This article is part of a series dedicated to discussing the best methods for investing varying amounts of money.  Previously, I have discussed how to invest $1000 in stocks or business. The amount of capital available for investment drastically influences which investment medium makes most sense.

In this particular guide, we are going to to discuss how to meaningfully invest $100. I will first reveal how to invest in the stock market with 100 dollars and then reveal what I believe is actually the best method for investing this small sum.

Investing in the Stock Market (Or Other Methods which Generate Interest)

While you could invest $100 in the stock market, I would not recommend it. The main reason is that $100 is just not enough money to generate any meaningful return. Even if you were a spectacular investor and generated 15% returns each year and had invested the money in a tax-free Roth IRA, you would only be sitting around $1400 on your initial $100 investment after 20 years. While going from $100 to $1,400 over 20 years would be quite a feat, $1,400 is not exactly a large sum of money (at least if you waited 20 years for it).

Another problem with investing in individual stocks is that trading commissions will eat most of your initial fees. If you bought $100 worth of stock (which would be difficult since many stocks are over $100 a share), you would end up spending $10 of that on the commission for the purchase, leaving you with only $90. Even with a great return, it would take you a full year just to get that commission back on a small $100 investment.

If you want to invest that 100 dollars into the stock market anyway, your best bet would be to use a mutual fund that does not charge a fee for buying in. Many discount brokerages like eTrade have investment funds that you can deposit money into for free from your bank account. This way, you can keep all $100 of your investment without having to pay a $10 commission on the purchase.

One alternative method to invest in the stock market with a small sum without getting destroyed by trading fees is a new service known as Loyal3. This service allows you to purchase fractional shares of a few dozen popular companies by pooling money together with other investors.

As an example, consider that shares of Apple (AAPL) are over $500 a share. If you only have $100 to invest, you cannot purchase a share yourself. With Loyal3, Loyal3 actually buys the shares, and then divvies them up amongst its members based on purchase price. If you purchased AAPL at $550 a share through Loyal3 using just $100, you would own .18 shares of AAPL whereas other investors would own the remaining .72 shares. The best part about this is that Loyal3 does not charge a trading fee. They are able to do this as a few companies on their service sponsor this activity in order to make investing in their companies more accessible.

The only downside to Loyal3 is that stocks are generally bought and sold at the end of the day in one transaction. You will typically end up paying a little more to buy and getting a little less when selling as a result. If you have any significant amount of money to invest, you will want to use a standard discount brokerage like eTrade. However, if you only have $100 and want to get into the stock market, Loyal3 is not a bad choice.

It bears repeating even if you use Loyal3 and to invest in a great company for no fee and hold for many years, a 1000% gain on $100 will only take you to $1,000 an inconsequential sum when the average person in the U.S. makes $40,000+ every year. Loyal3 makes a lot more sense if you can continually save and invest $100 over and over again, so that you are saving $50+ a month and consistently investing it.

The Best Method for Investing $100

I love the stock market (after all this site is primarily about investing in the stock market), but I realize that $100 by itself is not enough to get any traction in the market. As a result, I wanted to suggest an alternative method for investing that $100: starting an online business.

In particular, starting a blog or information-based website (much like the one you are reading) is within reach of anyone with $100. You can start your own easy-to-use website that looks good for under $100. In fact, the page you website you are reading this article on now took less than $100 to get up and running and I did not do a single bit of programming or graphic design.

I have created a fully detailed guide dedicated to this process, starting with my article: How to Start a Blog or Website and Make Money (Possibly A Full Time Income) From It. Below, I will give a quick crash course and overview of the website creation process and how you can make money off of doing this for very little investment.

Here is how the costs would break down:

Domain Name $11. Purchasing the rights to a domain name (like HowToInvestHQ.com) will run you $11 a year. I would recommend NameCheap  for this service.

Hosting $8/month. Once you own your domain name, you will need a host (a computer connected to the internet) to store your website and display it to visitors. I recommend HostGator for this purpose.

WordPress $0 : WordPress is a free content management system (the software in which you create your website). You can install this for free using your HostGator account (or on any other hosting account).

• Need help setting up your website? I have created a guide to registering a domain name, setting up hosting, and installing WordPress: How to Set Up a Website With WordPress .

Premium WordPress Theme $50. WordPress allows users to change the look of their site by installing new themes. This site you are reading is not using a custom design but is rather using something known as a premium WordPress theme. These are designs which creators sell in the neighborhood of $20 to $60. This particular theme cost around $50. I recommend browsing WordPress themes at ThemeForest.net .

Custom Header Banner $15:  Once you have WordPress up and running and the theme you want selected, you can get a custom header banner created for $15 on Fiverr.com. Search for header banner and you will find dozens of excellent providers. Pick one that appeals to you and get started.

This budget above leaves $16 leftover use it to pay the next two months of your web hosting. If you update your new site regularly, you might be making the $8 a month you need by the end of month 3 to continue to pay for your hosting. At that point, any extra income your online business makes will be profit!

Creating Your Website

Once you have made all the necessary preparations, you can use WordPress to write content and create pages for your website. I recommend heading over to YouTube and watching a few videos on topics like how to use wordpress if you are confused. However, I promise you it is very easy I recently set up a WordPress site for my fifty-something aunt. I sent her the log in and password, and she has had no problem updating the site herself without any instruction.

WordPress is so easy to use because there is nothing to download the entire thing is managed online. Additionally, the platform operates on a what you see is what you get (WYSIWYG) editor, which looks similar to Microsoft Word. When you are happy with the page or post, you simply click Publish and the post appears on your site just as it appeared in the editor.

What Topics Should I Chose?

There are literally hundreds of thousands of potential topics for your website. You can talk or write about anything that interests you. I have chosen the stock market for this website, as I am interested and active in investing and there is a large audience. However, a broad base is not required; I have had success with sites with a very narrow audience, such as sites dedicated to strategy for particular video games or websites dedicated to a particular health condition.

Most people can relate to lifestyle, health, and fitness topics in some way. These topics tend to be easy to write about and have a very large audience, so consider one of these topics if you are not sure what to make your website about.

How Do I Make Money Off The Website?

In order for the initial $100 investment to pay off, you will have to generate revenue from your website. Fortunately, this is a lot easier than it sounds. The easiest way to generate revenue off an information-based website is via Google Adsense, discussed in-depth in this linked post . Google AdSense grants you access to advertising codes to place on your site. Google will automatically match your site with relevant advertisers and display their ads. As users click on Google AdSense ads, you get paid money. As you generate more traffic to your website by adding new articles and sections, the amount of money you earn via AdSense will naturally increase.

As your site matures and gets more visitors, there are many different ways to make money off of your website that are highly dependent upon your websites topic. One good choice is affiliate programs, which  allow you to advertise related services in exchange for commission. These can be very lucrative if implemented correctly. You can find affiliate programs by searching Google for your sites topic plus the words affiliate program.

A final level of website maturity is considered to be creating your own products or services to sell to your readers. While a blog might make good money off of, most bloggers eventually aspire to write a guide or book about the topic of their website. If you have a devoted reader base, a book already has many buyers waiting for it upon its release.

For this particular website, I started off with Google AdSense, then moved into being an affiliate for eTrade. Each user I refer to eTrade generates a commission for me. Since this site discusses stock market help, it is natural for some users curious about the stock market to sign up for an account. Finding these natural fits for affiliate programs is key to making a good return. If the site becomes popular enough, I will likely write a book on stock market investing and sell it through the site. This would be particularly good for this site, as book sales will not directly conflict with eTrade referrals; users looking for investing advice can buy the book, whereas those looking to start an investment account can still be referred to eTrade.

The earnings potential for an online business that you can start for under $100 is unlimited it is just a question of the quality and size of your website. The more pages you put up that people like, the better you will do and the larger your return. This is a much better way to invest $100 than putting it into the stock market.

Once you start generating a few hundred dollars a month from your online business, you can then use some of those profits to start saving to invest into the stock market (consider following my public portfolio  at that time) just do not forget take some of those profits and reinvest them back into the website itself for further promotion.

While I love investing in the stock market, know that even great investors cannot do much with $100. It is not enough money to make a serious return. Instead, if you are serious about making a significant amount of money and only have $100 to get started with, I strongly recommend starting a website.

If you are ready to get started, I have created a highly detailed (and free!) guide demonstrating how to create a money-making website on a budget of under $100.  Head over to the first article in the series, How to Start a Blog or Website and Make Money From It .