Introduction
Investing with just $100 may seem small, but it’s enough to start a portfolio focused on monthly income. In this article, you’ll discover how young investors can create and grow an investment portfolio in the U.S. with $100, leveraging accessible tools and smart opportunities from the very first investment.
Why Build a Portfolio with Just $100 in the U.S.?
- The American market accepts low amounts and allows fractional purchases of assets.
- It serves as a starting point for young people to acquire financial discipline early on.
- It opens doors to passive income through dividends, even with little capital.
Opening an Account and Investing with Little
- Affordable Brokerage Firms: Platforms like Robinhood, Webull, M1 Finance, Fidelity, and Charles Schwab allow account openings with low minimums and no SSN.
- Fractional Shares: You can buy parts of stocks/ETFs, even if the whole asset costs a lot.
- Almost Zero Costs: Many brokerages charge no commission fees, reducing the impact of costs on small investments.
Key Concepts for Young Investors
- Diversification: Combining various assets to reduce risks.
- Monthly Dividends: A constant cash flow from assets that pay frequently.
- Reinvestment: Reinvesting earnings exponentially increases growth through compound interest.
Assets That Pay Monthly Income with Little Money
- REITs (Real Estate Investment Trusts):
- Companies like Realty Income (O) and STAG allow participation even with $100 via fractional shares.
- Provide real estate income without needing to buy properties.
- ETFs That Pay Monthly:
- Vanguard VYM and Schwab U.S. Dividend Equity ETF (SCHD) distribute quarterly dividends, but there are ETFs with monthly payments.
- Individual Stocks with Monthly Dividends:
- Less common, but there are stocks that pay consistent monthly dividends.
- Accessible Fixed Income:
- U.S. Treasury securities are accessible through brokerages, offering security and monthly or semiannual income.
What Are Monthly Contributions and How to Use Them
- A monthly contribution is the amount you invest each month in your portfolio, regardless of the amount.
- With $20, $50, or more, you can maintain consistency and progressively increase your capital.
- Ideally, this contribution should be a part of your financial planning.
How to Reinvest Generated Income
- Monthly dividends received can be reinvested in new assets.
- Use features like automatic dividend reinvestment offered by some brokerages.
- Reinvestment accelerates wealth growth through the snowball effect.
Practical Example of Allocation with $100
| Asset | Value (%) | Destination (US$) |
|---|---|---|
| REIT (fractional share) | 50% | $50 |
| Dividend ETF | 30% | $30 |
| U.S. Treasury Bond | 20% | $20 |
This is an effective and practical suggestion to start an investment portfolio.
In God We Trust
