You don’t need thousands of dollars to start investing. That’s a myth that keeps a lot of people on the sidelines while their money earns nothing in a savings account. Most brokerage platforms now have $0 minimums, $0 commissions, and support for fractional shares. You can literally start with spare change. Here’s how.
Open a brokerage account (it’s free)
A brokerage account is just an account that lets you buy investments like stocks, ETFs, and index funds. Opening one takes about 10 minutes and requires no minimum deposit at most platforms.
Three solid options for beginners:
Fidelity: No account minimums, no commissions on stocks and ETFs, fractional share investing starting at $1. Their index funds have some of the lowest expense ratios in the industry. Strong research tools and customer service.
Charles Schwab: Similar to Fidelity with no minimums and no commissions. Also offers fractional shares (called Schwab Stock Slices) for S&P 500 companies. Recently merged with TD Ameritrade, so the platform has robust tools.
Vanguard: The original home of index fund investing. Slightly less polished app compared to Fidelity and Schwab, but their fund options are excellent and costs are rock-bottom.
All three are established, SIPC-insured (protecting your investments up to $500,000 if the brokerage fails), and offer everything a beginner needs.
What to buy with $100
With $100, you want maximum diversification at minimum cost. That means an index fund or ETF, not individual stocks.
Option 1: A total stock market ETF. VTI (Vanguard Total Stock Market ETF) gives you exposure to over 3,600 US companies in a single purchase. It costs whatever the share price is (around $250 as of recent pricing), but with fractional shares you can buy $100 worth. The expense ratio is 0.03%, meaning you pay 3 cents per year per $100 invested.
Option 2: An S&P 500 ETF. VOO (Vanguard S&P 500 ETF) or SPY (SPDR S&P 500 ETF Trust) tracks the 500 largest US companies. Similar cost, similar returns to VTI, slightly less diversification since it excludes small and mid-cap companies.
Option 3: A target-date fund. If you want something truly hands-off, target-date funds automatically adjust your stock and bond mix as you age. Fidelity Freedom Index funds have low minimums ($0 for the institutional class through Fidelity) and handle the allocation for you. Pick the fund closest to your expected retirement year.
Set up automatic investing
The hardest part of investing isn’t choosing what to buy. It’s remembering to buy regularly. Set up an automatic transfer from your checking account to your brokerage account, and enable automatic investment into your chosen fund.
Even $25 per week adds up to $1,300 per year. At a historical average return of about 8% to 10% per year, $25 weekly invested for 30 years grows to roughly $115,000 to $150,000. Automation removes the decision fatigue and ensures you invest consistently, which matters more than investing perfectly.
Use a retirement account if possible
Before investing in a regular brokerage account, check whether you have access to a tax-advantaged account:
401(k) through your employer: If your employer offers a match, invest enough to get the full match before doing anything else. A 4% match on a $50,000 salary is $2,000 per year of free money. The match is a guaranteed 100% return on your contribution, which no stock market investment can guarantee.
Roth IRA: If your income is below the limit ($161,000 for single filers in 2025), you can contribute up to $7,000 per year to a Roth IRA. You invest with after-tax money, but all growth and withdrawals in retirement are tax-free. For someone in their 20s or 30s, the tax-free growth over decades is tremendously valuable.
Traditional IRA: Contributions may be tax-deductible depending on your income and whether you have a workplace plan. Growth is tax-deferred. Withdrawals in retirement are taxed as ordinary income.
What not to do with your first $100
- Don’t buy cryptocurrency as your first investment. Crypto is speculative and volatile. It’s not a substitute for a diversified stock portfolio. Maybe later, with money you can afford to lose, but not your first $100.
- Don’t day trade. Buying and selling stocks within the same day requires a $25,000 minimum balance in a margin account, and studies show most day traders lose money.
- Don’t buy penny stocks. Stocks trading under $5 per share are often there for a reason: the company is struggling, thinly traded, or about to get delisted. They’re not hidden gems.
- Don’t try to time the market. Waiting for the “perfect” time to buy means you’ll probably never buy. Time in the market beats timing the market across almost every study ever conducted.
The compounding math
The point of starting with $100 isn’t that $100 will make you rich. It’s that $100 starts the habit, the habit leads to consistency, and consistency plus time leads to real wealth.
$100/month invested at 8% average annual return:
- After 10 years: about $18,400
- After 20 years: about $59,300
- After 30 years: about $150,000
- After 40 years: about $350,000
The total contributions over 40 years are $48,000. Compound growth adds $302,000 on top of that. The money does more work the longer it sits. Starting now with whatever you can afford is always better than waiting until you have more.