Hi, it’s EyenaN. So, have you ever had $100 in your pocket and wondered how you could turn it into 1,000, 10,000, or even $100,000? Well, sadly, this isn’t something they teach in school. Come to think of it, it’d have been pretty awesome if they had. Because of this lack of knowledge, it seems pretty scary for most beginners to get started in investing. But in today’s Article, I’m gonna simplify the whole process. Make money online
Investing my money allowed me to become a multimillionaire, and guess what I started with? That’s right, $100. Well, probably less than that, to be honest. I’m not saying becoming rich is easy, but by taking calculated risks, you’ll be able to grow your wealth over time. I understand that everyone has a different risk tolerance, so today I’m gonna be revealing how to invest for beginners with $100. And as we go through the Article.
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Risk Level
The risk is going to increase, but remember, as the risk goes up, so does the potential reward. I’ll also be putting my money where my mouth is and investing $100 into each one of these options so you can see exactly how to do it. I’m just about to invest in something I never thought I’d actually do. Here goes. When someone asks me how they should invest $100, I usually say, invest in yourself. You can do this by buying books and improving your skills, but assuming you’ve already done this, now we’re gonna be talking about the specific places you can actually put your money.
Now, I’m a businessman. I’m not a financial advisor. These are just some of the ways I’ve invested my money over the years, and they’ve worked for me. You can also sit back and relax, because I’m not gonna try and sell you anything at the end. Just remember, if you enjoy the Article, then smash that like button, because it really helps push this Article out to more people, and also consider subscribing if you want to grow your wealth.
HIGH INTEREST SAVINGS ACCOUNT
The first investment is a high interest savings account. This is a one out of 10 on the risk scale, so the lowest possible risk that you can have. Nowadays, it’s extremely hard to find any savings account that will pay a substantial amount of interest, but that’s not the main reason it’s on the list. By putting your money into a savings account, you’re actually starting to create what I like to call an emergency fund, which I believe everyone should have. This is money that you can access if something unexpected comes up, and it’s extremely low risk.
And by having money on hand, you can avoid getting into debt and having to pay crazy fees back. I remember when I bought my first apartment, I had a minor crisis after about two months, as the hot water system went wrong and it needed replacing. Because of my emergency fund, it saved me over $200, as I didn’t have to take out a payday loan. When you leave your money in the bank, it slowly loses its value, so when I am looking for the best savings account to combat this, I look for two things.
SAVING ACCOUNT REQUIREMENTS 1. A high interest rate
The first, of course, is a good interest rate, which depends on the economy, mostly. The second thing is having the ability to access my money instantly. Some banks that are really worth looking at and consistently have a good rate of interest are Ally Bank, Marcus by Goldman Sachs, and Citibank. I currently have an account with Marcus by Goldman Sachs, and their interest rate is 0.7%, which isn’t very high, but is currently one of the best available. So, there we go, nice and easy, $100 deposited into my savings account. Now for gold, often referred to as a safe haven.
I’ll give this also a two out of 10 on the risk scale. Did you know that, since the creation of the Federal Reserve in 1913, the U.S. dollar has lost 95% of its value? So, you’re actually only left with 5% of its original purchasing power. So, if you want to stop your money losing value, then maybe gold is for you. If you had a hundred dollar nugget of gold in the year 2000, it would now be worth approximately $580. The piece of gold hasn’t actually changed in size.
It’s still the same piece of metal, but what has actually changed is the value of your dollar to how much gold you can buy with it. Gold was actually our original currency used by our forefathers. I remember those days well. It’s perfect, as it can’t be manufactured and it lasts for thousands and thousands of years. So, if you’ve ever watched “Gold Rush” on TV, you’ll know how hard it is to actually mine this stuff out of the ground. Now, you may be wondering, if it’s so safe, why have I given it a two out of 10 on the risk scale?
OPPORTUNITY COST
It all comes down to opportunity cost. You have to ask yourself if you really want to just protect your hundred dollars against inflation or if you want to invest it in other opportunities which could make it grow a lot quicker. If you invest in gold, then you will be missing out on these potential profits, making it a little bit risky. I would say that this is the perfect investment if you have a lot of money already, and all you want to do is just protect it.
There are two different ways that you can invest in gold. The first way would be to actually buy physical gold, but if I bought jewelry, I don’t know, gold bars, coins, and that sort of thing, I’d probably be paying too much, because the person selling it would want to make a profit, which means I would be paying more than the true value of the gold itself. The alternative is to invest in gold within a broker app, like Robinhood in the USA, or Trading 212 in the U.K.
Then you’re able to buy gold at its true value and have the option to sell much quicker. In the USA, I would look for the GLD ETF on Robinhood, which is one of the largest gold ETFs in the world. As of June 2020, they hold over 36.49 million ounces of gold in vaults all around the world. As I’m currently in the U.K., I’m gonna invest using Trading 212 in a similar share. And with just a click of a button, there you go. I’m now Mr. Gold Man. If that doesn’t sound exciting enough for you,
INDEX FUNDS
Then why don’t you try a simple low cost index fund? I’ll give this a three out of 10 on the risk scale. If you invested just $100 per month into an index fund with a 7% annual return, then after 30 years, you’d have $123,000. That’s the power of compound interest. You can do all of this without having any knowledge of the stock market. I remember when Warren Buffett, one of the richest men in the world, placed a million dollar bet that a simple S&P 500 index fund would outperform a professionally picked portfolio of hedge funds over a 10-year period.
Now, this contest wrapped up in 2017, and the results were made public. Warren Buffett had actually won a million dollar bet, which really shows the power of index funds and that the everyday person can take on the pros with little to no knowledge. Imagine an index fund is like a bag of Haribo gummies. The machine in the factory puts a range of the most popular candy into one bag so you can enjoy the best of the best without having to pick and buy each and every one individually. Now, just replace the candy with companies. That’s what an index fund is.
You can buy your own selection bag of the most popular companies in the world, such as Apple, Microsoft, Amazon, and Facebook, and your money is split between all of them. Now, let’s go back to the Haribos. Imagine you left these on the side and they’re open for a few days or so. They’d go hard and they certainly wouldn’t taste as good, would they? But by putting them in a container, you can stop that from happening. This is very much like index funds, as if you leave them unprotected, the government will start taxing you on the profits you make, but you can protect them with a sort of container like this, which is known as different things in different countries.
IN THE USA ROTH IRA
In America, it’s called a Roth IRA, and in the U.K., it’s an ISA. These containers allow you to protect your money after tax, and then any profits you make are yours to keep, but because they’re so good and they’re so powerful, there’s a cap on how much you’re allowed to invest each year. So, if I was you, I would take full advantage as soon as possible and max out your allowance. There are more in depth strategies you can use, but for the purpose of this Article, I’m gonna be investing $100 into an S&P 500 index fund, which, over the last 20 years, has an average yearly return of 7%. Drop a like if you’d like a full Article covering this topic, ’cause there’s so much on this we could talk about.
But Mark, $100 isn’t enough, as the S&P 500 is over $3,000 a share. Well, you don’t actually have to buy a full share to invest. My favorite brokers are Fidelity, Charles Schwab, and Vanguard. So, if we head over to Vanguard’s website now, and we find the S&P 500, here you can see what companies are in the index fund so you can buy the right one. So, all you have to do is create an account. I already have one, and deposit some money, and then click, there you go. Job done. The fourth way to invest is in a real estate investment trust, otherwise known as a REIT. I’ll also give this a three out of 10 on the risk scale. Now, imagine your friend collected $100 from 3000 people.
He will have $300,000. Then he takes this money and he buys a property. He rents it out and splits it with all 3000 people that helped him buy the property, which helps them start generating some of that sweet passive income. That’s the basic way of explaining a REIT. It lets everyone benefit from investing in income-producing properties without actually buying one. Think of it like buying a small share in a property. Let’s say you own the front door, someone else owns the windows, and a few other people own all the bricks, but all together, you own the property.
Equity REITs own things like offices, shopping centers, apartments, hotels, and much more, and they get their income through the rent. By law, they have to pass on 90% of all profits to the investor, like a dividend. However, they’re taxed a little differently. The cool thing is that, at the start of 2019, the 10-year average return for REIT ETFs did better than the S&P 500, with an average return of 10%. If you’re in the USA, by investing in the VGSLX by Vanguard, you can average a 12% return, which beats the average real estate investor. How awesome is that? As I’m in the U.K., I’m gonna use the Trading 212 website to put $100 into a similar REIT. It has high global diversification, meaning I can invest in all the up and coming property markets around the world.
BUSINESS (BUYING/SELLING)
The next option is buying and selling items. The risk on this really depends on how good you are at finding great deals, but I’ll give this a, I don’t know, four out of 10 on the risk scale. The good thing about doing this is that you can buy and sell something that you’re interested in and have knowledge about, which can lead to bigger possible returns. Now, I’m going to invest my $100 in either pre-owned radio control model gear or golf equipment. Both of these I’ve got an interest in, so I should have a reasonable idea of what each item is worth.
Pokemon cards would be a great area to have some expertise in, as their value at the moment is skyrocketing. Logan Paul just bought a Charizard card for over $150,000. How mad is that? So, I’ve been on Facebook marketplace, as most people have access to that platform, and I found myself a model engine that I’m gonna go and try and buy. It’s up for 75 pound, which is approximately 100 U.S. dollars. We’ve sent a few messages back and forth and I’m gonna go and have a look at the item now. (gentle music) Hello there, I’ve come about the engine. – Oh, yeah, here you go. – Oh, in the box as well! Cool, that’s good. – Yeah, it’s all boxed. – Cool, that’s right.
So, would you take 70 for it? – Nah, I’ve got 75. In its box, in good condition. – Can you do a bit better? – I’ll tell you what I can do. There you go, I’ll throw that in. – Really? – That’s what it came out of. 75 quid. – That’s a deal. – Okay, a deal then. – Here you go. I’ll give you 75 quid. – Lovely, thank you very much. – We’re Articleing this for our Website. Do you mind? – Oh, no, that’s fine. – All right then, see you again. Thanks a lot. Thanks for that. So, I’ve done a listing on eBay for the model engine, and the model plane, I’m gonna actually advertise on a specialized website for model flying, as I’m sure I’ll be then selling to the right people and hoping for big profits. Now we’re starting to get serious.
INDIVIDUAL STOCKS
It’s time for individual stocks. This gets a 6.5 out of 10 on the risk scale. There’s a certain amount of risk that comes with investing individual stocks, but if you pick your companies well, then it can be really exciting, as there’s the potential to make a lot of money. During the dot.com boom back in 1995, I was really lucky to pick a few great stocks, which I cashed in and I made a lot of money in a very short period of time. When the bubble burst, some of the companies I’d held on to, which had cost me very little, went completely out of business. Luck and timing can be a very crucial part of stock investing. I’ve picked these stocks using.
FUNDAMENTAL ANALYSIS
what’s called fundamental analysis, which means I looked at the business financial statements, their market, and also the leadership of their companies. Back then, this was a lot of work, but now it’s easily found out on Yahoo! Finance. A while ago, I read an article about an experiment where they simulated 100 monkeys throwing darts like this at the financial page of a newspaper. The stocks the monkeys picked on average outperformed the so-called smartest hedge fund managers on Wall Street. So, for this Article, I thought it’d be fun to put this theory to the test.
I don’t have a monkey, so I thought I have to do. So, I’m gonna throw a dart at the board, and as you can see, I randomly selected 20 different stocks, and wherever the dart lands, that’s what I’m going to invest in. Now, I’ve just got to put on a blindfold. Okay, here we go. – Oh, you hit it. – Right, let’s see what we got. And we’ve gone into Samsung. Right, so I’m gonna jump straight onto my brokerage account and set an order for Samsung. If you want to invest your $100 in individual stock, then Webull are currently giving away three free stocks for a limited time when you deposit $100 into your account. I’ll just leave the link in the description if you want to pick up those free stocks.
So, now we’re gonna be moving into the realm of gambling and speculation rather than investing. Number seven is cryptocurrency. This is a nine out of 10 on the risk scale. So, you’ve probably heard of Bitcoin. This is currently the most popular type of crypto. If you’d have bought $100 worth of Bitcoin in 2015, today it would have been worth around about $5,000. That’s a 5000% return on your investment, and that’s pretty unheard of.
Therefore, many people that invested in Bitcoin in the early days became millionaires overnight, but a lot of people also lost money. If you’d invested around $100 in December 2017, when Bitcoin was at an all-time high, by December 2018, you’d have had less than $17 left. So, really, no one really knows what it’s gonna do next. It’s extremely risky, but still very attractive, because it has the potential to make you millions.
TYPES OF CRYPTO 1. Ethereum
There are three main types of cryptos. These are Ethereum, Ripple, and obviously, the big one, Bitcoin, but let’s just focus on Bitcoin today. If you want to learn more about other types of coins, you can read something called a white paper, and it will give you all the details. The cool thing about Bitcoin is that it uses something called blockchain, and it isn’t regulated by the government. You also can’t create any more Bitcoins, which makes inflation absolutely impossible.
In my opinion, this investment will probably only make sense if you’re investing an extra $100 that you don’t really need, so I’m gonna jump onto the most popular Bitcoin app, which is called Coinbase and invest my $100 in Bitcoin and forget about it. By the way, if you wanted to give this a try, I’ll put a link to Coinbase in the description down below and you can pick up $10 of free Bitcoin. At least that gives you a bit of a headstart. The last is definitely a full on gamble.
THE LOTTO
You may have guessed it already, it’s the lotto. This is definitely a 10 out of 10 on the risk scale and isn’t something I would recommend doing. However, I thought I’d include it in this investing Article, as so many people choose to do it. In fact, 57% of all Americans buy at least one lotto ticket per year. The chance of actually winning is one in 14 million, which might sound quite possible, but let me just try and put that into a bit of perspective. You’re 4,000 times more likely to win an Oscar than win the lotto. Millions of people lose their money every year, but they keep playing, as the rewards are sky high if you win. I’m just about to invest in something I never thought I’d actually do. Here goes. Can I have a hundred scratch cards, please? Lovely, thank you very much.
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Thank you, help. Cheers, now. Thanks, bye. As you can see, this is gonna take me quite a while. I’m gonna leave a counter on the screen so you can see how much I’ve spent versus how much I’ve heard back from my investment. Let’s do this. (playful music) I hope there’s a bit more in this lot. There’s gotta be, hasn’t there? So, we’re halfway through. The most we’ve earned so far is $3 on one ticket. I’m gonna need some help. I’ve got 50 more to go. Come on, Curtis. I know you’ve been itching to have a go at this. Have you got your coin ready? – I do, ready. – Let’s race to see, wait for it, who can find the most money in the remaining 50 cards? Ready? – Okay. – On your marks. Get set. Go! (upbeat music) ♪ Y’all ready to go ♪ ♪ Come on ♪ ♪ Let’s do it ♪ – $15. – Really? – Yeah. – No. – Yeah. – Oh, wow, $15. – $15. – He’s only just started doing this.
He’s got more than me. – I’ve beaten you already. (upbeat music) Find a 2x to win two times. – There must be. $10, we think. – Is that $10? – $10. I think so. – $10. – What have you got? – You say you’re smashing me, but I’ll tell you what, how about this? How about this, another dollar. (upbeat music) ♪ Y’all ready now, I’m making my move ♪ ♪ Better stand back, ’cause I’m coming though ♪ – I’ll tell you what, this has got to be an astonishing last four cards if we’re gonna get any money back from this. So, we just came back and we double checked it. We made back $50 from our $100 investment. Now, you may think that sounds pretty good, but that’s actually a negative 50% return.
This was meant to be a little bit of fun, but it’s pretty sad to think that people play this regularly and on average are losing half their money when they could pick any one of the other investments in this Article and have a much better chance of being successful. I hope this has taken some of the mystery away from the other forms of investing and made them a little bit more understandable for beginners. If you’d like me to make a part two of this Article to see how these investments have done over a month, then make sure to smash that thumbs up button to let me know. I’m gonna leave the next Article here, but don’t click on it just yet. Remember to subscribe to the website. Okay, I’ll see you on the other side.
I hope you read this article completely. Similarly I have written a separate article on how to earn money online. Don’t forget to read that article too, the first three paragraphs are below. Don’t forget to read that article on how to make money online and ask me any doubts you have in the comment section below that article. I will clearly tell you how to make money online. You too can use these ideas of mine to make money online.
If you read this article of mine and know how to make money online and follow it, I will have no greater happiness than that. So prove that you too can make money online. I hope this article will be useful for you. I will meet you with some other different topics about how to make money online in the next post, until then I bid you farewell. Thanks Dudes.
