After helping hundreds of new investors get started, I’ve found that $100 can be the perfect amount to begin building wealth through mutual funds. Here’s exactly how to make that Benjamin work harder for you.
Table of Contents
Best Mutual Funds You Can Start With $100
Top Low-Minimum Options
| Fund Name | Ticker | Minimum | Expense Ratio | 10-Yr Return |
|---|---|---|---|---|
| Fidelity ZERO Large Cap Index | FNILX | $0 | 0.00% | 12.1% |
| Schwab S&P 500 Index | SWPPX | $0 | 0.02% | 12.3% |
| Vanguard STAR Fund | VGSTX | $1,000 | 0.31% | 8.9% |
| T. Rowe Price Price Mid-Cap Growth | RPMGX | $100 | 0.70% | 14.2% |
Data as of June 2024
The Math Behind $100 Investments
Compound Growth Potential
FV = P \times (1 + \frac{r}{n})^{n \times t}Example: Investing $100 monthly at 7% return for 30 years:
FV = 100 \times \frac{(1 + 0.07/12)^{360} - 1}{0.07/12} \approx \$113,353Fee Impact on Small Investments
Cost = Investment \times (1 - (1 - fee)^t)A 1% fee on $100 over 30 years costs you:
100 \times (1 - (1 - 0.01)^{30}) = \$26Where to Buy $100 Mutual Funds
- Direct from Fund Companies
- Fidelity, Schwab, and Vanguard offer $0 minimums on select funds
- Automatic investment plans available
- Robo-Advisors
- Betterment: $10 minimum
- Wealthfront: $500 minimum
- Employer Retirement Plans
- Many 401(k)s allow $100+ investments regardless of fund minimums
Smart Strategies for Small Investments
1. Focus on Index Funds
- Lower minimums than active funds
- Example: SWPPX tracks S&P 500 for $1 minimum
2. Use Fractional Shares
- Some platforms allow partial shares
- Lets you diversify $100 across multiple funds
3. Set Up Automatic Investing
- Turn $100 into $25 weekly investments
- Dollar-cost averaging reduces volatility impact
What to Avoid With Small Investments
- Load Funds (Sales charges can eat 3-5% upfront)
- High Expense Ratios (>0.50% hurts compounding)
- Sector Funds (Too concentrated for small amounts)
Growth Projections
| Monthly Investment | 10 Years (7%) | 30 Years (7%) |
|---|---|---|
| $100 | $17,308 | $113,353 |
| $200 | $34,616 | $226,706 |
| $500 | $86,540 | $566,765 |
Assumes reinvested dividends
Next Steps for New Investors
- Open a brokerage account with no minimums
- Select one diversified index fund
- Set up automatic transfers
- Increase contributions with raises
Would you like me to suggest specific fund combinations based on your $100 investment and risk tolerance? I can help create a personalized starter portfolio.
