How to start investing with $100: A beginner’s guide
- Yes, you can start investing with just $100. Many brokerages now have no minimums and fractional shares makes investing more accessible than ever.
- Small steps build big habits. Even modest contributions help you cement the routine of investing and give compounding more time to work its magic.
- You have options. Brokerage accounts, retirement accounts, money market funds—there are ample places to put your money to work.
Think about your first trip to the gym. Intimidating, right? You don’t know the machines after one go, and you’re still not in marathon shape when you leave.
But you don’t need a personal trainer or a $200 studio membership to get started. Just the mindset to show up and build momentum over time.
Investing works the same way. You don’t need thousands of dollars or decades of experience.
With just $100, you can take your first step into the market. And that first step is far more important than waiting until you have more to invest. Starting small builds confidence, creates good habits, and helps you put time (one of investing’s biggest advantages) on your side.
There are puh-lenty of beginner-friendly ways to put $100 to work. What are some of the most common options, you ask?
- Fractional shares of stocks: Own a slice of big-name companies without needing hundreds of dollars per share.
- Retirement accounts: Use tax-advantaged accounts to grow your $100 toward long-term goals like retirement.
- Money market funds: Park your cash in a stable, interest-earning investment with low risk.
- Exchange traded funds (ETFs): Get diversified exposure to hundreds or even thousands of companies with a single trade.
Can you really start investing with $100?
Yes, you absolutely can.
There was a time when you couldn’t. Not too long ago, investment firms imposed steep minimums (often to the tune of thousands of dollars) just to open an account. Now, a lot of brokerages and apps have no account minimums. And many of these platforms allow you to buy fractional shares of stocks, so you don’t have the buy the full share of a single stock or ETF to get started. What a time to be alive!
Say a company’s stock costs $400 a share. With fractional shares, your $100 can buy one-quarter of a share, giving you ownership and growth potential without needing the full $400.
A lone Benjamin may seem insignificant, but the dollar amount isn’t what matters here. It’s like getting into a gym routine—on day one, the goal isn’t to lift the heaviest weight possible (hello, hernia); it’s building the habit of going to the gym. With investing, those early deposits get the ball rolling and, over time, can compound into something much, much larger.
It may sound counterintuitive, but waiting until you have “enough” could actually work against you. Because time in the market is your greatest ally, it’s more important to start small, right now.
4 Beginner-friendly ways to invest $100
Like cutting soda out of your diet, a little effort can go a long way in the market. The good news is, you’ve got options without sacrificing your afternoon Diet Coke.
Fractional shares allow you to own part of a big-name company without forking over hundreds (and sometimes thousands) of dollars. It’s like buying pizza by the slice.
For example, if a company’s stock trades at $500 a share, you could invest $100 to own one-fifth of a share. You’ll get the same proportional return as someone who owns a full share, just scaled to the amount you invested. In other words, if that stock doubles to $1,000 a share, your $100 investment would double to $200.
$100 isn’t enough to quit your job and sail into the sunset, but it’s enough to start building toward retirement goals. Many brokerages let you open an Individual Retirement Account (IRA) with no minimum balance, which means your first deposit is an all-important step toward a long-term nest egg.
Why consider an IRA?
- Tax advantages: Depending on whether you choose a traditional or Roth IRA, you can get tax breaks now or later—either deducting contributions today or letting your money grow tax-free for the future.
- Long-term growth: Even small amounts add up when they have decades to compound. See a hypothetical example below.
- Goal alignment: An IRA is specifically designed for retirement, which helps keep your focus on long-term wealth-building.
If you want your $100 to start working but aren’t quite ready for the ups and downs of the stock market, money market funds can be a good entry point. These funds pool together short-term, high-quality debt investments (like US Treasurys) for stability and a modest return.
They’re a low-risk, liquid option that can provide a better yield than cash. Think of them as the financial equivalent of a warm-up exercise: no big gains, but a safe way to ease in before you tackle heavier lifting.
ETFs are one of the easiest ways to invest $100. With one trade, you can buy into a basket of leading companies. That means instant diversification, which lowers the risk of being tied to the fate of just one stock.
Why do ETFs work well for beginners?
- Diversification on a budget: Your $100 spreads across many companies instead of going all-in on one.
- Low cost: Many ETFs charge very low fees, so more of your money stays invested.
- Accessibility: Most brokerages let you buy ETFs with no minimums, and many even allow fractional ETF shares.
- Flexibility: You can sell them anytime during market hours, just like a stock.
Is investing $100 worth it?
Yes. Just like going to the gym for the first time, investing $100 is crucial to establishing a routine and long-term mindset.
Even a small sum can grow dramatically thanks to the power of compounding. As a ~relatively~ intelligent man once said, compound interest is the eighth wonder of the world (it was Albert Einstein, in case our relativity joke didn’t land).
When you invest, the gains you earn can be reinvested, which means your money earns returns on both your initial deposit and on those earlier gains.
For example, if $100 grew at a 10% average annual return, it could become about $200 in a little over seven years, over $400 in 15 years, and nearly $1,750 in 30 years—without depositing another dollar.1 Add consistent contributions on top of that, and the numbers get much larger.
With a $50 monthly contribution in that exact same scenario, your portfolio balance after 30 years would be north of $115,000.2 Long story short, time is the greatest asset. The earlier you begin, the more time you give your money to grow.
Tips to maximize your first $100 investment
Your first investment is a milestone worth celebrating. But, like your first session at the gym, how do you make the most of it?
- Choose low-fee platforms. Fees can eat into small balances quickly. Look for brokerages or apps with no commissions and low expense ratios.
- Start with simple, low-cost broad funds. Core ETFs or index funds can give you instant diversification. And low-cost funds offer a way to build a diversified core portfolio that helps you keep more of what you earn.
- Automate your contributions. Even small, regular deposits (another $10 or $25) build momentum and make investing a habit.
- Stay patient. The biggest gains come with time. Resist the urge to trade too often or chase quick wins.
- Reinvest dividends. If your investment pays dividends, choose automatic reinvestment to put that money back to work.
- Think about your goals. Whether you’re saving for retirement, a big purchase, or just building wealth, your goals should guide your choices.
getting there starts here
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One small step for your portfolio, one giant leap for your future
One trip to the gym won’t turn you into a world-class athlete. But you also don’t need to be a world-class athlete to start going to the gym.
Along the same lines, you don’t need thousands of dollars to start investing. Even $100 can be enough to take the first step, and that first step is what really counts. Starting now builds momentum, creates good habits, and gives your money more time to grow.
Small amounts, invested consistently, can help you make steady progress toward your bigger financial goals. And when you’re ready to put that $100 to work, low-cost core funds are a good place to begin. They provide broad market exposure at a fraction of the cost, making them a strong foundation for new and experienced investors alike.
Build your core portfolio for less
Costs matter—and they can erode performance over time. That’s why we offer an easy way to build a diversified core portfolio that helps you keep more of what you earn.
