Turn $100 Into a Bright Future Investing Tips for Students

Can this small amount actually grow into something bigger? The answer is yes! Learning how to invest is something that anyone can learn with as little as $100 to start. But it takes time, effort, knowledge, patience, and courage. Colleges and universities do very little to help people understand the fundamental economics of their finances, leaving many people lost and frightened with the concept of investing.

This is why this article seeks to shatter that world of mysticism into very simple measures that guide us toward making tangible progress in our finances. Excited to turn your 100 dollars? Let’s jump in on how you can begin with as little as possible and let your imagination do the rest. 

First Step: Consulting a Bank for a High-Interest Savings Account 

Before dabbling in the unpredictable stock market or volatile cryptocurrencies, a high-interest savings account is where the magic begins. Just like the name suggests, a high interest savings account acts as a warm welcome for dollars and helps them grow in leaps and bounds. Remember: before you can start thinking of adventures, you need to build that emergency fund with those greenbacks.

So why are these features so important? Life for students comes with so many spontaneous difficulties. Financially punting losses like unexpected textbook purchases or mid semester laptop failures will quickly eat through your budget and standard of living. This means that remaining in such tough situations becomes a cinch with having emergency funds. Without salvation funds in a reasonable time frame, it leads you to unreasonably priced, urgently needed loans.

Search for accounts that provide the highest returns and immediate access to funds like those offered by Ally Bank and Marcus by Goldman Sachs. Although the interest earned will not be life-changing, estimated to be around 0.7%, it is a safer option to begin with. In this scenario, your $100 investment is likely to retain its value against inflation, supporting your self-confidence in financial management. What is one budgetary surprise that an emergency fund might prepare you for?

Safeguard Your Assets: Through the Purchase of Gold.

Have you pondered the reason behind referring to gold as a “shelter”? The U.S. dollar has experienced a staggering 95% depreciation in value since 1913. Gold, on the other hand has remained consistent in value. If, in the year 2000, you had $100 worth of gold, it would today be valued at approximately $580, not because of gold’s inherent value, but due to changes in dollar value. Gold serves as a safeguard against inflation, anchoring one’s finances in volatile economic conditions.

You may decide to invest in gold by purchasing physical bars or coins; however, this comes with a certain markup. For a more convenient alternative, consider purchasing a gold ETF like GLD from Robinhood, which is easier to liquidate. In terms of risk, gold is very low (approximately 2 out of 10) but also provides a slow rate of growth. Therefore, it is more beneficial for those who want to preserve their wealth rather than accumulate it at a faster pace. So tell me, do you need to protect your money or focus on accumulating it more urgently right now? 

Grow Steadily: The Magic of Index Funds 

Picture being the fractional owner of Apple, Microsoft, and Amazon without having to manually select their stocks. This is the wonder of index funds, which group and market the best-performing companies into one investment. With index funds, you do not have to dedicate time because they offer a diversified composition serving as a one stop reinvesting solution.

Each index fund is like a playlist of the stock market’s wonderful tunes, proven to be diverse and steady. With these index funds, you can realize as much as 7% average annual return – meaning for every 100, you could invest monthly, and after 30 years, owing to compound interest, you’ll have over 123,000 USD.

Index funds, such as the S&P 500, are beginner-friendly as they have a low level of risk (3 out of 10). Brokers such as Vanguard and Fidelity allow you to open an account and start investing from as little as $100. Additionally, a Roth IRA can be established that allows for tax-free profit shielding. The key advantage is that compounding returns need to be harnessed early on. Wouldn’t it be astonishing to know that your funds are growing while you pursue your education?

Partial Property Ownership: Real Estate Investment Trusts (REITs)

If you want to buy a house but do not have the finances readily available, don’t panic. Real Estate Investment Trusts allow you to invest in income-generating properties such as apartments and shopping malls without buying them outright. It’s like owning a piece of the front door while others own the windows. Moreover, REITs often provide a hefty 10-12% annual yield through rental dividends, which surpasses returns offered by traditional stocks.

Using platforms such as Trading 212, one can invest in a REIT ETF with as low as $100. While they are moderately risky (3/10), they do provide passive income and diversification. For students, this gives them exposure to real estate investment without the hassle of managing a rental property. What type of property would you like to own someday?

Flip for Profit: Buying and Selling Items

Do you have an eye for bargains? From Pokémon cards to vintage technology, buying and selling items can grow your $100 initial capital. The level of risk is fairly moderate (about 4/10), but the rewards, like selling $75 model engines purchased on Facebook Marketplace for resale on eBay, can be gratifying.

Familiarize yourself with items whose prices you can check and sell to specialized platforms. While learning the items hands-on prepares you for bigger investments down the line. What are you passionate about that you can sell?

Individual Stocks: Choose Your Own Winners 

If planning on purchasing stocks of BMW or Tesla, bear in mind individual stocks are significantly more exciting yet risky (6.5/10). Always choose businesses whose finances and leadership are strong. Success does lie in luck, but choosing the right company at the right time mixed with guessing works, too. One drawback to this is picking the wrong company leads to rapid depreciation.  

If learning with $100 sounds easy, other than getting fractional shares through We Bull for as little, retrieving the money can become tough. Who do you predict can outperform the market? 

Cryptocurrency: Roll the Dice 

Investing in cryptocurrency is still extremely high-risk (9/10), but for some, the reward outweighs the risk. Claiming to own 5,000 today, investing in Bitcoin in 2015 gave you a chance to turn $100 into $5,000, but if bought at the wrong time a drastic drop to $17 will occur. Although Bitcoin’s blockchain technology and limited supply appeal to some, its volatility is not ideal for the weak-spirited.

Invest on platforms like Coinbase to begin with a small investment at minimal risk. For students, cryptocurrencies are volatile yet captivating cases for studying market dynamics. Would you give crypto a gamble, or would you consider the stakes too high?

Key Takeaways

• High-Interest Savings Accounts: Build an emergency fund to stay secure without risk.
• Gold: Protect your money’s value against inflation with a safe, steady investment.
• Index Funds: Grow wealth steadily with diversified, low-risk stock market exposure.
• REITs: Earn passive income by investing in real estate without owning property.
• Buying and Selling: Use your expertise to flip items for quick profits.
• Individual Stocks: Take calculated risks for higher rewards with careful research.
• Cryptocurrency: Explore high-risk, high-reward opportunities with caution.

Conclusion

Investing $100 might seem like a small start, but it’s a powerful step toward financial freedom. Whether you choose the safety of a savings account, the steady growth of index funds, or the thrill of crypto, the key is to start where you feel comfortable and keep learning. Not every path will suit everyone—some of you might love the hands-on hustle of flipping items, while others prefer the set-it-and-forget-it vibe of REITs. The beauty of investing is that it’s flexible, and even small actions today can lead to big wins tomorrow. So, grab that $100, pick one idea from this article, and take your first step. Your future self will thank you for it. What’s the first investment you’re excited to try?