Looking for extra money to stop onebrokerage accountand investing can be quite challenging, especially if you have an urgent expense to make today.
It can seem very intimidating to transfer a bunch of money from your accountcheckaccountto a brokerage firm to buy shares. But what if you don't have to invest a fortune? If you invest just $100 a month, will that contribution really make a big difference in your wealth in the end?
How $100 a Month Can Make You Rich
By investing just $100 per month, you can make a lot of money over time. In fact, the table below shows how much your $100 monthly investment could earn over time, assuming you earn an average annual return of 10%.
| If you invest €100 per month for so many years... | ...that's how much you end up with. |
|---|---|
| 5 | $ 8.058,73 |
| 10 | $ 21.037,40 |
| 15 | $ 41.939,68 |
| 20 | $ 75.603,00 |
| 25 | $ 129.818,12 |
| 30 | $ 217.132,11 |
Data source: author's calculations
That's a significant amount, especially considering the median401(k)the balance for people 65 or older is only $87,725. You could end up with more than double what the average American has saved for retirement just from your $100 per month investment.
How investing $100 a month will help your wealth grow
A monthly investment of $100 doesn't seem like much, but when you put that money into the market, it pays off. If you earn 10% in a year, your original $100 investment is worth $110.00. Next year you will earn 10%, not on €100, but on €110, so that you end up with €121.00. This happens with every investment you make and with every year that passes, and it has a snowball effect.
The more you can invest and the more time you havecompound growthwork, the stronger the effect. But even if youdoesn'tIf you currently have more than $100 per month to spend, you're better off putting that money in the stock market and letting it work for you so your snowball can start forming.
If you're not sure where you can make an extra $100 a month, these are some possible options for you:
- Work a few hours of overtime or extra work. If you can earn $15 per hour, you only need to work about seven hours throughout the month to earn an additional $100 to invest. Many people can find seven o'clock.
- Check your budget carefully. You can probably find one or more expenses to save that amount to $100. If you switch to a cheaper mobile plan, cancel a streaming service you don't use much, and give up a dinner out, you'll probably get there.
If you can increase the amount you invest over time, that would be ideal because you can build even more wealth. But you don't have to worry about that if you're just starting out. Just start with the first $100. As you watch your money grow, you can get excited about investing and find new ways to grow your contributions—and with it, the power of compound growth in your wealth building.
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