How to Start Investing With $100 (Or Less) — A Step-by-Step Guide for Beginners

The number one excuse I hear from people my age for not investing is “I don’t have enough money.” And I get it. When you see headlines about someone putting $50,000 into their portfolio, it feels like investing is a rich-person thing and you need thousands of dollars just to get started.

That’s completely wrong. You can start with $100. You can start with $20. You can start with $5 if that’s what you’ve got. And thanks to things like fractional shares and zero-minimum accounts, there’s literally no financial barrier to getting started anymore. The only barrier is not knowing how, and that’s what this post is for.

I started with a small amount. Most people I know who invest started with a small amount. Here’s exactly how to do it.

Why starting small actually works

Before we get into the how, let me kill the myth that small amounts don’t matter.

If you invest $25 per week (that’s $100/month) starting at age 18 with an average 7% annual return:

• By 25: ~$10,400

• By 30: ~$20,200

• By 40: ~$52,700

• By 50: ~$119,500

• By 60: ~$255,000

• By 65: ~$370,000

You’d have contributed about $56,400 of your own money over those 47 years. The rest — over $300,000 — is compound growth. From a hundred bucks a month.

And here’s the thing people miss: you won’t be investing $100/month forever. As you get older, get better jobs, and earn more, you’ll naturally increase that amount. $100/month is just the starting point. The habit and the early growth are what matter most right now.

Step 1: Pick a brokerage (this takes 5 minutes)

A brokerage is just the app or website where you open an account and buy investments. There are a bunch of them, but here are the three that make the most sense for beginners:

Fidelity — no minimums, no fees, fractional shares, clean app. They even have index funds with a 0.00% expense ratio (literally free). This is what I’d recommend for most people starting out.

Charles Schwab — same deal, no minimums, no fees, fractional shares. Very solid, slightly more old-school interface.

Vanguard — the OG of index fund investing. Great funds but their app and website feel like they were designed in 2005. Still works fine, just not as smooth.

All three are legitimate, well-established companies. You’re not going to get scammed. Pick whichever one looks best to you and move on — this decision is worth about 2 minutes of your time, not 2 weeks.

What about Robinhood, Webull, etc.? They work, but they’re designed to make you trade a lot (which costs you money through worse decisions), and they push individual stocks, options, and crypto hard. That’s the opposite of what you want when you’re starting out. The three above are built more for long-term investors, which is what you should be.

Step 2: Open the right account

You’ll get asked what type of account you want to open. Here’s the decision tree:

Do you have income from a job?

• Yes → Open a Roth IRA. Tax-free growth, best account for young people, period. I wrote a whole post about this ([link to Roth IRA post]).

• No → Open a regular taxable brokerage account. You’ll pay taxes on gains when you eventually sell, but it’s still way better than letting money sit in a savings account earning almost nothing.

Are you under 18?

• Yes → You’ll need a parent to open a custodial account for you. Most brokerages offer custodial versions of both Roth IRAs and regular brokerage accounts.

Don’t overthink this. Getting the money invested matters more than getting the account type perfect. You can always open additional accounts later.

Step 3: Deposit your money

Link your bank account (checking or savings) and transfer your money in. Most brokerages let you set up automatic transfers too — like $25 every Friday or $100 on the 1st of each month. I highly recommend doing this because it takes the decision out of your hands. You can’t forget to invest if it’s automatic, and you can’t talk yourself out of it during a bad market week.

Even if you’re starting with a one-time $100 deposit, set up a small recurring transfer for whatever you can afford going forward. The initial deposit gets you started; the automatic contributions are what build real wealth.

Step 4: Buy an index fund

This is the actual investing part, and it’s simpler than you think.

Once your money is in the account, search for one of these:

• FXAIX (Fidelity’s S&P 500 index fund)

• FZROX (Fidelity’s total market fund — 0% expense ratio)

• VTI (Vanguard Total Stock Market ETF)

• VOO (Vanguard S&P 500 ETF)

• SWTSX (Schwab Total Stock Market)

Pick whichever one is available on your brokerage. They’re all extremely similar — they all own a massive basket of US companies, charge almost nothing in fees, and have decades of strong historical returns. The differences between them are so small they genuinely do not matter for someone starting with $100.

Hit “buy,” enter your amount (most brokerages allow fractional shares, so you can buy $100 worth even if one share costs $500), confirm, and you’re done. You’re now an investor.

Step 5: Don’t touch it

This is simultaneously the easiest and hardest step.

Your job now is to do nothing. Don’t check it every day. Don’t sell when it drops. Don’t try to time the market. Don’t get fancy with individual stocks or options or crypto. Just let your automatic contributions keep going and let compound interest do its thing.

Set a reminder to check it once a month if you want. But the best investors are the ones who basically forget about their accounts and let them grow. There’s actually a famous study that showed the best-performing accounts at Fidelity belonged to people who were dead or had forgotten they had the account. I’m not saying that should be your goal, but the message is clear: doing nothing is usually the best strategy.

“But $100 feels pointless”

I hear this a lot and I want to address it directly because this mindset keeps a lot of people from ever starting.

$100 invested today at 7% annual returns is worth roughly:

• $200 in 10 years

• $400 in 20 years

• $800 in 30 years

• $1,500 in 40 years

One hundred dollars turns into fifteen hundred without you doing anything. That’s one deposit, one time, growing on its own for four decades.

Now imagine you do that every single month. That’s where the numbers in the table at the top of this post come from. Each $100 you invest starts its own little compounding journey, and they all stack on top of each other.

The point was never that $100 will make you rich tomorrow. The point is that $100 invested today is worth dramatically more than $100 spent today, and the earlier you start, the more dramatic that difference gets. Waiting until you “have enough” means every month you delay is a month of compound growth you’ll never get back.

Common beginner mistakes

Buying individual stocks first. Your first investment should not be Tesla or Nvidia or whatever’s trending. It should be a boring index fund that owns thousands of companies. Get the foundation right, then experiment with small amounts later if you want.

Getting paralyzed by choices. There are thousands of funds and ETFs out there. Ignore 99% of them. One total market or S&P 500 index fund is all you need to start. You can get fancy later. Right now, simplicity is your friend.

Waiting for the market to dip. People have been “waiting for the dip” for years and missed out on massive gains. Time in the market beats timing the market — this has been studied over and over. The best time to invest is always now.

Investing money you need soon. If you need the money in the next 1-2 years for college, a car, rent, or anything else — that money belongs in a savings account, not the stock market. Only invest money you can leave alone for 5+ years.

Not investing at all because it feels too small. This is the worst one. $20 invested today is infinitely more than $0 invested. The amount will grow as your income grows. Just start.

The actual plan (keep this simple)

Here’s your entire investing strategy on an index card:

1. Open a Roth IRA (or custodial account if under 18)

2. Set up automatic transfers — whatever you can afford, even $25/week

3. Buy a total market index fund

4. Don’t touch it

5. Increase contributions whenever your income goes up

That’s it. That’s the plan that will quietly make you wealthy over the next few decades while most people your age spend years researching, overthinking, and never actually starting.

The hardest part isn’t the strategy. It’s opening the account and making the first deposit. Everything after that is autopilot.

So here’s my challenge to you: if you’ve been thinking about investing but haven’t started yet, do it today. Not tomorrow, not this weekend, not “when I have more money.” Right now. Open the account, deposit whatever you have — even if it’s $10 — and buy your first index fund. You can literally do it on your phone in the time it takes to watch a YouTube video.

Future you will be glad you did.

If this helped, check out my other posts: [How Much Should a 17-Year-Old Actually Invest?], [Index Funds Explained], and [What Is a Roth IRA?]. Or subscribe to the newsletter to get a new post like this every week — just me, no spam, no fluff.