How I started investing with just $100 — and why you shouldn’t wait

For years, I thought of investing as something that belonged to wealthy people with hundreds of thousands of dollars at their disposal. I’d read articles featuring folks who made it big by investing in the stock market and wondered how anyone without significant savings could ever build wealth.

But here’s what changed everything: I discovered that investing even small amounts creates powerful momentum over time. That initial $100 I invested years ago has grown, but more importantly, it shattered the mental barrier that kept me from starting. Now I contribute weekly, and my portfolio growth surprises even me.

Today’s investment landscape offers democratized access that fits everyone’s needs. Investing apps have fractional shares, brokerages come with low minimum requirements and automated tools like robo-advisors make the process incredibly simple. Let’s dive into how I built an investment portfolio from $100 — and how you can start your own investment journey today.

In this article

Why I started small (and why you should too)

Before I began investing, I used to keep all my extra cash in a high-yield savings account to earn about 4.50% APY on my deposits, which is a solid return for the near-zero risk I was taking. But I wondered if there was more to do with my money, so I took out $100, opened a brokerage account and made my first stock purchase.

I remember hovering over the “confirm purchase” button, worried I was making a mistake. That modest investment bought me partial shares in a simple exchange-traded fund (ETF) that invests in the largest 500 U.S. companies — broadly known as an S&P 500 ETF.

Starting small offers several advantages beyond just getting your foot in the door:

• Learn with less money at stake. When you’re just starting out, you’ll inevitably make some mistakes as you learn how investing works. With $100, those mistakes won’t hurt your finances as much as starting with thousands of dollars.

• Gradually build investing confidence. Starting with a small amount helps you get comfortable with market movements without the anxiety of watching larger sums fluctuate in value. This confidence grows naturally as you become familiar with how your portfolio fluctuates over time.

• Automatically buy at multiple price points. Adding small amounts regularly, like $100 monthly, means you’ll purchase investments at various prices — sometimes higher, sometimes lower— rather than risk all your money at one potentially bad time. This strategy, called dollar-cost averaging, helps smooth out your average purchase prices over time.

• Create a lasting investing habit. Starting with manageable amounts makes it easier to commit to the investing habit for the long run. Just like building any habit, beginning with smaller, achievable actions increases your chances of sticking with it consistently.

• See compound growth in action firsthand. Even small amounts show how money can grow through compounding, where your earnings begin generating their own earnings. Watching this process unfold with your own money provides powerful motivation to continue investing more over time.

Here’s your portfolio’s growth potential if you start with just $100 initial investment and add $100 every month, assuming a moderate annual growth of 7%:

That’s right: Contributing just $100 monthly for 30 years could potentially turn your $36,100 total investment into over $124,000. The longer your money works, the stronger the results become, thanks to compound growth.

Dig deeper: Time in market vs. timing the market: How dollar-cost averaging simplifies investing

Where to invest your first $100

When you start with a modest amount to invest, focus on investment options that don’t charge high fees or require large initial deposits. Your goal should be maximum flexibility with minimal costs eating into your small starting amount. These costs can be subscription or platform charges or annual management fees — typically expressed as expense ratios.

My first $100 went into an index ETF that follows the performance of the S&P 500 index by investing in the same top 500 U.S. companies the index tracks. This immediately diversified my tiny investment across these 500 companies with a single purchase, rather than taking my chances on individual stocks. At the time, that ETF cost about $300 per share, but the platform I chose allowed me to buy fractional shares, meaning my $100 bought me approximately a third of a share.

What about other asset classes?

Investing in individual stocks can be an exhilarating option, especially now that most brokerages offer fractional shares letting you buy tiny pieces of companies like Amazon or Apple for just a few dollars. However, with just $100, purchasing stock in a single company means putting my few eggs in one basket.

That’s why it’s smart to start with ETFs or mutual funds that automatically spread your investment across many companies — a strategy known as diversification.

Mutual funds have traditionally required higher minimum investments, often $500 or more, making them less accessible for small starting amounts. However, some brokerages now offer mutual funds with no minimums. The main difference between mutual funds and ETFs is that mutual funds trade once daily after market close, while ETFs trade throughout the day like stocks.

REITs offer another solid option for your first $100, allowing you to invest in real estate without buying and maintaining properties yourself. However, make sure to read each REIT’s official documents and fine print to learn about the exact fees you’ll pay.

Dig deeper: Mutual funds, index funds and bond funds: What they are and how they work

How to pick the right investment platform

The platform you choose significantly impacts small investments because fees can quickly erode your returns. When I began, I specifically searched for platforms designed for small investors.

Look for platforms that offer:

• No or low investment minimums. Many platforms have eliminated account minimums entirely, allowing you to start investing with any amount you have available. However, some may still require minimums for automated investing or mutual funds.

• Small or no fees. Fees can quickly eat into investment returns. For example, a 1% annual fee may sound tiny, but it becomes a significant cost over time. That’s why you should learn all the fees that may apply to you and stick with platforms offering commission-free trades and low or no additional fees.

• Fractional share investing. While fractional shares are a lot more common today, some investment platforms offer them in limited forms. Make sure your platform offers the assets you want to buy in fractional form if you’d buy them in portions instead of waiting until you can afford full shares.

• User-friendly trading platform. Look for intuitive interfaces that make monitoring and managing your investments straightforward. For example, some platforms allow you to enter a purchase amount like $50 to automatically calculate how many shares you’re looking to buy. Others offer streamlined performance charts that are easy to read or small pop-up explainers when you hover over certain industry terms.

Editor’s picks: 5 best low-cost investment platforms

These investment platforms offer intuitive trading interfaces and charge little or no platform fees, making them solid options for someone who’s just starting out.

SoFi

Fees:

• $0 commissions on stocks and ETFs

• 0.25% annual advisory fee for automated investing

SoFi offers a simple investing platform that makes investing approachable for newcomers with minimal costs to get started. With no commissions on stock and ETF trades and a low minimum investment for both active and automated investing, SoFi removes many of the common barriers for new investors.

SoFi Invest supports fractional share trading for both stocks and ETFs. This means you can invest small amounts — even as little as $1 — allowing you to precisely allocate your funds and build a diversified portfolio over time.

➡️ Sign up at SoFi Invest

Acorns

Fees:

• $0 commissions on stocks and ETFs

• $3 to $12 monthly subscription

Acorns is an automated investing platform that asks a few questions to calculate your financial goals and tolerance for risk during the signup process, doing the work for you from there on. It automatically invests your deposits in expert-built portfolios that use low-cost ETFs. Acorns also allows you to automatically round up everyday purchases and invest the spare change.

Instead of commission or percentage-based fees, Acorns uses a simple monthly subscription model starting at $3 for a personal automated investing account. However, you’ll need the $12-per-month subscription to get direct access to buy individual fractional shares of stocks or ETFs.

➡️ Sign up at Acorns

Charles Schwab

Fees:

• $0 commissions on stocks and ETFs

• $0 fees for 4,000+ mutual funds

• 0% advisory fees for automated investing

Charles Schwab combines affordability with comprehensive offerings, making it an excellent choice for both beginners and experienced investors. The platform has $0 fees on stock and ETF trades as well as $0 advisory fees for its robo-advisor service, but it requires a $5,000 minimum. Schwab provides access to a wide range of assets including stocks, bonds, mutual funds and more, all backed by robust research tools and educational resources that help you learn more about investing over time.

Schwab began offering fractional shares through its Stock Slices program in 2020. This program allows you to buy portions of any S&P 500 stock for as little as $5 per slice. However, this fractional trading is limited to S&P 500 companies only and doesn’t work for the broader stock market or ETFs. This means that to invest in ETFs through Schwab, you’d need to buy at least one full share at a time.

➡️ Sign up at Charles Schwab

Robinhood

Fees:

• $0 commissions on stocks and ETFs

Robinhood revolutionized investing with its mobile-first approach and remains one of the simplest ways to trade commission-free. The recently launched Robinhood Legend desktop platform now offers advanced tools and premium research reports at no extra cost.

Robinhood enables you to buy fractional shares of both stocks and ETFs with a minimum purchase amount of $1. The platform also features a unique 1% to 3% match on IRA contributions that helps you boost your retirement savings.

➡️ Sign up at Robinhood

Fidelity

Fees:

• $0 commissions on stocks and ETFs

• $0 for 3,000+ mutual funds

• 0% advisory fee for automated investing balances under $25,000

Fidelity combines extensive investment options with excellent retirement planning tools, making it ideal for long-term investors. With no minimum balances and zero commissions on stock and ETF trades, Fidelity makes getting started incredibly accessible.

Fidelity offers fractional share trading on thousands of stocks and ETFs with a minimum investment as low as $1. This allows you to invest precisely the amount you want and tailor your portfolio allocation without having to round up to whole shares.

➡️ Sign up at Fidelity

My step-by-step investing process

Setting up your investments doesn’t need to be complicated. As someone who often falls into rabbit holes, I spent hours researching the “perfect” approach before investing my first $100, only to realize that simplicity works best for beginners.

The key isn’t finding the absolute optimal strategy but creating a consistent process that you’ll actually follow. My approach focuses on minimizing fees, maximizing automation and removing emotional decision-making — three factors that have the biggest impact on long-term results. I’ve refined this system over time, but the core principles remain the same since that first $100 investment.

Here’s exactly how I invest.

1. Finding the right platform

I chose SoFi Invest because of its simple interface and broad access to fractional shares of stocks and ETFs. However, many excellent platforms like Acorns, Fidelity, Robinhood, Charles Schwab and more offer similar functionality, so find the option that fits your needs.

My account setup took about 10 minutes, requiring just my personal information, identity verification through my driver’s license and answers to a few questions about my investing experience.

2. Connecting a bank account

Linking my high-yield savings account was straightforward — I entered my account and routing numbers, then verified ownership by confirming two small test deposits that appeared in my account within two business days. Today, many platforms offer instant verification with major banks through secure login.

3. Selecting quality ETFs with low fees

I focused on established ETFs that invest in the broad U.S. market with minimal expense ratios. I chose to split my investments between Vanguard Total Stock Market ETF (VTI), which holds about 3,500 U.S. companies of all sizes, and SPDR S&P 500 ETF (SPY), which tracks the 500 largest U.S. companies. VTI charges just 0.03% annually while SPY charges 0.09% — both extremely cost-efficient at $3 and $9 per $10,000 invested.

I looked up each ETF’s ticker symbol (like VTI or SPY) on my brokerage platform and financial websites like Yahoo Finance or Morningstar. For each fund, I looked at the annualized historical returns over 3-, 5- and 10-year periods to understand performance across different market conditions. I checked the expense ratio, fund size or assets under management and inception date to ensure the fund has a solid track record.

I also reviewed each fund’s composition to get a picture of what sectors and industries it invests in and checked the risk-to-reward scale that measures potential volatility on a range from 1 to 5. While historical returns don’t guarantee future results, this research gave me enough context to make informed decisions.

4. Executing the first trades

Rather than buying full shares, I entered $50 for each ETF and selected “market order” to purchase at the current price. The platform calculated how many fractional shares I’d receive and I clicked submit order.

Other order types include:

• Limit order. Sets a maximum price you’re willing to pay when buying or a minimum price you’ll accept when selling. The order only executes if the market reaches your specified price or better.

• Stop order. Also called a stop-loss order, triggers a market order when a stock reaches a specified price, helping you limit potential losses if a stock drops below your comfort level.

• Stop-limit order. Combines features of stop and limit orders by triggering a limit order when an asset reaches your stop price. This gives you more control but it may not always execute in fast-moving markets.

For people investing in established ETFs, simple market orders typically work well, especially when using dollar-cost averaging with regular contributions.

5. Setting up automatic investing

Once I got my first trades in, I decided to automate the process moving forward. I established weekly automatic transfers of $100 from my savings account to my investing account. The transfer scheduler let me select which day of the week for the transfer and which account to pull from.

I used a similar tool on my investing account to set up recurring weekly purchases of SPY and VTI once the money is in. This eliminates the temptation to time the market or skip contributions during market volatility.

Setting up this automated process was remarkably simple. The investing platform handles all the calculations and fractional share purchases, making regular investing almost effortless after completing the initial setup.

Dig deeper: 5 common investing myths — debunked: Why you don’t need thousands to own stocks

5 common investing mistakes you should avoid

Setting up your trades and watching your portfolio grow is exciting, but even experienced investors make mistakes that can limit their success.

1. Obsessing over short-term performance

Many new investors check their portfolio value daily or even multiple times a day. This habit creates unnecessary emotional reactions to gains and losses and can lead to panic-selling during market dips. The stock market naturally fluctuates, and focusing too much on day-to-day or even month-to-month performance can lead to emotional decisions that turn paper losses into real ones, which hurts your long-term investment success.

2. Choosing overly complicated investments

Complex investment products such as cryptocurrencies, options and futures often come with higher fees and unnecessary risks. Starting with simple, low-cost index funds helps you build a solid foundation before venturing into more sophisticated investment strategies or products. Remember that complicated doesn’t mean better — sometimes the simplest investment choices deliver the best results.

3. Neglecting tax-advantaged accounts

Taxable brokerage accounts are great for general investing goals, but if your aim is to build a retirement portfolio, make sure to max out tax-advantaged options like Roth IRAs or workplace retirement plans like 401(k)s.

These accounts offer significant tax benefits that boost your overall returns. A Roth IRA, for example, provides tax-free growth and withdrawals in retirement, while traditional individual retirement accounts offer upfront tax deductions.

Dig deeper: Roth IRAs: What they are, how they work and how to open one

4. Focusing on single stocks

Putting large dollar amounts into just one or two companies increases your risk level. Even successful businesses face unexpected challenges — a missed revenue target or lower-than-expected profit margin can send the stock tumbling.

That’s why you should make sure to have a well-diversified portfolio by investing in more than a few companies and in various sectors. That’s why index funds remain one of the best ways to get immediate diversification as they spread your money across hundreds or thousands of companies.

5. Attempting to time the market

Nobody — not even professional stock market traders — consistently predicts market movements. Instead of trying to buy at the perfect time, focus on regular contributions regardless of market conditions. This investing approach removes emotion from your investment decisions.

This is also true for timing share sales. Market downturns trigger emotional responses that push many people to sell at precisely the wrong moment, locking in losses instead of riding out the temporary decline. Panicked selling also misses the market’s best recovery days, which frequently occur shortly after major drops. Historical data shows market downturns and recessions typically resolve within 11 months on average while upward-trending markets extend for four years.

Dig deeper: 8 common money mindsets holding you back — and tips for breaking through the biases

Alternatives to investing in the stock market

The stock market offers strong long-term growth potential that historically averages 7% to 10% per year, even after accounting for inflation. However, investing in the stock market comes with inherent risk that doesn’t fit everyone.

Several other investments provide stability and growth without as much risk. These alternatives work particularly well for short- and medium-term needs like building an emergency fund, saving for a down payment on a house or generating passive income.

1. High-yield savings accounts (HYSA)

These accounts are almost the same as traditional savings accounts, but they offer significantly better interest rates while keeping your money completely safe and accessible. Unlike investments, your principal never decreases, making them perfect for emergency funds or saving for expenses over the short term. Your deposits and earnings receive protection from the Federal Deposit Insurance Corporation (FDIC) for up to $250,000 per bank.

2. Certificates of deposit (CDs)

CDs lock up your money for a specific period — ranging from three months to five years — in exchange for guaranteed returns. They typically offer higher rates than traditional savings accounts while offering the same FDIC insurance, but penalize early withdrawals. CDs work well when you have a specific target date for using your funds, such as a planned home renovation or a car purchase. They’re also a great fit for funds you don’t plan to use soon.

3. Money market accounts (MMAs)

These accounts blend features of checking and savings accounts, often offering check-writing privileges while providing competitive interest rates and FDIC protection. Many money market accounts require higher minimum investment requirements than regular savings, typically starting at $500 to $2,500. In exchange, they offer better access to your cash compared to a savings account, making them excellent for short-term needs and daily expenses while earning decent returns.

4. Bonds

Bonds are a form of loans to governments or corporations that pay regular interest payments during their term and return your principal at maturity.

Treasury bonds offer the highest safety as they’re backed by the U.S. government while corporate bonds typically provide higher yields with increased risk. Municipal bonds deliver tax benefits, with interest typically exempt from federal taxes and sometimes state taxes.

Bonds generally fluctuate less than stocks, making them a great tool for balancing portfolio risk or generating steady income from your investments, especially for those nearing or in retirement.

5. Money market funds

Unlike bank-offered money market accounts, these investment products pool money to purchase high-quality, short-term debt assets like bonds. They typically maintain a stable $1 share price while providing higher yields than standard savings accounts.

Money market funds serve as an excellent option for parking cash within investment accounts — offering better returns than idle cash while remaining highly liquid for future investment opportunities. However, these funds lack FDIC insurance so they don’t provide the same level of safety as money market accounts.

Dig deeper: Money market accounts vs. money market funds: Which offers better returns for your cash?

Learn more about investing and growing your wealth

FAQs: Investing in the stock market

Find out more about building your investment portfolio and joining the stock market. And take a look at our growing library of personal finance guides that can help you save money, earn money and grow your wealth.

Is $100 enough to start investing?

Yes, $100 is definitely enough to start investing. While it won’t immediately transform your financial situation, it provides a starting point for your portfolio. With fractional shares now widely available, that $100 can buy pieces of dozens or hundreds of companies through ETFs or index funds. Even better, starting with a small amount helps root the investing habit while learning the process with minimal risk.

How long will it take to see meaningful returns on $100?

Investment growth depends on three factors: how much you invest, your average returns and time. With a single $100 investment earning the market’s historical average of 7% annually, you’d only get about $7 in the first year. However, consistent monthly contributions dramatically accelerate your progress. By adding just $100 monthly, your portfolio could potentially grow to $7,000+ in five years and $52,000+ in 20 years through compound growth — with only about $24,100 actually contributed from your pocket.

Should I pay off my student loans before investing?

If your student loans carry high interest rates of 6% or more, prioritizing those payments often makes the most sense. However, if your loans have lower rates, you might benefit from doing both — making required loan payments while investing enough to capture any employer match in your workplace retirement plan. This balanced approach lets you tackle debt while still building long-term wealth. Remember that student loan interest may offer tax deductions, effectively lowering its true cost.

Can I lose my entire investment portfolio?

While investing always carries some risk, losing your entire portfolio is possible but extremely unlikely with proper diversification. By spreading investments across different types of mutual funds, bonds and market sectors, you significantly reduce your risk. Even during major market crashes like 2008 or 2020, diversified portfolios recovered and eventually made positive returns. The biggest risk to your net worth actually comes from poor investor behavior—like panic selling during downturns or taking excessive risks with investments focused on a few companies.

If you’re concerned about market volatility, consider consulting a financial advisor who can help tailor investment strategies to your specific risk tolerance and time horizon.

Sources

About the writer

Yahia Barakah is a personal finance writer at AOL with over a decade of experience in finance and investing. As a certified educator in personal finance (CEPF), he combines his economics expertise with a passion for financial literacy to simplify complex retirement, banking and credit topics. He loves empowering people to make informed financial decisions that improve their everyday and long-term wellness. Yahia’s expertise has been featured on FinanceBuzz, FX Empire and EarnForex. Based in Florida, he balances his love for finance with freediving, hiking and underwater photography.

Article edited by Kelly Suzan Waggoner