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Investing for Beginners: Started with $100 and Got Confused (What Worked)

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Disclaimer: This article is for educational purposes only and does not constitute financial advice. Investing involves risk, including the potential loss of principal.

I used to think that to invest you would have to be rich. Eventually I discovered you could invest with like $100. Okay, maybe I could give it a shot, right? But I definitely was not prepared for how confusing it was going to be.

Things Didn’t Go Well At First

It was March 2023. I had $127 in my checking account. I thought it was time to try my hand at investing. Then I opened one of the hottest investment apps and was immediately confronted with terms like “expense ratio” and “dividend yield.” A series of numbers and terms I’d never seen before stunned me immediately, didn’t even know what an ETF was!

I closed the app and didn’t even look at it again for two months. I was not joking!

The $127 was not the problem. I felt stupid. There was so much jargon and lingo; a lot of articles just assumed you would know what a PE ratio was. I still don’t really know what it means.

The Next Step After Two Fails

I made my second attempt in May 2023. This time I had $150. I really told myself that I was going to figure it out this time. This time I went a different route – I asked my coworker Dave, who I knew invested. He told me something that changed everything for me:

“Just buy a target-date fund and stop overthinking it.”

I was like… that’s it? He said, Sure, pick the year you want to retire (I said 2060 because I’m 28), find a fund with that year in the name, and put money in it. The fund does everything else.

This was too simple, but I was desperate, so I gave it a shot.

money growth concept with plant
Growing wealth through long term investing

What I did was:

  • I opened a Roth IRA with Vanguard (took SSN and bank info, so 20 minutes).
  • I put $100 into a 2060 target-date fund.
  • I kept $50 as backup because I was scared.

The fund was literally called “Target Retirement 2060” or something. It cost me like $0.04 in fees for the whole year. I didn’t have to pick stocks or bonds or know what bonds were. It just worked.

My Mistakes (Even Though My Approach Was Simple)

Sure, I messed up. Let me list what went wrong in months 3-5:

Mistake 1: I checked it every day

No matter how I reframe it, it was dumb. Seeing your $100 become $97, $103 and $99 is just super stressful and pointless. I checked during lunch, before I went to bed, and at random times during the day. Made myself anxious for no reason.

I removed the stock app from my phone’s home screen and uninstalled it to avoid checking it as often. While I’ll check it less frequently, I can still view my portfolio and search for stocks on the website. I’ll probably check it once a month, if I have time.

Mistake 2: After one “success”, I got fancy

My account in the fourth month was $187 (I was adding money every month). I thought to myself, ‘I can do this.’ Then decided to buy some individual stocks.

I bought shares of a tech company stock because their chart was looking good (what a joke). Lost $23 in 3 weeks and then went back to my boring target-date fund.

Lesson: Stick with what you know when you don’t know much.

Mistake 3: I stopped when I had a bad month

I stopped adding money for 6 weeks, and my account went from $220 to $198 because of the market drop. The market went down in September 2023.

Ignorance is bliss. Prices were lower during that time, so it was actually smart to buy. But I guess I was just feeling it. I started adding more to my accounts in November after I came to terms with the fact that these account balances were just drops.

What’s Actually Working Now (8 Months In)

Current status: I have $891 in my Roth IRA. Not the most impressive, but it’s my money, and it’s my money.

Here’s my current strategy (it’s really simple):

  1. $75 goes into my Roth IRA each month (it’s automated so I don’t have to think about it)
  2. All of it goes to the same target date fund (2060)
  3. I literally check it once a month just so I can see the balance.
  4. And that’s literally it.

If I have the money, I sometimes do an extra contribution. I added an extra $40 last month from a freelance job. But I do my $75 baseline, not period.

So far I have about an 8.7% return. Over the past 8 months, I’ve made about $67 in investment gains not counting the amount of money I actually put in.

Is that good? I don’t really know, but it’s definitely better than the $0.02 I was making in my savings account.

investment app on smartphone
Using an investment app to start investing

Things I wish I would’ve learned from the jump

When starting out, you don’t need thousands of dollars to begin. Even $50 or $100 is fine. I thought I needed at least a grand to even consider starting; I didn’t.

When learning, boring is better. While it’s true some 401(k)s and target date funds can be boring, they work. Too many people feel as if they need to choose the next big company, and that’s simply not true.

You’re going to lose money some months, and that’s completely normal. The market goes down, and just like that, they can. Monthly drops don’t really matter when you’re investing for 30 years or so into retirement.

Money is lost through your fund fees. One of my funds is 0.08 per cent a year, and some funds can be 1-2 per cent. The difference, Dad, is huge. Check the expense ratio because the lower the better.

If you don’t set it up, you’re going to forget to do it. I have so many transfers set up so that I don’t have to do it manually because if I had to do it manually, I would forget and not do it.

Investing becomes more accessible when your credit score and financial foundation are already stable.

Honesty is the best option when starting out.

I know it’s intimidating, and I know that for some people, it’s understandable that for some it’s the first time they have to do it; it’s the first time they have to do it. On the flip side, if you just want to have wealth for retirement and you don’t want to lose control of your life, it’s easier than people would lead you to believe.

There is a lot of talk about the stock market, from news stations like CNBC to the highbrow vocabulary like ‘quantitative easing’, which, frankly, no one needs to understand to become a successful investor.

To get started, you need to do the following:

  1. Choose a broking like Vanguard, Fidelity, or Schwab, and open a Roth IRA.
  2. Select a target-date retirement fund. This will require you to do a little bit of planning to figure out when you will retire.
  3. Make contributions on a regular basis (this is a boring but essential step).
  4. Don’t touch it.

You’ll be pleased to know that you won’t be the only one making mistakes on the journey to becoming a successful investor. Your Warren Buffett account in 8 months will be less than $891, which is great news, because you’ll be more successful than half the people out there and likely more than 90% of the US.

Successful investing is more about doing boring and small things and less about making big transactions or exciting trades, and less about checking your account more than 90% of the people out there.

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