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Got $100? Start Investing With It

For the majority of workingwomen in the U.S., the mere thought of being able to invest is just a far-off dream; way out in the distance, as living paycheck to paycheck is a way of life. But I’m here to tell you that with as little as $100, you can start investing for your future and learn a bit of info along the way!

The Statistics

Unfortunately, as far as first-time investors go, most of us jump right out of the gate and run headlong into a brick wall.  From 1984 to 2002, the individual investor in equity mutual funds saw an average return of 2.6% each year, all while the S&P Index (Standard & Poors) gained an annual return of 12.2%.  Quite a bit of difference, don’t you think?

Oh Where, Oh Where does my Money Go?

We’ve all heard about the extremely overpaid CEO’s of the corporate world (plus their annual bonuses that equal more than the average American could make in ten lifetimes), or that there is a “right and wrong time” to invest in the market- this couldn’t be farther from the truth, unless of course you have a fully functioning crystal ball in your living room.

Another reason for poor performance is the failure of one to diversify their investments. You can’t put all of your eggs into one proverbial basket and expect to come out on top, for if you drop your basket, even accidentally, there’s a pretty good shot that all of your eggs will smash all over the floor. Of course, if you only have $100 to invest, you will want to spend the least amount in fees as possible, so keeping your money together is a good idea.

But what about the $100…

You don’t want most of your money to go towards trader fees, and you don’t want to find a financial advisor that works on commission, as they might just sell you $95worth of the funds that they make the highest commission on. Think about this: If this advisor was really that good, why is he or she still working?

One of the best ways to see your $100 to grow steadily is through index funds.  The fees are one-fourth to one-tenth lower than actively managed funds.  Stick to the low-overhead companies like Fidelity. When your investment begins to grow and you create your portfolio, it’ll be time to diversify.

Too Risky for You?

Of course, there is the possibility that you could lose money with stocks, bonds, mutual and index funds, etc.  If you’re nervous of such incidents eating up your profits, you might want to consider searching the World Wide Web for the best CD (Certificate of Deposit) rates. Interest rates are on the rise, and that means better rates on your guaranteed return than in the previous years.  Plus, FDIC or NCUA, depending on where you get yours, insures CD’s for a worry-free investment of up to $100,000.

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