Investing $100 a month gives you the chance to make regular progress toward your financial goals. Sticking to a regular commitment can help you build wealth over time. If you are ready to invest $100 a month, your returns will vary based on your investment choices. Although it’s possible to build an investment portfolio by yourself, working with a financial advisorcan help you keep it balanced.

**What Impacts Your Investment Returns**

Whether you’re investing $100 a month or $1,000 per month, your investment returns are impacted by several factors. Specifically, the assets you choose and your investment timeline will significantly impact your returns. Here’s a closer look at both:

**Assets.**The assetsyou invest in have a big impact on your investment returns. Investors with a higher risk tolerance might choose more volatile assets, which have the potential for greater returns. But investors with a lower risk tolerance often choose more stable assets, which come with lower returns.**Investment timeline.**The amount of time you plan to let your investments grow matters. Not only will a longer timeline allow you to contribute a more substantial sum to your portfolio, but it also gives your investments a chance to grow.

**Invest $100 a Month in the Stock Market: Potential Returns**

Investing in the stock market is one way to build your portfolio. Typically, the stock market is viewed as a relatively risky investment due to its inherent volatility.

Let’s look at the potential returns for two different scenarios:

**Long-term investor.**Using SmartAsset’s investment calculator, let’s say you’re investing $100 per month with retirement in mind. You plan to invest $100 per month for 25 years and expect a 10% return. In this case, you would contribute $30,000 over your investment timeline. At the end of the term, your portfolio would be worth $133,889. With that, your portfolio would earn around $103,889 in returns during your 25 years of contributions.**Short-term investor.**Let’s say that you are investing $100 per month with a future home down payment in mind. You plan to invest $100 per month for five years and expect a 10% return. In this case, you would contribute $6,000 over your investment timeline. At the end of the term, SmartAsset’s investment calculator shows that your portfolio would be worth nearly $8,000. With that, your portfolio would earn around $2,000 in returns during your five years of contributions.

It’s easy to see that time is on your side when it comes to building an investment portfolio. If possible, stick to a long-term investment horizon. Although it’s not always possible, a long-term outlook can help you make the most of your portfolio contributions.

For those looking to harness the power of the stock market, investing in an index fund tied to the is an often-recommended strategy. With this choice, you can ensure your investment portfolio keeps up with the market. That’s much easier to do than beating the stock market.

**Invest $100 a Month in the Bonds: Potential Returns**

Investors with a lower risk tolerance often choose to invest in bonds. Typically, these are considered to be safer investments than the stock market. But with that safety comes smaller returns.

Let’s look at the potential returns for two different scenarios:

**Long-term investor:**Let’s say that you are investing $100 per month with retirement in mind. You plan to invest $100 per month for 30 years and expect a 6% return. In this case, you would contribute $36,000 over your investment timeline. At the end of the term, your bond portfolio would be worth $97,451. With that, your portfolio would earn more than $61,000 in returns during your 30 years of contributions.**Short-term investor:**Let’s say that you are investing $100 per month with a big purchase in mind. You plan to invest $100 per month for five years and expect a 6% return. In this case, you would contribute $6,000 over your investment timeline. At the end of the term, your portfolio would be worth $6,949. With that, your portfolio would earn around $950 in returns during your five years of contributions.

Although the returns offered in the bond market are less compelling than the stock market, the relative security is a key factor for many investors.

**Save $100 a Month in a Savings Account: Potential Returns**

If you are on the fence about investing your money at all, an alternative is choosing to save your money. Of course, building up savings is preferred to spending all of your money. But keeping too much of your money in savings means you’ll miss out on investment returns.

For example, let’s say that you chose to save $100 per month for the next five years. You make all the right moves by opening a high-yield savings account that promises an APY of 2%. During this time, your $6,000 of contributions would grow to $6,303. In other words, you would have only earned around $300.

Saving is important. But this example highlights the importance of investing if you are looking to build wealth over the long term. If you have room in your budget to make regular investments, then make that a priority after you’ve built a reasonable emergency fund to cover your expenses for a few months after any unexpected financial blows.

**Bottom Line**

When you make fixed contributions on a regular basis to your investment portfolio, you can slowly build wealth. Although it might take time to see the fruits of your labor, it can definitely pay off in a big way. Investors comfortable taking on more risk might find the biggest returns in the stock market. But investors seeking a low-risk option might find what they are looking for in the bond market.

**Tips to Reach Your Savings Goals**

- A financial advisor can guide you in building a portfolio that matches your financial needs and goals.SmartAsset’s free tool matches you with up to three financial advisorswho serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- If you need help figuring out the asset balance for your portfolio, SmartAsset’s free toolcan show you different portfoliobreakdowns based on the risk profile that you choose.

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