$100‑a‑Month Plan for Gold First-Timers
It’s probably no surprise that gold is expensive: An ounce of it is worth about $4,500 as of mid-January.
But if you want to invest in precious metals, it is possible to do so for much less than that. Here’s how you can build your gold savings even if you only want to spend $100 a month on the asset.
How the dollar-cost function of gold works
Dollar cost averaging is a popular strategy that involves investing a fixed amount of money over time. This method allows investors to ride the ups and downs of the market, buying fewer shares when prices rise and more when they dip. The idea is that you can manage risk, avoid emotional reactions to market movements and stick to your long-term plan. Another way to do this with gold is to invest $100 every month.
While spending $100 a month on physical gold can be difficult, you can invest in a dollar-denominated gold exchange-traded fund (ETF), such as the SPDR Gold Shares ETF (GLD) and the iShares Gold Trust (IAU).
Diversified investors into a few assets may choose to accumulate gold purchases during dips and reduce the amount of gold they buy during upswings. That approach makes more sense for investors who carefully monitor their portfolios and invest across asset classes and multiple sectors, so dollar cost averaging may make sense for many investors.
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What a realistic $100-a-month plan
Investing $100 a month may not sound like much, but the investment and compounded returns can add up over time. If you continue that trend, you will have invested $3,600 in three years. The amount of physical gold and shares you can buy for $100 will vary each month.
Past performance doesn’t guarantee future returns, but an analysis from Ben Carlson, Director of institutional asset management at Ritholtz Wealth Management, found if you consider all the precious metal’s annual performance between 1928 and 2025, you’re looking at an annualized return of 5.6%.
Investors should see what the costs will be before investing in any gold fund. These costs are shown in the cost estimate. If you’re going the physical gold route, don’t forget to consider shipping, storage and insurance costs.
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The pros and cons of investing $100 a month
Starting with a monthly investment of $100 makes it easy to accumulate gold. You also get a quick start instead of feeling like you have to save enough money to buy an ounce of gold. Investors who can maintain this trend for a long time will be rewarded greatly. Small money habits are inclusive and can bring you closer to your financial goals.
Investing a small amount in gold every month can diversify your portfolio and make it inflation-resistant. If you don’t have $100 available to invest each month, you can start small and gradually build your exposure to gold. You can also increase your monthly investment to more than $100 if you believe it makes sense for your portfolio. It’s a good idea to periodically review your holdings to ensure you have the right amount of diversification for your risk tolerance.
On the other hand, you may have to invest consistently and for years (or decades) to get the returns you want. You’ll also get fund fees if you buy an ETF or mutual fund that offers exposure to gold, but they’re usually lower.
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