected to my kimball and i can basically rent essentially almost every book under the sun absolutely for free send it to my kid almost immediately and read whatever i want i feel like having a kindle as well has really gotten me to read so much more to kind of diversify what i'm actually reading so i'm getting back into fiction i've been reading books on spirituality and finances and self-improvement highly recommend any investment in yourself that's going to set you up for success that's going to improve your mental health your physical health your intellectual health i think is always going to be worth it and is a great way to spend 100 because again that's something that can't be taken away from you and will only just be enhanced and increased with time to come okay so i don't want this to be too long and rambly so i'm going to wrap it up but those were a couple ways to invest money moving into 2021 we've got a new year ahead of us it's a good time to kind of just try to think of it as a bit of a fresh slate to dive into and kind of reevaluate the way you see your finances the way you address financial education in your own life i hope that was useful if you enjoy it make sure to subscribe and like it i'd be great if you left me a comment let me know what you enjoyed or if you have any other things that you think would be a great investment as well until next time thanks so much for [Music] watching you

Channel: Elena Taber

Views: 122,011

Rating: 4.9703445 out of 5

Keywords: how to invest, investing for beginners, how to save, graham stephan, nate obrien, investing guide, how to invest $100, how to budgets, money for women, investing for women

Id: _vSxAM3SITE

Length: 15min 46sec (946 seconds)

Published: Tue Jan 12 2021