How to Start Investing With $100 or Less

The biggest myth in personal finance is that you need a lot of money to start investing. You don't. You can start with $100. You can start with $50. You can literally start with $5 if you want. The barrier to entry hasn't been money for years — it's been the belief that you need more money than you have.

That belief is costing you the one thing you can't get back: time. Every month you wait to invest because you "don't have enough" is a month of compound growth you'll never recover.

Why Starting Small Actually Matters

Here's the math that should motivate you: $100 invested monthly at an average 8% annual return grows to roughly $150,000 over 30 years. You'd contribute $36,000 out of pocket. The other $114,000? That's compound growth doing the work.

Now here's what happens if you wait five years to start because you wanted to have "enough" first: the same $100/month at 8% over 25 years grows to about $95,000. You'd lose roughly $55,000 — not because you invested less money, but because you gave compounding five fewer years to work.

Starting with $100 isn't a consolation prize. It's the whole game. The amount matters far less than the habit of investing consistently.

Step 1: Open the Right Account

You need an investment account. This is different from a savings account — it's where your money actually gets put to work in the market.

For most people starting out, here are your best options:

Roth IRA — if you have earned income, this should be your first stop. Contributions grow tax-free and withdrawals in retirement are tax-free too. The annual limit is $7,000. If you're not sure which IRA to pick, this breakdown of Roth vs. Traditional will help.
Taxable brokerage account — no contribution limits, no income restrictions, no withdrawal penalties. You'll pay capital gains tax on profits when you sell, but there's maximum flexibility here.
401(k) — if your employer offers one with a match, contribute at least enough to get the full match before opening other accounts. That match is free money.

Recommended brokerages for beginners: Fidelity, Schwab, and Vanguard all have no account minimums and commission-free trading. Opening an account takes about 15 minutes.

Step 2: Pick a Simple Investment

This is where people overthink it. You don't need to research individual stocks, read analyst reports, or build a complex portfolio. Not with $100. Not even with $10,000 honestly.

Buy a broad market index fund or ETF. Here are the straightforward options:

VTI (Vanguard Total Stock Market ETF) — owns the entire U.S. stock market. Over 4,000 companies in one fund. Expense ratio: 0.03%.
VOO (Vanguard S&P 500 ETF) — owns the 500 largest U.S. companies. Expense ratio: 0.03%.
FXAIX (Fidelity 500 Index Fund) — same concept as VOO but in mutual fund form. No minimum investment at Fidelity. Expense ratio: 0.015%.

Any of these is a perfectly solid first investment. You're buying a small piece of the entire American economy. The S&P 500 has averaged roughly 10% annual returns over the long term. You're not picking winners and losers — you're owning the whole game.

If you want to understand exactly what you're buying, this post explains how index funds actually work.

Step 3: Automate It

This is the most important step and the one most people skip. Set up automatic recurring investments. Every payday, have $25, $50, or $100 automatically transferred from your checking account to your investment account and invested into your chosen fund.

Why automation matters:

It removes the decision from every paycheck — you invest before you can spend it
It uses dollar-cost averaging — you buy more shares when prices are low and fewer when prices are high, naturally smoothing out volatility
It builds the habit without willpower

Most brokerages let you set up automatic investments in about two minutes. This single step is the difference between "I should start investing" and actually doing it.

What About Fractional Shares?

If a single share of VOO costs around $500 and you only have $100, you might think you can't buy it. That used to be true. It's not anymore.

Fractional shares let you buy a dollar amount of any stock or ETF. With $100, you can buy exactly $100 worth of VOO — roughly one-fifth of a share. You get the same proportional returns as someone who owns full shares.

Fidelity, Schwab, and most major brokerages support fractional share investing. There's truly no minimum to get started.

Common Objections (and Why They're Wrong)

"$100 won't make a difference." It will. Not tomorrow, but in 20 years you'll be glad you started. And $100/month is $1,200/year, which over a career becomes six figures.

"I should wait until I pay off debt." Maybe — if it's high-interest debt above 7%. But if you have a 401(k) match, you should invest enough to get it regardless. For the full framework on deciding between debt and investing, read this breakdown.

"The market could crash." It will, eventually. It always does, and it always recovers. If you're investing for 20+ years, short-term crashes are buying opportunities, not reasons to stay on the sidelines.

"I don't know enough." You know enough right now to open an account and buy a total market index fund. That's the same strategy used by many of the most sophisticated investors in the world. You can learn more as you go — but you don't need to learn more to start.

The Bottom Line

You don't need $10,000 to start investing. You don't even need $1,000. You need a brokerage account, a simple index fund, and the willingness to start with whatever you have. The amount you invest matters less than the fact that you invest at all. Start with $100. Start with $50. Just start.

Want the full roadmap? Our Investing Starter Kit walks you through everything from opening your first account to building a real portfolio.