Investing is for everyone whether they are on low or high incomes. However there are a few things to remember before investing. Firstly you should never invest more money that you can afford to lose and secondly you should pay off debts before investing any money. The biggest decisions to make when investing are how much money are you going to invest and how much risk are you willing to take. The answers to both these questions will determine how you invest your money. Those on a low income can invest $100 and grow it into much more money over a period of time. Obviously the $100 has the potential to grow quicker with a more risky investment, but its value may also be reduced with such an investment, whereas it will take much longer to grow with a low risk investment but the chances of its value being reduced are much less.
Low risk investments
If you have money you cannot afford to lose and you do not want to take any risks then I would suggest a high interest tax free savings account or CD if you reside in the US. Currently in the UK Halifax are offering a tax free cash ISA with an interest rate of 2.6%. If you were to invest $100 each month for a year you would end up with around $1216 at the end of the year. This amount of money would be guaranteed provided you contributed a $100 each month and the interest rate did not change.
High risk investments
There are many examples of high risk investments which have the potential to generate a large return on your money, but this return is not guaranteed and your investment may be worth less than what you contributed. An example of a higher risk investment is dividend reinvestment plans (DRPs), which allow you to invest very small amounts of money to buy stocks from over 1000 major corporations. The fees for this activity are nonexistent or very low making it a good way to invest $100 or less each month. Another way to buy stocks or shares in a company is through Sharebuilder where you pay a small monthly fee in order to purchase from as many as 4000 different corporations.
It is very possible to invest $100 or even less each month. The choice of investment will depend on whether you can afford to lose the money you invest and take risks or whether you prefer to go for a safer investment and a guaranteed return.