How to Invest £100 for the BIGGEST return!
If you’re looking for tips on building wealth and gaining financial freedom via investing – you’re in the right place.
Today’s blog is another essential one for investment beginners because it focuses on how to invest just 100 a month. 100 dollars, 100 pounds, 100 euros, the currency doesn’t matter…
This blog focuses on fresh ideas from a new perspective you won’t have heard before. It’s not just repeating what a hundred other blogs or YouTube videos have said to you before.
I want to inform you of easy steps that anyone can do to make their money grow from as little as £100 a month.
Firstly, let’s recap the basics of how to invest.
Let’s look at the basic, then come at this from a slightly different angle. What I ultimately want you to achieve is not only a better understanding of investments, but the mindset and headspace required to accelerate your investments and wealth. That will ultimately lead to you getting out of the rat race, retiring earlier and enjoying a more fulfilling lifestyle.
So, the basics! If you are looking to get your money to grow, it needs to be put to work in real assets that can produce growth. That would be things like stocks, bonds and property.
To put it bluntly, you will never become financially free by just saving into a bank account. As Robert Allen famously quoted, “How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case!” In the UK at the moment the bank of England base rate is 0.1%, the Fed funds rate is 0.25% and the ECB refinancing rate is 0%. Through this you can see why banks aren’t paying a return.
A little trick to working out how long it will take to make your money double is using the RULE OF 72. All you need to do is divide the number 72 by the rate you are receiving. That will tell you how many years it will take your money to double.
So, if you’re getting 0.50% on a regular savings account at the moment, which is about as good as you’ll get, it would take 144 years for £100 to double!
No one has 144 years, so If that is what you’re doing currently – YOU NEED A NEW STRATEGY!
So where should you invest the money?
The most simple and straightforward thing to do would be to set up an account with an investment company like Vanguard. (There are many other options, but the Vanguard process is very simple.) Here you can choose to invest into tax efficient wrappers like an ISA in the UK, or I believe a Roth IRA in the US. These will shelter the gains you make from tax.
When you’ve set up those wrappers, you can choose to invest into broad index funds or ETFs. These ETFs will allow you invest into the global stock market and spread your money across thousands of companies. This will make your investment is highly diversified. Spreading your investment reduces risk. This type of strategy has proved to be a good long-term way of achieving high growth.
If you achieved 8% a year return, (which historically has been about the average return of the US stock market allowing for inflation) your 100 pound or dollar investment would take 9 years to double.
Now for the not so obvious…
Let’s look at some ways of investing £100 for the BIGGEST and QUICKEST return. This is so you’ve actually got more than £100 to invest in the first place.
Some of this may sound counter-intuitive, but hear me out…
The most valuable commodity of all, is time. When we invest, we essentially do it to purchase more time to enjoy ourselves without the shackles of work and bills curtailing our enjoyment. Think how much time you have in the week and how you spend it. When you take away sleep and you take away work, you’re left with less than a third of your day.
There’s a very simple equation that I want you to keep in mind. This is the most powerful equation in the universe because it is the key to a happy life: Time + Money = Lifestyle. I’ve said before that having a good lifestyle is the reason we all work hard every day. However, without time AND money the equation is incomplete. If you’ve got lots of one and none of the other, you won’t have lifestyle.
How Do You Get More Time to Invest?
So, if 100 is all you’ve got to spare to invest at the moment, that might be better spent on trying to free up more time. This time can then be invested into gaining more money. Do you really want to be spending your free time every day doing cleaning, ironing, food shopping, gardening, cooking?
What you could do instead is use your budget to buy some of that help in. There are websites like Task Rabbit and Airtasker, where you can hire people to do practically any odd job that you need. £100 a month won’t cover everything, but you might be able to eliminate some of your least favourite tasks to free up more time.
Here’s the key thing though; you must INVEST THAT TIME into something useful! Learn a skill that you can do that can make you money. Don’t just waste the time having a nap or watching the TV (as tempting as it can be). In reality, if you want a good lifestyle, you have to hustle for it and move smart.
For example, you want to create a small drop shipping business or how to make money with affiliate marketing, blog writing or even a combination of all of those things. You can do short courses on all of them on sites like Skillshare (GET 30% OFF YOUR FIRST YEAR PREMIUM HERE) and Udemy. You can access tons of courses to really give you the expert knowledge that you need to get started in creating and marketing a little side hustle. This way you can complete a number of courses before you even have to pay anything.
To sum beginning your investment up…
That is how I would use the 100 dollars or pounds or euros first. Free up some valuable time by outsourcing some time-consuming tasks. I’d then invest that free time and any money left over into teaching myself new skills. I’d then use those skills to multiply the money available to invest. I’d invest that money initially into tax efficient, stock market instruments to accelerate the building of wealth. When I became more adept at that I’d look to other investment opportunities to accelerate my wealth even faster, but that’s for another blog… make sure you stick around so you don’t miss it!
Here’s a Thought…
Sometimes the best, most savvy ideas are the simplest one. A little online buying and selling business can be profitable. For example, one of the best videos I’ve seen on this recently is Ryan Pineda’s couch flipping video…
What he basically did is find an item, in this case leather couches, that people were trying to get rid of. In their haste to get rid of them so they could get their shiny new sofa, they under-priced them. Ryan then bought them, tidied them up if necessary, and sold them for a higher price.
He turned that simple idea into a business that generated income of over $100,000 a year. There’s nothing stopping you from doing the same thing.
On sites like Gumtree and Facebook Market Place, people are literally giving things away for free. This is quite often just because they want to get them out of the way, not because there’s anything wrong with them.
You could definitely convert those free items into cash. It just takes a bit of time, planning and perhaps a touch of marketing prowess. These are all things that can be bought or learned.
So, it may not be what you expected and it may take some hard work, but all the best things in life do! It is all about being creative and finding innovative ways to free up that time so you can earn more money and invest for the lifestyle you desire.
Let me know if this has helped you and if you have any ideas/stories of creative ways you have earned some extra pounds! You never know who you could inspire.