Investing can seem like a game for the wealthy, but the truth is, you don’t need thousands of dollars to get started. With as little as $100, you can begin your journey toward building wealth through smart, strategic investing. Whether you’re saving for retirement, growing your savings, or simply looking to get your feet wet in the world of finance, investing with a small budget is more accessible than ever.
In this blog post, we’ll walk you through how to start investing with just $100, providing actionable steps and tips to make the most out of your investment.
1. Why Invest with $100?
First, let’s answer a common question: Why bother investing with just $100? The answer lies in the power of compounding and time. While $100 won’t make you rich overnight, it’s a start — and a start is the most important thing.
When you invest your money, whether in stocks, ETFs, or other assets, it has the potential to grow over time. By consistently reinvesting your gains and adding to your investments, you can watch your wealth accumulate — all from an initial small investment.
Starting with $100 might seem modest, but the key is to build habits, learn the ropes, and gradually increase your investments as you get more comfortable.
2. Set Your Financial Goals
Before jumping into any investment, it’s important to understand why you’re investing. Are you planning for retirement? Looking to save for a big purchase in the next few years? Or simply building wealth for the future? Your goals will influence the type of investments you choose.
- Short-Term Goals (within 1–5 years): You may want to prioritize safer, more liquid investments (like high-yield savings accounts or short-term bonds).
- Long-Term Goals (5 years or more): You can afford to take on more risk with the potential for higher returns. This is where stocks, ETFs, and index funds come into play.
The clearer your goals, the easier it will be to decide how to allocate your $100.
3. Pick the Right Investment Account
To begin investing, you’ll need an account to hold your investments. There are two main types of accounts to consider:
- Brokerage Account: This is the standard account for buying stocks, ETFs, mutual funds, and other securities. It offers flexibility, and you can usually open one with as little as $100.
- Roth IRA or Traditional IRA: These are tax-advantaged accounts that are designed for retirement savings. While you can start with $100, an IRA is more beneficial for long-term investors focused on retirement.
If you’re just getting started, a brokerage account is the simplest option, allowing you to invest in individual stocks and ETFs. But if you’re thinking long-term and want tax benefits, an IRA could be the right move.
4. Choose an Investment Platform
Now that you’ve decided on the type of account, it’s time to pick a platform where you can invest your $100. Fortunately, there are several beginner-friendly, low-cost platforms that make investing easy:
- Robo-Advisors: These automated platforms, like Betterment and Wealthfront, manage your portfolio based on your risk tolerance and goals. Robo-advisors are great for beginners, as they handle the investment decisions for you. Many of these platforms have low minimum requirements (sometimes as low as $100), making them perfect for starting small.
- Discount Brokerages: Platforms like Robinhood, Fidelity, and Charles Schwab allow you to buy stocks, ETFs, and more with no commissions or fees. They also let you invest in fractional shares, so you can buy a portion of expensive stocks like Amazon or Tesla even with a small budget.
- Micro-Investing Apps: Apps like Acorns and Stash help you invest small amounts of money by rounding up your everyday purchases to the nearest dollar and automatically investing the change. These apps allow you to start investing with as little as $5 or $10.
5. Decide Where to Invest Your $100
With your account set up, the next step is deciding where to allocate your $100. Here are a few beginner-friendly investment options:
- ETFs (Exchange-Traded Funds): ETFs are a great way to get exposure to a variety of assets (stocks, bonds, real estate, etc.) with a single investment. For example, an ETF that tracks the S&P 500 allows you to invest in 500 of the largest U.S. companies. ETFs are low-cost, diversified, and a great way to get started with small amounts of money.
- Index Funds: Similar to ETFs, index funds track a specific market index, such as the S&P 500 or the total U.S. stock market. Index funds are great for beginners because they provide automatic diversification at a low cost. Many platforms allow you to invest in fractional shares of index funds, making them accessible even with $100.
- Stocks: If you have a specific company in mind, you can use your $100 to buy individual stocks. While individual stocks can be more volatile, they offer the potential for high returns if chosen wisely. Look for companies with strong growth potential and a good track record.
- Dividend Stocks: Stocks that pay dividends can provide a steady stream of income, even if the stock price doesn’t appreciate as much. Many well-established companies, like Coca-Cola or Johnson & Johnson, pay dividends to shareholders. You can reinvest these dividends into more shares, helping your investment grow over time.
6. Consider Dollar-Cost Averaging
With only $100, it might be tempting to make a single large investment, but an alternative strategy is Dollar-Cost Averaging (DCA). This approach involves investing a fixed amount of money at regular intervals — for example, $25 per week or $50 per month. By spreading your investment out over time, you reduce the risk of buying all at once during a market peak.
DCA can help smooth out the ups and downs of the market, and many platforms allow you to automate these contributions, so you don’t have to think about it.
7. Stay Focused on the Long Term
One of the biggest mistakes beginners make is trying to “time the market” or chasing quick profits. The truth is, investing is a long-term game. Your $100 will likely fluctuate in value in the short term, but if you stay invested and allow your money to grow over the years, you’ll have the best chance of seeing significant returns.
Patience is key. Even with a small initial investment, compounding interest and reinvested dividends will work in your favor over time.
8. Reinvest Your Earnings
If your investments generate dividends, interest, or capital gains, consider reinvesting those earnings back into your portfolio. Reinvesting helps accelerate the growth of your portfolio over time by purchasing more shares and benefiting from compound growth.
9. Monitor Your Investments
Once you’ve made your first investment, keep an eye on it to ensure it’s meeting your financial goals. Many investment platforms provide easy-to-use tools to track performance. You don’t need to check every day, but it’s important to periodically review your portfolio, especially as your financial situation or goals change.
10. Keep Learning
Finally, never stop learning about investing. The more you understand about how markets work, the better decisions you’ll be able to make. Start with books, podcasts, blogs (like this one!), and YouTube channels to expand your knowledge. Over time, you’ll feel more confident in managing your investments and growing your wealth.
Final Thoughts
Starting to invest with just $100 is not only possible — it’s a great way to begin your financial journey. The key is to be patient, consistent, and focused on long-term growth. Even small investments, when made early and reinvested over time, can lead to big results.
By following the steps outlined in this post — setting clear goals, picking the right platform, choosing smart investments, and staying focused on the long term — you can take the first step toward financial independence. Remember, every investor starts somewhere. Let $100 be the start of your investment journey!