Smart Ways to Invest with just 200

Smart ways to invest with just $200

$200 is a great start to investing. If you take the $200 and invest it into an index fund and let it sit for 10 years at a rate of return 10%, compounded monthly and taxed at a marginal rate of 15% you will have $469 after paying $48 in taxes. However, let’s say you start with the same $200 and decide to skip the drive thru a couple times a week and start contributing another $100 a month for that same 10 year span. You will have contributed a total of $12,200 and earned $7,925 in interest. Uncle Sam would take his cut of $1,189 and you will have $18,936.

Ok so you are one of those people who think the market is going to fall and you would rather not take the chance with the stock market? There are plenty of online banks out there that pay 5% on their savings account. They are FDIC insured so you will be able to sleep peacefully at night. So you take your $200 and stick it into (Blank online bank who usually offers a free $25 for opening your account with them) and you leave it there for 10 years, not adding to it and not taking from it. You will have earned $125 in interest and paid Uncle Sam $19 so your $200 will now be $306. ($341 if you took the free $25 for signing up). Now let’s say you are still a little shady about that stock market but you still skip the drive thru and have an extra $100 lying around to save so you put that in (Blank online bank) every month. At the end of 10 years at a rate of return 5%, compounded monthly and taxed at your marginal rate of 15%, you will have earned $3,483 in interest and paid $522 in taxes, which leave you with $15,160. ($15,198 with the sign up bonus)

Personally I would take the $200 to Vegas and buy into a satellite for the World Series of Poker and try to parlay it into millions, but for those that aren’t as conservative as I am might want to stick to the advise above. How ever you do it, good luck!