Matt Frankel: I’d like to add to all the excellent advice above that the type of account you choose to invest in can be even more important than what you choose to invest in. If I were planning to invest $100 per month, I’d be sure to do it in a tax-advantaged account like an IRA.
There are two types of IRAs — Roth and traditional, with the principal difference being tax benefits. Traditional IRA contributions may be deductible on your taxes, so by investing $100 per month you could end up with a $1,200 deduction at the end of the year (savings of $300 if you’re in the 25% bracket). On the other hand, Roth IRA contributions aren’t deductible, but your withdrawals in retirement will be tax-free. Plus, in a Roth account you have the option of withdrawing your original contributions (but not earnings) for any reason. With both accounts, your money compounds with no capital gains or dividend taxes each year.
The long-term savings can be huge. For example, let’s say that you stash $100 a month in a Roth IRA for 30 years. Based on the S&P 500’s historical performance, you could end up with a nest egg of nearly $180,000. If you are in the 25% tax bracket at retirement, having this money in a Roth IRA could mean $45,000 in tax savings — and that doesn’t even consider the dividend and capital gains taxes you didn’t have to pay along the way. If you really want to push yourself to save more, you can put up to $5,500 into an IRA in 2016 — or up to $6,500 if you’re aged 50 or older.
Aircle from:https://www.fool.com/how-to-invest/best-way-to-invest-100-a-month.aspx (delete please contact this E-mail: firstname.lastname@example.org)