Jan 23 2023

Stock Dividends - What are they and how do they work?
A stock dividend is the distribution made by a company to its shareholders in the form of additional stock of the company.
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By Stefano Treviso , Updated on: Apr 07 2023.
$100 is definitely enough to start investing in stocks thanks to fractional share trading which allows an investor to purchase small fractions of a highly priced stock.
The main reason that people don’t start investing is that they believe they require large amounts of capital to do so, but what they don’t understand is that any money invested is better than any money spent on unnecessary luxuries.
Let's take a look at a few examples of what happened with some investors that only had $100:
An investor that chose to invest $100 in Amazon stock on the first of January 2018, purchased in total 0.085 units of a single Amazon stock. In present times (6th of October 2021) that same investment is worth $273.7.
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An investor that chose to invest $100 in Microsoft stock on the first of October 2015, purchased a total of 2.23 shares. In present times (6th of October 2021) that same investment is worth $642.
An investor that chose to invest $100 in the SPY (an ETF that aims to mirror the performance of the S&P 500 index) on the first of March 2016, purchased 0.50 units of SPY. In present times (6th of October 2021) that same investment is worth $216.55.
As you can see, the biggest mistake in every person’s life is to not start investing!
It’s very common to see a lot of people having unrealistic expectations from the stock market as they believe that only if you can make large amounts of profits then it’s worth it. This assumption couldn't be more wrong. What matters is producing any kind of returns at all.
Holding money in a bank account will never make anyone wealthy. Banks offer some saddening interest rates that vary between 0.01% to 0.5% in the best case scenarios.
When it comes to investing $100, it boils down to the following questions:
If those $100 somehow are money you need in the coming months for paying rent or buying food, then definitely not a good idea to invest them as all investments carry risk.
If you’re looking to invest $100 on a regular basis such as recurring investments at the beginning of every month, we recommend you to read our Dollar-Cost Averaging guide in order to structure your investment plans accordingly.
If you only have one shot at investing $100 and you won’t have any more funds available after that and you still insist on investing them, you’re better off trying to invest in lower risk assets such as the ETF known as the SPY. The logical reason for this is that this ETF tracks the performance of the S&P 500 index which tracks the performance of the top 500 large-cap companies in the U.S, which means something for you:
One company can collapse and all the others can continue to do well, which means that over the long run, there is a bigger likelihood that the whole U.S economy will continue to thrive, whereas if you invest your $100 in a single stock, you’re completely dependent on the fate of a single company.
Good luck!
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