7 easy ways to start investing with little money (2024)

7 easy ways to start investing with little money (1)

There is a myth that it takes tens of thousands of dollars to start investing. But what if you could learn how to invest with a little money? Yes, you can start investing and building a nest egg with just a little money. Investing, over time, becomes habit-forming and exciting, especially when you reach your financial goals.

The key is to start somewhere, even if it means investing your spare change. There are several investment vehicles that you can consider to help your money grow.

Consider these options if you want to get started building a healthy investing habit.

Workplace retirement account

If your investing goal is retirement, you can take part in an employer-sponsored retirement plan. Most companies provide their employees with a retirement saving account. An automatic deduction is taken out from your payroll each month. You can simply choose a percentage from your gross income that you want to allocate to this account.

Many employers will even match either dollar-for-dollar or 50% of what you contribute up to a certain point. Retirement accounts typically offer some form of tax advantage to incentivize you to invest for your future today.

IRA retirement account

If your employer does not provide a workplace retirement account, you can open an individual retirement account (IRA). You can choose between a traditional IRA and a Roth IRA. An IRA account is a tax-deferred account. In fact, withdrawals from Roth IRA are tax-free after the age of 59½. An IRA allows you to save up to $7,000 per year before the age of 50 and $8,000 per year if you are 50 or older. This is an easy way to build up a sizeable amount in just a few years.

Purchase fractional shares of stock

Anyone can invest in the stock market. If you prefer to pick the individual companies you want to invest in, you can still invest in stocks without a lot of money. Several new investing apps allow you to buy fractional shares of stock and ETFs.

Rather than having to save up $1,000 to buy a single share of a popular technology company, you can buy .001 shares of the company for $1. This makes it easy to diversify your portfolio of individual stocks.

Index funds and ETFs

Index funds and ETFs can be a great way to diversify your investment. Index funds and ETFs track certain indexes, such as the S&P 500 (made up of the 500 largest publicly-traded companies in the U.S.). When you invest in one of these vehicles, it’s like investing in the entire index without buying individual securities for each company in the index.

These products can track various assets, like stocks, bonds, currencies, commodities, or even an entire market.

Savings bonds

If you are risk-averse, consider savings bonds or Treasury securities. You can buy savings bonds with maturities as short as 30 days (minimal earnings) or as long as 30 years.

Only buy bonds you can afford to leave until maturity, or you won’t get the total return you’d hoped. Savings bonds are a great way how to invest with little money. Plus, you’ll diversify your portfolio and keep at least a portion of your funds risk-free.

Certificate of Deposit (CD)

CDs are one of the oldest forms of investment. You can buy a CD at a fixed rate from your bank. Your bank further lends this money to the market. CDs offer little-to-no risk, but they often come with low rates of return. The upside is that you know precisely how much money you will have when the CD matures.

Bottom line

You don’t need a lot of money to begin investing. All you need is consistency and commitment. While it may seem intimidating to start investing with a small amount of money, the most important thing is to start as soon as you can. By investing even a small amount consistently over time, you can potentially see your investments grow through the power of compound interest.

Remember to do your research and seek the advice of a financial professional before making any investment decisions. And before you begin investing, be sure you’ve taken care of more immediate financial needs like paying off high-interest debt and building up an emergency or rainy day fund.

This article was written by Hysha Burgess from Everything Finance and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to legal@industrydive.com.

7 easy ways to start investing with little money (2)

7 easy ways to start investing with little money (2024)


How to invest $1 dollar and make money? ›

Let's dive in.
  1. Beginners with little money should find an exchange that offers fractional investing. ...
  2. If your capital is limited, consider investing in blue-chip or dividend stocks to start. ...
  3. You can also pick a market-wide ETF to build your baseline. ...
  4. Once you get some returns on your dollar, sell and diversify.

How do I start investing with little money for beginners? ›

7 easy ways to start investing with little money
  1. Workplace retirement account. If your investing goal is retirement, you can take part in an employer-sponsored retirement plan. ...
  2. IRA retirement account. ...
  3. Purchase fractional shares of stock. ...
  4. Index funds and ETFs. ...
  5. Savings bonds. ...
  6. Certificate of Deposit (CD)
Jan 22, 2024

How can I start investing with just $100 a month? ›

  1. Our six best ways to invest $100 starting today. ...
  2. Use a micro-investing app or robo-advisor. ...
  3. Invest in a stock index mutual fund or exchange-traded fund. ...
  4. Use fractional shares to buy stocks. ...
  5. Put it in your 401(k) ...
  6. One way not to invest $100. ...
  7. Related investing topics.
  8. Don't wait to invest.
Nov 29, 2023

What is the simplest investment? ›

Cash. A cash bank deposit is the simplest, most easily understandable investment asset—and the safest. It not only gives investors precise knowledge of the interest that they'll earn but also guarantees that they'll get their capital back.

How to turn $1 into $100? ›

Sell Things You Don't Need. One of the easiest ways to turn your $1 into $100 is to sell things you no longer need. You'd be surprised how many things you have lying around the house that you can sell for a profit. Old clothing: Go through your closet and pull out any clothes that you haven't worn in a while.

How much is $1 a day for a year? ›

If you saved $1 a day for a year, do you know how much money you'd have? Roughly $30,000. This is totally 100% true. Well, 101.7% true.

How much money do I need to invest to make $1000 a month? ›

A stock portfolio focused on dividends can generate $1,000 per month or more in perpetual passive income, Mircea Iosif wrote on Medium. “For example, at a 4% dividend yield, you would need a portfolio worth $300,000.

How to invest for dummies? ›

20 rules for successful investing
  1. Saving is a prerequisite to investing. ...
  2. Know the three best wealth-building investments. ...
  3. Be realistic about expected returns. ...
  4. Think long term. ...
  5. Match your time frame to the investment. ...
  6. Diversify. ...
  7. Look at the big picture first. ...
  8. Don't sweat the small stuff.
Jul 2, 2021

How much should I invest as a beginner? ›

How much you should invest depends on your financial situation, investment goal and when you need to reach it. One common investment goal is retirement. As a general rule of thumb, you want to aim to invest a total of 10% to 15% of your income each year for retirement.

Is saving $200 a month good? ›

Don't let your current financial situation keep you from saving. Even a small amount of money saved can add up. Setting aside $200 per month is an excellent place to start.

How much is $100 a month from 25 to 65? ›

$1,176,000. You do NOT have to retire broke.

Are penny stocks worth it? ›

Investing in penny stocks will often result in losses. This is because most penny stocks are small companies that are not well established, so investing in them is highly speculative. Only invest money you can afford to lose, and never devote more than a tiny percentage of your overall portfolio to penny stocks.

What can I invest in with no money? ›

A beginner should start investing with contributions to a retirement plan. They should then choose index funds or exchange-traded funds (ETFs). A good way to start is also by choosing a robo-advisor that will make investment decisions for you based on the criteria you decide.

What investment never loses money? ›

Series I Savings Bonds

This means they're specifically designed to help protect your cash value from inflation. I bonds won't ever lose the principal value of your investment, either, and the redemption value of your I bonds won't decline.

What is the safest investment of all time? ›

Treasuries are generally considered"risk-free" since the federal government guarantees them and has never (yet) defaulted. These government bonds are often best for investors seeking a safe haven for their money, particularly during volatile market periods. They offer high liquidity due to an active secondary market.

How to turn 1 dollar into 2 dollars? ›

Strategy #1a: Buy a product or service for 1x and sell it for 2x (aka “Buy Low / Sell High”) Strategy #1b: Make something that costs 1x to make and sell that something for 2x your cost (aka “Make Low / Sell High”) Strategy #2: Buy Something then Lease It Out. Strategy #3: Invest / Grow / Lend / Put your Money to “Work”

Can you make money in stocks with $1? ›

Even if you only have $1 and never invest another penny, you can be a millionaire in 30 years. It's just that you'd need to hit a home run S&P 500 stock — which returns at least 58.5% — each year. That's a tall order, yes.

How to turn a dollar into more money? ›

Turning $1 into $100 is a challenging task, but it's not impossible. Here are a few ideas to potentially help you grow your money: Invest: Consider investing your $1 in stocks, cryptocurrencies, or mutual funds. Over time, with wise investment choices and patience, your initial investment may grow significantly.

What can I do with $1? ›

101 things to do with a $1 bill.
  • Save it (sorry, but this is Wisebread).
  • Become a very small partner in a very small business.
  • Mail it to someone, anyone, in the phone book (you’ll have to find a stamp).
  • Buy a few bites of someone’s pizza slice.
  • Make an expensive paper airplane.

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