HOW TO INVEST $100 PER WEEK ASAP

What's up you guys? It's Graham here. So in the last few months, this channel has grown more than I ever would have imagined. Because we have so many new people joining us, I think it's really important that we get back to the basics and discuss some of the best strategies that you could begin using today to begin creating passive income, building wealth, and investing your money. It really all begins with how to invest $100 a week.

Now, here's why this amount is so significant. First, even though $100 a week doesn't seem like enough money to one day buy a mansion and a Ferrari, believe it or not, $100 a week is enough to make that happen. If you could follow this video consistently and invest $100 a week for 40 years at an 8% return, you will wind up with just over $1.5 million. Even though I can't speak for real estate values 40 years from now, here's a house for $875,000 and here's a Ferrari for $147,000. Even if you buy both of those outright in cash, you're still going to have over $500,000 left over, all from investing $100 a week.

That's why it's so important to learn these now, as soon as possible because the sooner you start this, the more money you will make. So with that said, if you guys enjoy these topics of how to turn $100 a week into $1.5 million and you find this even remotely helpful, just do me a favor and smash the like button for the YouTube algorithm. Thank you so much; it means a lot. We're going to begin right over here at my desk.

All right, so the first step to investing $100 a week is to first have $100 a week to invest. Okay, but seriously, I want to talk about this one first because in the event you don't have an extra $100 a week to invest, we got to get you an extra $100 a week to invest. If we break that down just a little bit further, that works out to be $14.2857 every day. So, the first thing that I would do is carefully look through your day-to-day spending and just see if there's a way that you could reduce your overhead by $14 a day.

Perhaps that means not eating out, or maybe you negotiate your insurance rates, or maybe you cancel your cell phone bill and just go and watch free YouTube videos. Or maybe you could switch to a less expensive cell phone provider, or maybe you cancel Spotify and just listen to the ads. Regardless of the method, from my own experience consulting with hundreds of people on their personal finance spending habits, I would venture to say that the majority of people would be able to make this happen just by cutting back on their current spending.

But for anybody else who simply can't cut back any more than you already are, then it's really up to you to make up that difference in income by potentially working a part-time job, switching careers, learning a new skill, or doing anything else you can to increase your income. No joke, but if this is you, then thinking about investing is not going to have as good of an ROI as increasing your income is. So finding any extra work or switching careers should be a priority at this point until you have the money left over to consistently save and invest.

Next step, step two. Once you have $100 a week, it's really important that you begin to put together a 3 to 6-month emergency fund. Listen, I know guys, it's not exciting to talk about building up a 3 to 6-month emergency fund, but sometimes making money is not all exciting. The reality is that investing your money and making millions of dollars long term is rather boring. These strategies are not as exciting as going to the casino and throwing it all on red. Instead, the majority of this is rather uneventful, and not a lot happens early on.

But if you want to make millions one day, this works nearly every single time. So first, you got to be okay setting up that emergency fund. Now, this is all just a savings account that you could keep in cash to cover 3 to 6 months worth of your expenses. In the event that something happens, you lose your job, the money printer stops going BRRR, or the stimulus deal just never works out, at least if an emergency like that happens, you'll have 3 to 6 months worth of overhead to cover all of your expenses until you can get back on your feet.

Doing this is incredibly easy. All you got to do is throw your cash in a savings account with zero fees that pays you above a 6% interest rate. Really, hopefully, you'll never need to use that emergency fund, but at least it's there in the event something happens. And $100 a week should go a long way towards getting this foundation taken care of early on.

Now, step three. We're going to be getting into the juicy stuff that I'm sure you guys all want to hear about. Almost everybody should be doing this, if you aren't already, and that's using $100 a week towards maxing out your Roth IRA. Now, for anyone who's not aware what this is, this is just a tax-advantaged retirement account that lets you contribute post-tax money, meaning taxes have already been taken out of what you contribute. Then, by the age of 59 and a half, you could take out all the money in the account completely tax-free.

Now, here's how big of a deal that is. Let's just say you open up a Roth IRA at 18 years old and you contribute $400 a month to it. Then, let's also assume you're averaging an 8% return on your money. By the time you're 60 years old, you will have contributed $21,600 into your Roth IRA over 42 years, just with $400 a month. However, because your money has been invested the entire time, that total account value has grown to $1,698,182.79 by the age of 60. That leaves you with nearly $1.5 million worth of profit.

But here's the thing: technically, had you invested that money normally without a Roth IRA, you would have to pay taxes on that $1.5 million worth of profit. As we all know, it's unnecessary to pay taxes like this if it could be easily avoided, and that's where this comes in. A Roth IRA circumvents the tax you would owe because you paid your taxes already upfront on the money you invested, leaving you with the entire amount completely tax-free at the age of 59 and a half.

Prior to that, you can take out whatever money you put in the account without any fees, any tax, or any penalty. This means if you contributed $20,000 into that account over 6 years, you could take out that very same $20,000. Except, any excess profits have to stay in the account; otherwise, you'll be subject to a 10% fee and pay taxes on it. And, uh, yeah, that's no fun, so don't do that. Instead, just invest what you intend to hold long term until retirement, and then you could buy that house and Ferrari.

So really, in terms of a Roth IRA, $100 a week is the perfect amount to invest to nearly max it out each and every year. For the record, I got to mention the Roth IRA is not the investment itself; it is simply the account from which you invest in. So you're still going to need to invest your money within the Roth IRA, like with stocks or with index funds. Index funds are what I do, and for most people watching, I would just recommend a very simple low-fee index fund that follows the total stock market or S&P 500.

Here are a few examples I like: VTI, VOO, VXF, SPY, or anything else like this. A lot of these funds historically have averaged about a 7 to 8% return with dividends reinvested, adjusted for inflation. So I think long-term these should all be pretty sound investments.

Step four, another alternative to a Roth IRA is investing in a 401(k). Depending on your employer, this one could be even better than a 401(k). So here's what you need to know: this is an account that you invest pre-tax money into, and then you pay taxes when you begin withdrawing the money after the age of 59 and a half. For example, if you invest $100 a week into a 401(k), you're going to be taxed as though you've made $100 a week less on your paycheck.

That saves you money upfront by lowering your tax bill, thereby giving you more money upfront to invest with to then make you more money. But like I said, the catch here is that you end up paying taxes on this money later in retirement when you withdraw the money from the account. I got to say, if I were a betting man, I'd probably venture to say that taxes in the future will be higher than the amount that they are today.

So really, from my perspective, the 401(k) only makes sense in a few scenarios. The first is when your employer offers you what's called a 401(k) match, which means they will match your contribution dollar for dollar up to a certain amount. Essentially, that just means you're doubling your money instantaneously with zero risk whatsoever. Now, the rule of thumb with doing this is that you should always do it. Always. No matter what. Don't hesitate. If your employer has a 401(k) match, always take it. Always take the employer 401(k) match up to the maximum, always, no matter what.

Second, a 401(k) also makes sense if you're in a really high tax bracket right now and you know or you think you're going to be retiring in a much lower tax bracket in the future. For example, maybe you're making $200,000 a year now, and you know in like 10 years from now you're going to be retiring off an income of $40,000 a year. That way you could save money on taxes upfront and then pay taxes in the future at a much lower rate.

Now, the variable here is that you end up making more money in retirement or the tax rates go up so that you end up paying more money in the future than you would pay today. If taxes go up in the future too, then you might end up paying more, which is a bit of a risk with this. Again, this really all depends on your situation, but I would say for 99% of people out there, at least contribute to the 401(k) up to the employer match, and then anything else after that, I'd probably recommend just a Roth IRA.

But again, that's just me. I have a feeling if $100 a week is all you have left over and your employer does not offer an employer match in the 401(k), then most likely a Roth IRA is going to be the best option for you.

Step five, the next way to invest $100 a week is another not-so-exciting one, but this one could potentially be worth the most amount of money long term if it applies to you. That would be using $100 a week to pay down any high-interest rate debt. In the event any of you watching have credit card debt, a personal loan, student loans at a high interest rate, or really anything else over 6%, chances are the best option for you is using that $100 a week to pay down that debt until it's nothing.

Now, here are my thoughts on this: If you invest your money, on average, you're likely to expect anywhere from a 6 to 12% return on your money, and you take on the risk that some years you might actually lose money. On the other hand, by paying down high-interest rate debt, it's really the equivalent of you getting a guaranteed return at whatever the interest rate is. Because otherwise, if you didn't pay it down, it's costing you that amount of interest.

For example, paying off a credit card with a 20% interest rate is the exact same equivalent of you getting an immediate guaranteed 20% return on your money. The same thing applies to any outstanding loan that you have. So there's really no downside to this, and the savings you get from this are instantaneous. Now on the other hand, if your interest rate is below 4 or 4.5%, then it might be a good idea to invest the difference elsewhere where that money could make you more than that. But anything above 4.5%, and I would probably recommend you use some of this money towards paying that down.

Now, again, this might not be as cool as throwing all of that money on Tesla call options with Robinhood, but statistically, this is going to be the best use of your money afterwards.

Step six: I know it's super cliché to say this and every video recommends this, but you know what? No shame. I got to say it. Depending on your circumstances, sometimes it's better to spend $100 a week investing back in yourself. Here's the thing: when you look at the initial ROI of investing $100 a week in the very beginning, it's not really a lot of money. Even if you get this incredible 20% return the first year, that could pale in comparison to the amount of money that you could make for yourself.

You could have the ability to earn an extra $1,000 a month with the proper training and certification. Especially when you're young, making more money can set you up on a completely new trajectory in terms of building long-term wealth. For example, $100 a week would pay for pretty much every single money-making book out there in existence. You could also use that towards paying for a trade school or a certification in some sort of specialized industry. You could also take new classes online to progress your career.

$100 a week is more than enough to progress whatever you're currently doing — except maybe that's not enough to pay for Harvard at full tuition. But besides that, you don't need Harvard to make a lot of money. Just take this section to heart, and if $100 a week extra is all you have at your disposal, consider investing some of that back in yourself. Books and career certifications are probably going to be the best use of your money at this level. The goal is that doing this is going to help make you more money long term so that way you’ll have more money left over to save and invest.

Finally, step seven: if you don't want to follow anything that I just mentioned but you still want to invest, then I would recommend opening up a normal taxable brokerage and then just investing in that. For example, the free stock trading app Webull is now offering you three free stocks when you deposit $100 in the platform. Until the end of October, one of the stocks is potentially worth all the way up to $1,600. So you may as well use that $100 towards getting three free stocks because why not? It's free money.

There's also plenty of other free stock trading brokerages out there like Vanguard, Charles Schwab, Fidelity, Ally, Robinhood, and so on. From there, you can just invest your money freely, and by doing this, you would have access to all of your money anytime you need it without paying any penalties for cashing out before the age of 59 and a half. However, any profits you make from this will be taxed, which is why I recommend you familiarize yourself with the benefits of long-term investing and long-term capital gains tax. You should also really understand which tax brackets you fall under so you know exactly how much tax you're going to have to pay.

Now, as far as what to invest in, you guys know me. I'm just going to recommend a broad index fund or ETF that covers the S&P 500 or total stock market index. If you want to start dabbling by buying individual stocks, just really understand exactly what you're investing in. Do your own research and stay far, far away from Reddit's Wall Street Bets.

Lastly, the final option is that you could use some of this money towards starting your own business that has the potential to make you even more money. This might be enough to buy some basic equipment to get going. It could be enough to get some certifications or get your license to sell real estate. It could be enough to buy camera equipment to make YouTube videos. The sky is the limit, but the point is investing $100 a week to start a business could end up making you significantly more than investing $100 a week in pretty much anything else.

I would first start out by taking a look at the things that most interest you and then see if you can incorporate a business within that. For me, I was initially really interested in sales in real estate, so getting my real estate license was a really easy segue into a career that ended up making a lot of money. The same thing with making YouTube videos. I mean, all of my camera equipment that I'm using right now is probably worth under like $3,000 at the very most.

So in that regard, spending $3,000 towards building a YouTube career was probably some of the best money ever spent. With a lot of dedication, education, and consistency, starting a business with $100 a week could be some really good money spent.

Listen, if there's one piece of advice you take away from this entire video, let it be this: the sooner you start investing, the better. That's because the money you invest today will make you more money, and that money will make you more money, which means the sooner you start investing, the more money you will make.

Just consider this: investing $5,000 a year at 18 is going to give you about $1.8 million by the time you're 65 years old. But if you start investing just 10 years later, at 28 years old, with that exact same $5,000 a year, you're only going to have $918,000 by 65, which is pretty much half. So starting just 10 years earlier is going to give you double the amount of money later in life.

When you start to realize that the money you have today is going to be worth double what it will be in 10 years from now, that better be a good reason to get you to start investing as soon as you possibly can.

Anyway, with that said, those are the ways that I would recommend investing $100 a week because that is an amount that could add up to a pretty considerable nest egg later on in life if you're consistent. Ideally, go through this list and prioritize them from building up an emergency fund, paying down any high-interest rate debt, starting a Roth IRA, contributing to a 401(k) up to the employer match, starting a business, investing in yourself, and doing anything else mentioned here.

All of this really just begins with $100 a week, and once you get this down, that amount could scale up to whatever amount you decide to invest in, as long as, of course, you smash the like button for the YouTube algorithm.

So with that said, you guys, thank you so much for watching. I really appreciate it. As always, make sure to destroy the subscribe button and the notification bell. Also, feel free to add me on Instagram; I post pretty much daily. So if you want to be a part of it there, feel free to add me there.

On my second channel, The Graham Stephan Show, I post there every single day I’m not posting here. So if you want to see a brand new video from me every single day, make sure to add yourself to that. And lastly, if you guys want those three free stocks, use the link down below in the description. Weeble is now going to be giving you three free stocks when you deposit $100 on the platform, with one of those stocks potentially worth all the way up to $1,600.

So if you want those stocks, use the link down below. Let me know which stocks you get. Thank you so much for watching, and until next time!