I’ve got some creative ways to fix your budget.

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Hi Penny Hoarders

I truly love getting your emails! I try to answer as many as possible, but with more than 100 reader emails a day (not to mention comments, FB discussion, and tweets) it can be a bit overwhelming at times!

This week I received this email from Christopher

Hey, I was wondering if you could give me some advice on making money on the stock market with only investing a 100-200$??

You gotta start somewhere, right?

Let me just first say that I admire Christopher for wanting to invest even though he has such a small amount of money to get started. Sure, youre not going to make a ton of interest off of a $100 investment, but the important thing is to just get started.

Ive told the story about how I escaped the paycheck to paycheck lifestyle and saving the first $100 really is the hardest part.

Not only will you start earning some interest, but more importantly, it can help you get in the habit of saving each month.

And if you needed any other motivation, consider this If you had invested $100 in Coca-Cola back when it first when public in 1908, it would be worth an astonishing $24.5 million dollars today. So, yes, Christopher! I whole-heartedly think you should start investing with just $100.

Where should I invest?

This is where it gets a little tricker. Im not going to offer any stock advice, but I can tell you that one of the biggest problems with investing such a small amount of money is that brokerage fees can be exorbitant. Consider that buying and selling one single stock can cost as much $20 at a place like E-trade!

All of the sudden your $100 investment is only worth $80 before you even get started.

So, my suggestion is that you look for a free brokerage account at place like Loyal3. There are a few others, but that one just happens to be my favorite because they dont charge you anything to buy or sell stocks, nor do they have any type of minimum balance requirement.

They also allow you to invest in IPOs (new companies that are just hitting the stock market), which is kind of unusual, but definitely very cool!

Dont feel comfortable investing in stocks?

If you arent interested in investing in the stock market, I have a couple of other suggestions. First, have you thought about just opening an online CD? It can be really helpful to put money in an account thats not connected to your checking account and not as easily accessible. I find that Im less likely to withdraw the money.

There are several banks that offer them, but my favorite is BAC Florida because they offer a 2.23% interest rate  (not a ton, but its certainly more than anyone else is offering right now).

Other options

Finally, my last piece of advice is to check out a place like LendingClub.com. LendingClub is a person-to-person lending network that is regulated and protected and its another free way to invest.

It works by people like you and me investing, through the network, to fund loan requests from others you elect to help. Basically what happens is the banks are cut out of the loop, lowering the rates for borrowers and increasing returns for investors. The only people that lose in this scenario are the banks.

Ive been investing in LendingClub for awhile now and constantly see returns between 14-15%. Again, thats not going to earn you a ton of money on a $100 investment, but it will certainly get your started.

I hope that helps! Please let me know if you have any questions in the comments below

Good luck Penny Hoarders!